Daimler Truck North America – Brochure 2019

Daimler Trucks North America: An intelligent company P ROJ E C T PA RT N E R S

Daimler Trucks North America: An intelligent company WRITTEN BY

Andrew Woods PRODUCED BY Kiron Chavda VIDEO BY Tre t t F i l m s 2

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DAIMLER TRUCKS NORTH AMERICA

Interface Magazine talks to Lutz Beck, CIO of Daimler Trucks North America, regarding its massive digital transformation into a totally connected company…

D

ata is the beating heart of virtually every business across every sector right now.

The race is on to rebuild companies that can

successfully extricate themselves from traditional, siloed structures to become smart, or intelligent, operations that truly harness the insights data provides.

The transportation industry is no exception, as digital disruption and an increasing demand for sustainability and automation continues to send shockwaves through the sector. Now, at the forefront of massive, seismic change, truck manufacturers are seeing a dramatic acceleration of change with autonomous, smart ‘connected’ and sustainable vehicles leading the charge. In this pursuit, companies are having to reconfigure their operations to be able to fully develop, manufacture and support their products.

CIO at Daimler Trucks North America is Lutz Beck, a man who spearheaded massive transformational change for Daimler Trucks in Asia. Beck heads up IT and all the connectivity, autonomous, and electric-related IT w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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A future driven by data

Future Vehicle - A smart and autonomous economic Top Fontsasset to match branding Technologies like IoT and AI have disrupted and xxxxxxxxxxx transformed all businesses. We are witnessing the next stage of evolution of IoT. It is interesting to observe how “things” play a role in the digital economy by combining technology and business models. Let us imagine a scenario – two “things” agree on a deal, make a contract, and do a transaction that is checked and verified.

That advances IoT to EoT – Economy of Things. The entire sequence could be done without a central authority. Decentralization and governance of such systems are the essential capabilities to build an EoT system. Distributed Ledger Technology (DLT) makes it possible that no human or central agency is involved in the process.

Blockchain is a well-known example of this technology.

The automotive industry has already adopted IoT in the form of connected cars. AI is permeating every aspect of design, manufacturing, field operations, and customer engagement in the automotive industry. Blockchain will be the next wave that has the potential to disrupt the automotive

industry and in general, the world of mobility. The vehicle would become an economic asset in the ecosystem.

There are many proof of concept and pilot examples of such a decentralized network in the industry. Electric cars autonomously negotiate and pay electricity prices at charging stations, pay the toll, parking charges, etc. Digital supply chain backed by DLT has a complete record of all components leading to interesting use cases like ethically produced parts, preventing counterfeit components, to targetted recall.

The entire life history of a vehicle is stored in Blockchain, making odometer to service records transparent to the buyer. With the trend of ever-increasing data from a vehicle and need to upgrade software safely, there are several advanced applications to have secured data management solutions in a decentralized way.

In a machine-to-machine business ecosystem Blockchain will enable vehicles to enter into transactions with each other and city infrastructure to execute multi-party transactions with a fair distribution of incentives.

Bosch, being a major mobility industry player, is early to recognize the potential of the DLTand is evolving the picture of the future.

Bosch is partnering with industry players, pioneering and shaping the active use of DLT. The metamorphosis of a vehicle from a tool of transportation into a smart and autonomous economic asset will define the auto industry of tomorrow.

Author: Sri Krishnan, Senior Vice President and Head – Innovation and Incubation Robert Bosch Engineering and Business Solutions Pvt. Ltd. For further enquiries, contact : Vinay Shetty Vinay.Shetty@us.bosch.com +1 248 752 3946

aspects for Daimler Trucks North America.

Beck transformed Daimler Trucks

“I was years in consulting, and joined

Asia – with its brands Mitsubishi Fuso

Daimler early 2000,” says the Stuttgart

and BharatBenz – into a truly connected

native, speaking from Daimler Trucks

company, moving the IT function front

North America’s Portland Headquarters.

and center of its operations. This work

“I was there for about nine years working

paved the way for Beck’s move to head

in Germany in different roles at Daimler

up transformational change in the US.

IT. Then, in 2012, I became CIO at Daimler Trucks Asia, based in Japan.”

