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Marc Weston, Danfoss Power Solutions Chief Marketing Officer and Senior Vice President

Industry seeks partners with proven performance and reduced risk

Many OEMs will attest that the repercussions of Tier 4 regulations continue to challenge the tried and true methods of decades-long systems engineering. Large Tier 4 programs continue to deplete much of the resource capacity at most OEMs, and as engineering resources are taxed, little focus and few efforts can be placed on truly innovative, next-generation vehicle hydraulic subsystems. Many OEMs are finding that they have no choice but to maintain current machine hydraulic architectures until after Tier 4, challenging suppliers to come to the table with a new value proposition: bring validated solutions and be willing to partner with customers on a new level.

In addition to the Tier 4 changes, increasing functional safety requirements driven by import regulations in Europe are also consuming a lot of manufacturers' resources. As machine complexity increases, especially in the vehicle control system area, OEMs are challenged to stretch resources even further to deal with the new functional safety certification expectations of their machines. At the same time, the capacity of dedicated specialists needed to maintain and improve the control systems on existing production machines just isn’t there. This leaves no room for innovations of new machine control function development.

OEMs that are winning are those investing in leading tools and control system platforms that enable the rapid customization and deployment needed to offset these key resource challenges. Modern simulation-to-software tool chains have the potential to dramatically improve the development times and maintenance of vehicle control systems, directly improving the productivity of the OEM in addition to or instead of staffing growth. Pre-engineered, easily implemented, and customizable control solutions are in high demand, and true supplier partnerships are becoming priceless. OEMs don’t want projects, they want solutions.

As Tier 4 and functional safety requirements take full effect on machine designs, OEMs are seeing an increasing need to control vehicle bill of material (BOM) costs. It is common for Tier 4 integration programs to be immediately followed by aggressive cost-reduction programs to improve competitiveness of the new vehicles and offset new emissions equipment cost. Some OEMs are taking a different approach and investing in machine differentiation strategies through enhanced machine performance, challenging suppliers like Danfoss to sharpen our focus on pre- engineered and pre-validated solutions that are easily integrated and easily customized by our OEMs. There is just no time, nor OEM resources, to run lengthy development projects—solutions that are proven and ready to deploy are very attractive in today’s market.

Meeting the new need

As a first-level supplier, Danfoss is seeking to relieve these OEM challenges by investing heavily in systems engineering capacity, control systems software competency and tools, and machine integration processes that allow us to partner directly with OEMs to bring new, high-performing solutions to the market that offer our customers true differentiation. As we set our strategic direction to meet these evolving customer needs, we focus on three critical success factors: speed, performance, and OEM risk. Speed was the topic of my article for SAE Off-Highway Engineering last year, and with this issue, I’ll focus more on performance and OEM risk.

Partnering with our OEMs to meet their vehicle design challenges starts at the Danfoss Application Development Centers (ADCs). At our ADCs, OEM and Danfoss engineers work side by side to co-design and develop complete vehicle subsystems with hydraulic components, electronics, and software. These co-developments have always been a core element in the Danfoss approach to customer engagement and vehicle innovation, but over the last few years, we’ve taken it one step further.

At our ADCs, customers can see our pre-engineered vehicle systems in action on real world vehicle-level test facilities. Most importantly, customers are able to evaluate firsthand the value that a Danfoss system has compared to their baseline. Just like when you are buying a new car, there is nothing like taking a test drive to confirm the value to you before having to make your purchase.

Being able to see solutions right before your own eyes confirms its value, and our ADCs eliminate the risk an OEM has taken in the past by awarding business to an unproven supplier with nice PowerPoint claims. We believe this willingness to prove your solutions prior to being awarded new business should and will become an expectation in our industry.

As innovative new technologies and solutions enter the industry, further need also arises for experienced technical experts. OEMs need experts to partner with when working on the leading edge of the industry’s newest technologies, and again, as resources run slim, true supplier partnerships are invaluable.

Where we are going

Danfoss continues to invest and improve our systems-level design, development, and verification toolbox to best support customers by bringing proven solutions at the vehicle level that can be easily integrated and customized. We do this because we know in the off-highway vehicle industry, trust between OEM and supplier partners is critical as competition continues to challenge from all sides. That is why our commitment to the ADCs makes sense.

Suppliers have been told many times in the Tier 4 era, “Prove it or lose it,”and we understand why. When our system engineers are able to demonstrate market leading machine performance on prototype machines right before a customer's eyes, they have to have it—that high performance combined with low risk to the OEM from a proven solution wins every time.

Danfoss is committed to being our customers’ strongest partner in mobile hydraulics. The ADCs allow us to demonstrate this not only by the physical aspect of the vehicles, but also in the expertise that is shared and gained by working with us as a partner resulting in increased value. Our ADCs are a great forum for this exchange and customer reaction is the evidence that “prove it or lose it” will be the new expectation of the future in the off-highway industry.

Marc Weston, Chief Marketing Officer and Senior Vice President, Danfoss Power Solutions, wrote this article for SAE Off-Higway Engineering.

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