Caterpillar 2013 Annual Report Download - page 49

CATERPILLAR INC. 2013 YEAR IN REVIEW
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RESOURCE INDUSTRIES
Caterpillar Product
Development Community
Brings Innovation to Bear
The future holds many challenges for Caterpillar customers. Our global
product development community is working now to bring innovation to
bear on those future challenges, and turn them into opportunities for
long-term success.
In recent years, Caterpillar’s product development has largely focused
on one of the most signifi cant opportunities in our history: compliance
with Tier 4 emissions standards in the United States and Stage IV emis-
sions standards in the European Union (EU). Since the implementation
of Tier 1 and Stage I emissions standards in 1996, these challenging
regulations have driven an extensive overhaul of our product lines to
reduce emissions by about 90 percent over a 20-year period. With the
fi nal phases of both standards nearly upon us, the competitive landscape
is changing rapidly as we move into a market where customer needs,
rather than regulatory compliance, will drive product development.
This means Caterpillar must innovate to differentiate our products and
solutions from the competition in order to meet customer needs better
than ever before. Technology is key to this effort and will ensure we are
well-positioned to meet these needs. In 2011, Caterpillar’s product
development community began to develop an enterprise product and
technology strategy by exploring how key trends, business demands,
sustainability and other forces will impact our customers. This commu-
nity then worked backward to identify key themes and technologies.
The result was an integrated product and technology strategy to guide
us into the future.
The strategy encompasses three themes – Energy and Power Systems,
Machines and Machine Systems and Automation and Enterprise Solu-
tions. Each theme includes customer-focused goals that serve as targets
against which progress can be measured. Research activities currently
underway within these areas include efforts to reduce customer owning
and operating costs, improve productivity, enhance safety and reduce
greenhouse gas emissions.
We’re making great progress so far. The strategy is coming to life in
various forms, one of which is technology demonstrations. These events
showcase key new technologies and system solutions to the enterprise.
The benefi ts of these demonstrations are two-fold: product and com-
ponent groups get to explore new technologies and maximize potential
applications, while their interest and response helps set the velocity
for further development of these technologies. Eight technology dem-
onstrations were held in 2013.
While it is important to innovate and explore many new ideas, only those
technologies that can be integrated into new products and provide
customer value move forward in the development process. Progress is
measured by tracking technology transfers. These occur when a new
technology has developed and matured enough to meet a comprehensive
set of agreed-upon requirements, known as Technology Readiness
Levels, or TRLs. At TRL 4, the new technology is adopted by a component
or product group for commercial use. Last year, over 25 technologies
reached this level and transferred to groups for use in our products.
“Our team is successful when we develop technologies that make their
way from research into commercialization and bring value to our cus-
tomers,” explains Lou Balmer Millar, director of Research and Advanced
Engineering for the Product Development & Global Technology Division.
“We do this through enterprise alignment, technology leverage, collab-
oration and assurance of technology readiness upon transfer to product
groups. We’re thrilled to be part of the global Caterpillar team working
together to achieve common enterprise technology goals.”