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DAIMLER TRUCKS NORTH AMERICA

Daimler Trucks North America sees its main volume coming from heavy duty

“ …What is attracting people is the service around the device; the services you have on your phone. And this will be, in a certain way, the same for our trucks” — LUTZ BECK CIO, Daimler Trucks North America

trucks and has three times the headcount

and transform IT into a value-adding and

of Daimler Trucks Asia with a compar-

future oriented organisation.”

atively massive output. “I was given an

Beck is a devotee to the notion that

open field to do a lot of these innovations

IT is the driving force behind operational

here within the Daimler Trucks North

change. “Look, the IT role is significantly

America Group because they had started

changing due to technological disruption.

certain elements but there were still a

Everything we’re doing today is based on

few things lacking. That’s the reason why

technology, right? And, of course, this is

there is a clear task: to push innovation

our main field: technologies. So, from my w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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“ The IT role is significantly changing due to technological disruption. Everything we’re doing today is based on technology, right? And, of course, this is our main field: technologies.”

— LUTZ BECK CIO, Daimler Trucks North America

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point of view, the IT role in companies is changing significantly, and is more and more taking the lead in driving change.

In former times, IT was often seen as a supplier, whereas now it is key to developing new business models, processes and innovation. For me, IT is now as important as engineering. Look at some of the automotive companies, which don’t have the traditional or historical background we do, and you will see that a big portion of the people working for these companies are actually in IT. Because everything is driven more and more by technology, right? Now we need to use technology to disrupt and ensure success in the future. There are a lot of opportunities to develop new business models and revenue streams based on that. But you need to go outside of your comfort zone.

Companies that are positioning IT as their driver are having a lot more opportunities. Look at the traditional cost model of IT; seeing IT as costs will give you one on one, right? Means you save $1 in IT, it’s $1 for the company. But what we see is if you look at IT or technology-managed efficiency, you already have a factor of 10. And, if you look at technology-driven disruption, you have a factor of 100. The importance of IT is increasing and the companies that acknowledge that are 14

DAIMLER TRUCKS NORTH AMERICA

“ …digital transformation is actually a cultural shift and a mindset transformation.

This is the biggest challenge” — LUTZ BECK CIO, Daimler Trucks North America

w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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Digital transformation calls for bold moves.

Be bold.

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machine learning to analyze volumes of data and

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predict parts failures before they happen. Then,

made it easier for more than 10,000 custom-

we developed a mechanism that sends push noti-

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maintenance before they are left stranded. These new insights resulted in a 30% drop in unplanned vehicle downtime and created a positive feedback loop that enables the client to improve quality and prioritize their product development investments.

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w w w.th e in te r fa ce . n e t

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currently leading the way and using their savings in operations to reinvest into the strategic building blocks for the future.”

Daimler Trucks North America LLC is the leading heavy-duty truck manufacturer in the US and produces and markets commercial vehicles under the

YEAR FOUNDED

1942

REGION HQ

Portland, OR

Freightliner, Western Star and Thomas Built Buses nameplates. Daimler Trucks

point where, in the future, we will see the

North America is a Daimler company, the

truck as a device, which we basically sell

world’s leading commercial vehicle manu-

with surrounding services to our custom-

facturer and on the face of it, DTNA has

ers,” Beck explains. “And these surround-

a very traditional business model, which

ing services are all based on technol-

is essentially building and selling trucks.

ogy, and this is exactly where IT comes

However, Beck sees that notion changing.

in. We need to establish ourselves more

Even the perception of a truck is morphing

as a thought leader in innovations in the

as disruption, in the form of autonomous

company. We need to try certain things

driving and smart and electrical mobility,

to disrupt company processes, as well the

starts to hit home. “We have come to the

organization of the company itself.”

