How companies can mine technology for the energy transition
Denise Johnson, group president of Resource Industries at Caterpillar, explains the innovations that will define next-gen industrial equipment, from electrification to automation.
Caterpillar makes massive things. Things like earth-moving equipment and other machines that must be broken down and reassembled from 15 cargo containers full of parts at places like hard-to-reach mines after being shipped around the world. That big. Denise Johnson, group president of Cat’s $12 billion Resource Industries segment, oversees automation and innovation, product and operations, engineering and component development, and global strategic procurement. As the transition to electric energy requires more mined minerals, Johnson says the nearly 100-year-old infrastructure company is leveraging technology to help its customers do that work sustainably, efficiently and with purpose.
Kate MacArthur: What signals are you watching to help identify future scenarios for the business?
Denise Johnson: We talk directly to our customers; from mining to heavy construction companies. A lot of mining takes place in very remote locations throughout the world. They need to have very productive equipment that has a maximum amount of uptime. They are struggling in many locations throughout the world with labor. They're pushing for more automation for when they do have workers on site to make the work more consistent. There’s also a training element, and in many cases, it’s taking people out of the equation because that makes the mine more productive and safer. When we listen to their feedback, it's for equipment that works flawlessly, that's very reliable and that requires fewer touch points from a human intervention perspective.
MacArthur: Do you have a formal foresight organization to help with that?
Johnson: We have a number of venues where we leverage data and analytics to be able to plan and predict what's going to be needed in the future. Certainly, we're taking a lot of the analytics that would be associated with future demand for commodities, and we're leveraging that to understand the demand for our equipment moving forward. It's leveraging all those signals, those direct interactions, and then staying close to them along the way to know exactly what they need.
MacArthur: What is the lead time that you work with?
Johnson: Right now, many mining companies are making very strong ESG statements and commitments for greenhouse gas reductions in various steps and time horizons. Some are looking for 20% to 30% reductions by 2030 and 100% by 2050. That's 30 years of planning where they're saying they need to take all the diesel-powered equipment out of the equation, and they're looking for something that is zero-greenhouse gas emitting. That gives us a pretty wide range of a horizon to hit, and it sets us on our trajectory of what we're going to invest in from a research and development perspective. We're having to do things much sooner than we've ever had before. Many mining companies are asking for electrified equipment by 2027 and 2028. Well, that's a really tight timeline to develop brand new equipment. And we’re having to develop very differently than we ever had before to hit those timelines.
MacArthur: What considerations do you think about to manage risk?
Johnson: Customers are first and foremost concerned about the safety of the people on site. When you're bringing in new technology and there are a lot of unknowns, you have to build in redundancy in the safety measures that you're putting in place, so a process or technology failure doesn’t create any kind of safety issue. Next, the last thing that a mining company wants is a technology that breaks down or doesn't work. Their lifeblood is production. There's a real risk that the whole site infrastructure and Wi-Fi network and connectivity goes down such that everything comes to a halt all at once. Again, you need to have multiple layers of redundancy built in.
“Many mining companies are asking for electrified equipment by 2027 and 2028. Well, that's a really tight timeline to develop brand new equipment. And we’re having to develop very differently than we ever had before to hit those timelines.”
MacArthur: How do you work through training issues?
Johnson: We're doing a lot with machine learning, with AI, with even automated virtual reality tools. Certainly, nothing's going to substitute for the mechanics on the ground that are repairing the machines. We can leverage our technical experts, even though they’re working in our facilities around the world. We can leverage tools like VR goggles on a call and walk through how to repair something virtually.
MacArthur: With the electric and digital transition, how will technician skill sets change?
Johnson: The diversity of skills sets needed will increase. In the past, a mechanic skill set worked. Now and into the future, it will require the combination of mechanical, computer and electrical competencies to support the automated, autonomous and even electrified products.
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