Big machines. Bigger data. Experts estimate five million new things are connected around the world every day. We’re talking watches, phones, cars and yes, even bulldozers. The future of the construction site is way more than just machines. So what does this mean for Caterpillar? They see the future of construction sites going well beyond the iron… It’s all about connectivity, and Caterpillar has the largest industrial fleet of connected assets in the world. Caterpillar’s Construction Industries Group President Bob De Lange and Construction Digital and Technology Manager John Carpenter tells iBi how the company is equipping its customers to make data-driven decisions faster, resulting in more accurate, safer and efficient operations.
When most people think of Caterpillar, they picture big yellow machines like bulldozers and excavators… but what you offer customers goes well beyond that. Tell us more about how you are using technology in the construction industry.
De Lange: People may not always think of Caterpillar as “high-tech,” but we are. We’ve been focused on leading in technology for decades, and we have quite a history of innovation, providing our customers with the solutions they need. We hold over 20,000 patents worldwide and invest nearly $2 billion a year in research and development—and those dollars are focused not only on designing and manufacturing the best equipment, but also on developing digital technology aimed at helping our customers get their work done in a safer, more productive and efficient way.
Carpenter: You might ask where the opportunities are for digital technology in the construction industry. Interestingly, global annual construction revenue totals $10.5 trillion, but the majority of projects incur cost overruns in the neighborhood of 25 to 55 percent—which translates to somewhere between $2 and $4 trillion each year. About 60 percent of cost overruns can be controlled, which means there’s a huge opportunity to create some pretty remarkable value for our customers. We just need to provide them with the products, services and solutions that can help them better manage their projects. And there is no better way to do this than by leveraging digital technologies and supported services.
De Lange: This is the new reality for the industries we serve, and we’re accelerating our efforts in this space to give our customers the solutions that can help them make more informed decisions about their jobsite. It really all starts by knowing our customers—understanding their needs and capabilities, their most pressing problems, and how we can help them. When we know this, we can focus on the biggest opportunities and build offerings to meet their needs.
What digital solutions are you providing to your customers?
De Lange: Caterpillar provides technology and technology-enabled services through hardware and software that’s not only on the iron, whether factory-installed or retrofit, but also goes beyond the iron. We do this through Cat® Connect Technology and Services. Cat Connect gives our customers a simplified approach to adopting construction technologies and services for all of the assets on their jobsite—not just Cat-branded products. It allows them to monitor, manage and enhance their operations, taking greater control of their jobsites. And it’s really in the “monitor, manage and enhance the operations” that Cat Connect can help articulate the value of “beyond the iron.”
Can you describe how Cat Connect has helped your customers?
Carpenter: There are several Cat Connect Technology products that help customers get the most value from their equipment. Some examples include:
- Cat Link. Every piece of equipment has a story to tell: where it is, how long it’s been working, how healthy it is, etc. Through our hardware and software solutions, available on Cat and non-Cat equipment, we are able to “connect” assets, and in the process, have given the equipment a voice. By connecting assets, customers, dealers and Cat can listen to what the fleet is saying and make recommendations on how to improve.
- Cat Grade Control improves grading accuracy for bulldozers, excavators and motor graders, boosting productivity, speed and accuracy.
- Cat Payload is an onboard system for trucks and loading tools that measures material weight to monitor productivity, avoid overloading and deliver higher fuel efficiency, shorter cycle times and in the end, lower cost per ton.
- Cat Detect provides tools like onboard camera systems and object proximity detection systems to enhance jobsite awareness and minimize safety risks.
- Cat Command is a new suite of technology offerings that enable customers to remotely operate their machines from nearby or from remote locations.
Cat Connect Services include Equipment Management, Safety Services, Productivity Services and Sustainability. To describe each briefly:
- Equipment Management is about managing fleets, both Cat’s and our competitors’, to reduce the costs associated with the health and maintenance of jobsite assets.
- Safety Services helps locate employees on site, ensures safe interactions between machines and personnel, and can even identify fatigued or distracted workers. An example of this is our Cat Smartband. It can tell when a worker is sleepy or fatigued and not mentally fit for work. It’s a great example of leveraging technology to make the jobsite safer.
- Productivity Services expands technology-enabled services to help our customers streamline their operations, control costs and reduce risks.
- Making recommendations as a result of analyzing digital insight from the customer’s jobsite and technologies, such as grade control, helps drive Sustainability by reducing waste, idle time and fuel burn.
You mentioned Cat Connect goes beyond Cat-branded equipment. How does it do that?
Carpenter: We’re able to connect jobsite assets of all types and brands and can anticipate and solve our customer’s pain points in ways we never have before. Let me share a story about one of our customers to illustrate.
Using Cat Connect Services, we connected a customer’s fleet comprised of more than 16,000 assets—everything from heavy equipment to light plants, and most were not Caterpillar. This customer improved equipment utilization by nearly 20 percent over the past several years, which means lower capital expenditures, and lower owning and operating costs.
Through connected assets, we are also improving our ability to predict failures before they happen, what we call “fix before failure.” We see great potential in this space going forward.
De Lange: Cat Connect Technology and Services can be combined, customized and scaled to support any size business, project or jobsite, no matter the complexity. That flexibility is something our customers value.
What kind of competition do you face with digital technology?
De Lange: Our industry-leading connectivity is possible because Cat Connect gives us access to more data than anyone in the industry. Our global scale, extensive application knowledge, and deep understanding of our products helps us turn this data into useful information for our customers.
But we know we’re competing for this digital business—not just with our traditional competitors, but also with startups, global ecommerce companies or even the lone digital guru working at home. But none of them have what we have, which is decades of understanding the industry and our customers’ needs, the largest field population in the world, and access to the largest connected fleet in the world and the largest dealer network in the industry.
Carpenter: We know we need to keep moving quickly to stay ahead of the competition. Doing so means we need to work with those who may have expertise that we don’t, so we collaborate with and invest in companies with a broad range of data and technologies to help us develop new capabilities, gain deeper customer insights and provide better analytics and consulting services.
There has been a lot of focus on automation in the construction industry. What kind of progress is being made?
Carpenter: Cat Command technology has been used with fully autonomous and semi-autonomous solutions for our mining customers around the world, and was recently introduced for use on construction equipment. In fact, we launched Cat Command for two products this year: the D8T dozer and 988K wheel loader.
At ConExpo 2017, an international trade show for the construction industries, we featured the D8T Command and 988K Command and gave visitors the chance to remotely operate a real D8T in Peoria from Las Vegas. We did something similar at the Edison Awards this spring, where guests could operate a D8T back in Peoria from the 40th floor of the New York World Trade Center.
De Lange: Cat Command is a great demonstration of how our products are flexible in meeting the different applications our customers are working in. It’s all about putting technology directly into the hands of the customer as we look to deliver the construction site of the future.
What does the future hold in terms of where technology will take Caterpillar and its products?
De Lange: The possibilities are endless. As more customers adopt digital technology, get connected and value big data, we can provide even greater value. Helping our customers be more successful with our products and services has been the cornerstone of Caterpillar for nearly 100 years, and will continue that tradition for the next 100.
Carpenter: Digital technology is evolving at such a rapid pace that we recently added more services to our portfolio of offerings. Cat Connect Services is the marriage of our deep expertise and our technology, making it easier for a customer to address everyday challenges without the need to be an expert in technology. It really allows them to focus on running their business.
Our goal remains to help customers be more successful with technology, products and services. Our customers are really driving what’s next. As their businesses continue to grow and attitudes toward digital technology continue to evolve, we will be right there with them—with the products and services to help them be successful. iBi