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DAIMLER TRUCKS NORTH AMERICA

Beck is currently turning Daimler

exactly how to work with data. So, we

Trucks North America into what he

need to use this huge amount of data for

describes as an ‘intelligent company’.

business decisions, for driving efficien-

But what exactly is an intelligent

cies and creating new business models

company? “An intelligent company is, for

and revenue streams. There are a lot of

me, one which aims at utilizing data as

opportunities and the more data you gain

a key asset to facilitate data driven deci-

or bring into the company, the more you

sion making as well as drive business

can do. You are able to work faster, and

optimization and innovation through

you are more efficient. This will result in

data, in a way they are permanently

time needed to think about new disrup-

disrupting themselves.”

tion or business models based on tech-

Beck explains, “If you look at successful companies nowadays, they know

nology. An intelligent company is at the end a data-driven company.”

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The Intelligent Company strategy positions IT as the technological enabler for all digitalization efforts at DTNA and focuses on six strategic building blocks: – Connected and Electrified Vehicles: Driving the development towards trucks as smart and clean digital assets – Autonomous Vehicles: Developing the technological capabilities for autonomous trucks and associated new business models – Customer Experience: Elevating customer interaction into the digital and data-driven age – Smart Factories and Logistics: Developing smart factories to enable DTNA to build smart trucks – Data Driven: Using data in all decision-making processes throughout – DTNA Cyber Security: Safeguarding IoT and connectivity

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DAIMLER TRUCKS NORTH AMERICA

“An intelligent company is, for me, one which works with its assets in a way that they are permanently disrupting themselves” — LUTZ BECK CIO, Daimler Trucks North America

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Forget horsepower.

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Today, vehicle data securely and privately connects with driver behavior data, traffic conditions and weather forecasts. This allows IBM Watson to help automakers offer more personalized journeys. ibm.com/auto

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See current list at ibm.com/trademark. Other product and service names might be trademarks of IBM or other companies. ŠInternational Business Machines Corp. 2019. B33627

CIOs: Leaders who drive business transformation Sponsored by IBM

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DAIMLER TRUCKS NORTH AMERICA

This strategic focus positions DTNA to lead by proactively embracing technology opportunities not only in IT, but also in the overall business model. “We’re working on the autonomous piece, which is certainly a game changer in terms of mobility for the future. Then we’re also working on connected vehicles. We have 250,000 connected trucks on the road, and this is of course a brilliant service for our customers because we have real-time services based on that, which we can provide to our customers. Of course, there is electric; we have already handed over pilot electric trucks to customers. If you look at distributional logistics, this is a game changer and will certainly help the environment.”

As well as keeping one eye on cyber security with regards to connected vehicles, Beck and his team are also focusing on the actual manufacturing and how to develop what is commonly known as the ‘smart factory’. “I refer to factory automation here and learning with data. Then you’re not just looking internally into the company. You are also looking at your connected supply chain, especially if you have situations where you need to ramp up or down, at speed. We are making our plants more efficient and intelligent, based on the data we have, by looking at all the sensors we use on our robots. All technological changes are an investment, yes, but this is also a new business model. It’s easy to create a business case for that as well. Everything you do in terms of a smart factory, in terms of data-driven strategies or big data, is not difficult from an investment point of view. We have a lot of examples in the big data space where, with a very, very small investment, you can gain a lot of benefits.” w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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The transformational strategy at DTNA

and so we established this strategy of

is simple according to Beck. In short,

Building the Intelligent Company. We have

Beck wants to work on the company’s

one block working on the fundamentals

digital foundation by preparing DTNA’s

and modernizing our foundation, while

backend for the future. “You find a lot

we work on the strategic building blocks.

of complexity in your backend and so

I now have both topics running in parallel.

we’re trying to simplify it by taking the

In order to get a bit more hold on what is

complexity out. Just placing innovation on

happening, specifically on the more inno-

top of a very complex backend doesn’t

vative topics. We are also setting up a

work.” In preparing the digital founda-

Digital Transformation Office to steer the

tion, DTNA is focused on modernizing

direction we are heading in, while look-

IT legacy systems and infrastructures

ing at all the innovative topics, such as

as the underlying foundation, driving

blockchain, virtual reality, augmented

operational excellence and developing

reality and big data, because everybody

DTNA-wide comprehensive data stor-

wants to be part of these. We needed to

age, management and analysis capabilities. DTNA is also moving towards an open enterprise platform strategy with aligned technology roadmaps. “Because, there are topics which we cannot solve by ourselves,” Beck admits. “We need to have basically more partners, and authorities in there to help us solve our problems.”

