Autonomous Construction Vehicles: IT and Efficiency

Michael Krigsman: We are live at Sapphire Now 2018. I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk. Right now, we are talking with Colin Boyd, Chief Information Officer of Komatsu America. That also includes Mining. Hey, Colin, how are you?

Colin Boyd: Fine, thank you. Good to meet you.

Michael Krigsman: Komatsu America and Mining, tell us about that.

Colin Boyd: The two predominant businesses in the company are construction and mining, construction being the largest, and that's where the company's origins come from. If you see very large yellow machines, bulldozers and excavators, working in construction sites, there's a good chance they'll be Komatsu. Then they also have a mining business. The giant trucks that work in the surface mines, a good chance they'll be Komatsu as well.

Michael Krigsman: Oh, I've seen those. Those are really big.

Colin Boyd: Really big. Yeah, it's a little intimidating when they go past, a truck the size of a house carrying more than 200 tons.

Michael Krigsman: Now, these machines are chock full of really interesting technology.

Colin Boyd: Oh, yes. You talk about autonomous vehicles; the mining industry has that already. Some of the technology that's going into the construction products, they've had the same technology coming out. We have a product called Smart Construction. You can map a three-dimensional model of your construction site. You can then map out the three-dimensional model that you want it to look like when you're finished. Here's where the material is, and here's what it has to look like. We want a 6% grade slope. Press the button, and let the excavator deliver.

Michael Krigsman: Now, how about data because, where there's tech, data is soon to follow?

Colin Boyd: Yeah, I think most people like me are adjusting our brains to what's big data. I'm old enough to remember when megabytes and gigabytes was big data. Now, you can't count the terabytes. We're into petabytes and exabytes.

The most complex machines have maybe 8,000 monitors on them streaming data real time off the control systems on the machines. Yes, it's a lot of data.

Michael Krigsman: You have mining, and you have data mining. [Laughter]

Colin Boyd: Yeah, so in my world, mining probably has two different meanings. We produce mining machines, and we mine the data off the mining machines.

Michael Krigsman: I love it. You've got these machines and, basically, it's like IoT at global scale. [Laughter]

Colin Boyd: Yes. They're huge capital assets. Customers have hundreds of millions of dollars tied up in these machines because it's a capital intensive, equipment intensive business these days. Again, as a supplier, if you want to be responsive to your customers, you need to make every effort to help your customers make the best use of those assets.

Michael Krigsman: How about the way you run your business? You're the chief information officer. Tell us about that role and the scope of your responsibilities.

Colin Boyd: I think it's evolving. The distinction for me between a CIO role and the CTO role is kind of starting to blur. What traditionally used to be your CIO role — your infrastructure, applications — when you get into the product technology, IT then becomes part of the solution. So, you're integrated with the engineers designing the product and the people servicing the product. Really, you become a de facto CTO even if you're not officially a CTO.

Michael Krigsman: How does that actually work because, yes, historically we think about IT as being the folks who are running the internal, say, backend systems? If we have a very expensive definition, maybe that means applications as well. But, this is something quite different that you're describing.

Colin Boyd: Yes. If you went back ten years prior to the big data revolution, yeah, the IT, you could have called us the backroom guys. We were usually visible when things weren't working. As long as things are all working, okay, that's where you were.

My world now is both, so talk about a large mine with hundreds of millions of dollars of capital equipment being deployed at the mine. Small percentage improvements in the operational efficiency of that equipment mean millions of dollars to a mining customer. So, it becomes very much a partnership.

They are trying to optimize their overall operational efficiency at a mine. That would include all of their people, as well as all of the equipment. But, the equipment is the big money. Mining stopped being a people-intensive industry a long time ago.

Michael Krigsman: You're collecting technology-related data that then translates directly into business information.

Colin Boyd: We are close to a position where the machine can start to call for maintenance. Machine to machine is coming. Collision avoidance will be an initial place to start. You really don't want one of those giant trucks [laughter] hitting another giant truck. That's not good.

Michael Krigsman: [Laughter]

Colin Boyd: Safety, for sure, and imposing operational parameters that would stop a machine operator taking it out of the safety envelope of the machine, overloading a truck. Yeah, the trucks all have tonnage sensors on them, and they'll tell you to stop if you're trying to overload them.

Michael Krigsman: That's where you're changing this machine and operational data into something that has concrete business value.

Colin Boyd: Yes. One example, we know where the half a million machines are. We know how much they're being used. Therefore, we know how many hours they're going through in terms of operations.

This gives us direction in terms of when their scheduled maintenance is coming up. So, if we know that you're hammering the machines really hard in one country, the spare parts inventory will move in. If we see that your market has declined in your country and a lot of those machines are parked, we'll move that inventory elsewhere.

Michael Krigsman: Now, Colin, we're at Sapphire Now, and so I would be remiss if I didn't ask you, what are you doing with SAP?

Colin Boyd: Yeah, we have quite a number of systems around the world, so KAC ([Komatsu America Corporation)] and KMC [(Komatsu Mining Corporation)], the two companies I'm accountable for. You would probably call them predominantly SAP shops. We're putting the plans in place to move for S/4HANA, so that's one of the main reasons I'm here at Sapphire is to learn more about that process.

Michael Krigsman: It's really not just the machines, but that data piece is equally important, or maybe that's the lever that helps the customer get the ultimate, maximum financial benefit out of the machine that is possible.

Colin Boyd: Yes. To do that, you have to shift the culture in your organization. You have to move from, "We are a manufacturer of machines," to, "We are a provider of solutions." Some of the technologies they've been talking about here the last two days are definitely going to come into play.

You can see a machine learning environment. You could imagine then a whole fleet of machines trying to optimize themselves as a fleet rather than an individual machine trying to optimize its own individual actions, whatever it's doing. But, it's not somewhat conscious about the rest. You could have all of the machines meshed, communicating with each other and making recommendations on overall efficiency of the entire operation with all the machines together. It's coming.

Michael Krigsman: I can imagine a swarm of machines, each the size of a house.

Colin Boyd: Yeah.

Michael Krigsman: That's something to think about.

Colin Boyd: You'll see it in your lifetime. There's no doubt about that.

Michael Krigsman: Wonderful. Colin Boyd, thank you so much.

Colin Boyd: It's been a pleasure.