While much of the media is focused upon driverless cars, industrial vehicle makers have forged ahead, developing autonomous vehicles capable of delivering significant benefit to business.
During Australia’s recent mining boom school teachers, cleaners and plumbers quit their jobs in the big cities to become highly paid truck drivers in the country’s remote and massive iron and coal mines.
Now the mining boom is over and Australia’s formerly well paid mining truck drivers have headed back to their old jobs as driverless dumpsters take over. How the resource companies are deploying automated vehicles is instructive for other industries.
Caterpillar, one of the world’s biggest suppliers of mining equipment, has been working on self driving trucks since the 1990s and its Australian dealer, Westrac, boasts they were the first organisation to deploy autonomous vehicle technologies into open cast mines.
At the recent AWS Summit in Sydney James Scott, the Group Executive Director of Technology and Innovation of Westrac’s parent company – the sprawling Seven Group Holdings conglomerate – explained how autonomous vehicles are part of rethinking both their and their clients’ businesses.
When we think about the appropriate strategy within each of our companies, we think about the rate of change that’s required, do we need incremental change or do we need revolutionary change. Do we need to fundamentally change an existing business model or challenge a current customer proposition?
While driverless trucks may be revolutionary for the truck drivers that used to steer them, Scott sees them as more an incremental change.
An example of what we would refer to as incremental innovation is our autonomous haulage program with FMG at their Solomon Hub.
Fortescue Mining Group’s Solomon Hub comprises the Firetail and Kings Valley iron ore mines in the Pilbara region of Australia’s North West which together have a production capacity of over 70 mega tonnes each year. When the project was scoped in 2010, the initial feasibility study called for 75 manned trucks but in July 2011 FMG ordered 12 autonomous 793F vehicles as a pilot. Now with the mines up and running, FMG operates 54 driverless dumpsters which alone results in a $100 million capital saving on twenty trucks. The operational benefits are also substantial claims Scott.
Over four years they’ve moved 200 million tonnes and delivered a 20% productivity increase over their manned fleet. They’ve also reduced their pit to port costs by 43%
There were implementation costs to deploying the driverless vehicles such as solving for the vehicles stopping for puffs of dust on the road, something extremely common in Outback Australia let alone an open cast mine. Despite initial gotchas, the cost and productivity benefits were compelling.By replacing the drivers, Westrac and Caterpillar also found they can make further cost savings by eliminating some comfort and safety features on the trucks with weight savings of up to four tonnes per vehicle.
While the ongoing direct labor savings are obvious, it’s not all bad news for workers in West Australia’s mining industry. Westrac now has a technology workforce of over 100 people with specialist skills in robotics, data analytics, radio networks and GPS technologies to support the autonomous vehicles.
The data these platforms are producing is driving us to look at what’s the revolutionary change that we’re now going to drive into our customers’ operations…specifically in safety, productivity and cost reductions.
Mining data is something Scott sees as an opportunity across the entire Seven West Group, which sprawls across disparate industries ranging from mining to newspapers.
We are facing disruption across all of our industries and have experienced that no industry is immune to disruption.
Despite Scott’s view on incremental change, this story demonstrates how economic pain is the mother of accelerated innovation. The downturn in demand across the Australian extractive industries was dramatic and sudden so the reported savings were critical to survival.
The problem, both politically and for business, is what happens when traditional jobs are re-imagined for the automated age. Commenters like to talk about job elimination but it is really a shift in skills requirements. As automation in industry supporting segments like transportation and logistics become feasible, policy makers will need to help business steer towards training the next generation of skills. So far, that has not been top of mind.
Image credit - Via Direct Industry