Coming into an environment already steeped into a certain step of innovations while dealing with a very complex foundation throws up challenges, but Beck reiterates the importance of simplifying the back end. “It’s difficult, because all these strategic building blocks are running and everybody wants to jump on that, 26

DAIMLER TRUCKS NORTH AMERICA

bring some structure into place, because as much as we want to try everything, there is so much we need to learn.

Some of these things are not yet ready for us, or the technology is not yet at a point where we can really use it, or it just doesn’t make sense just for the industry at the moment. This process needs to be steered in a certain sense and that’s what we are doing with the digital transformation office, to get a full visibility about all the topics which are running in these areas. We might want to do a POC or an MVP, but let’s fail fast w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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in the approach. If we notice it doesn’t make sense, then let’s just stop it, right?

Because if it doesn’t bring business value to the company, then we shouldn’t do it.”

Undertaking a transformation of this magnitude nearly always disrupts the workplace and its incumbents, which can be the biggest challenge of all.

“Everybody thinks that digital transformation is a technology transformation,” says Beck. “But digital transformation is actually a cultural shift and a mindset transformation. This is the biggest challenge. Technology is just an enabler and will never be the limiting factor anymore.

Because if you look at the cycles of the development of technology, we will not be able to apply all these technologies as fast as things are evolving. We need to work on this cultural shift and the understanding of digital transformation. What is it about? It’s more about new ways of working, new business models, new revenue streams, new jobs for people. You can easily be blocked by resistance coming from the people, because they fear change.

So, we are doing a lot of communication to help people understand. We recently held a Digital Inspiration Day, just to bring our people up to speed with what we are doing. I brought in people who were running successful transformations from 28

DAIMLER TRUCKS NORTH AMERICA

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outside of our company to explain to my leadership team how things are going.

I’m trying also to bring top management into discussion with leaders from other companies, in order to understand how they deliver transformation.”

As DTNA develops as an innovative intelligent company, it is constantly working with young, fearless start-ups and leading innovators. A recent hackathon in Austin, Texas was conducted to find fresh new ways of problem solving.

Daimler [Trucks North America] is trying to think like a start-up by constantly engaging with new talent. “It is good for us to learn how start-ups are acting and it’s good for them to see what the industry doing,” Beck explains. “We have lots

Lutz Beck CIO Daimler Trucks North America

of discussions with start-ups to leverage different points of view. We need to be able to decide what can we give outside and what to keep inside. Because, that’s a potential new business model for us. If

Lutz Beck is Chief Information Officer for

you look at the truck, it’s a device, noth-

Daimler Trucks North America (DTNA).

ing else. Now, if you look at the phones,

In his role, Lutz is actively transforming the

there is not much difference anymore,

organization by implementing the new IT

nowadays. Yes, maybe one has a better

strategy, “Building the Intelligent Company”

camera or whatever. But at the end of

and by leading DTNA’s digital transforma-

the day, what is attracting people is the

tion efforts. He values disruption, innovation,

service around the device; the services

and changing the game.

you have on your phone. And this will be, in a certain way, the same for our trucks; w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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the services you build around them and how convenient it is for our dealers and customers to use them. And that’s exactly what we need to work towards.”

A majority stake in Torc Robotics was acquired recently, to help bolster Daimler’s work on the autonomous front. This September saw the start of testing of Daimler Trucks’ SAE Level 32

DAIMLER TRUCKS NORTH AMERICA

“As DTNA develops as an innovative intelligent company, it is constantly working with young, fearless start-ups and leading innovators” — LUTZ BECK CIO Daimler Trucks North America

4-intent heavy-duty trucks on Virginia

day. You need to create new things. You

highways; a major step in Daimler Trucks’

need to establish relationships and new

plan to release the trucks in 10 years’

organizational ways of working. Daimler

time. The next decade certainly repre-

Trucks North America has a very big

sents a revolution for companies like

history of building trucks, but it’s also

Daimler Trucks North America and Beck

our duty to do something different.”

is certainly comfortable to be at the forefront of such massive change. “You need to go out of your comfort zone every single w w w.d a i mle r-tr uc k sn or tha me r ic a .com

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