Three components of a connected rail eco-system

Three components of a connected rail eco-system

With 200 billion Internet of Things (IoT) objects humankind has today1, connectivity is embedded at every aspect of our lives. When it comes to connectivity within the transportation sector, highway vehicles such as cars, trucks and busses get the spotlight; yet one would think whether trains would be a better candidate to adopt connected solutions given some aspects of operating trains is less sophisticated.

For instance, operating an individual train, in comparison to operating highway vehicles, features less variables in terms of other moving vehicles on the tracks and different routes to take. Trains move on set tracks and in one direction, often without a significant number of intersections. Meanwhile, creating a connected rail eco-system goes beyond the individual trains. In this article, you can find the key components of a connected rail eco-system, and what the future relies on in each of these.

No. 1: Asset-level connectivity; connected locomotives

While the physical look of locomotives has not drastically changed over the last decade, what is beneath that initial look has been constantly changing. Today’s modern locomotives feature hundreds of sensors; these sensors do a variety of tasks ranging from tracking internal attributes such as level of consumables, to external attributes such as wind speed and direction. 

Moreover, many of these connected solutions go beyond just the reactive monitoring. For instance, PrevenTech® Rail, newest remote engine monitoring solution by Cummins, delivers proactive recommendations that allow customers to increase equipment availability, improve safety, and enhance operational efficiency. 

The future of asset-level connectivity relies heavily on integrating stronger artificial intelligence and machine learning into the already existing network of sensors. This integration will make each locomotive capable of predicting future issues, then execute over-the-air updates or schedule needed preventative maintenance. 

Three components of a connected rail eco-system

No 2: System-level connectivity; connected operations

At the system-level, the focus moves from individual components such as locomotives and railcars to managing the complete rail network and the fleet, whether it is freight or passenger focused. This includes better utilization of rail equipment through scheduling and integrating connectivity established through different elements of the network such as locomotives, stations and tracks. 

The future of system-level connectivity is on the ability to harness the data each connected equipment brings on to maximize the efficiencies and safety while lowering costs. For instance, the sensors on a station could track the number of passengers waiting, and communicates this information to the upcoming train. Meanwhile, a third sensor located in between the inbound train and the station could communicate a weather event, requiring the station to dispatch another train. In this example, data from three different assets can be harnessed in real-time. The key enabler for this to work efficiently will be the networking technologies that can harness the data collected, and the computing capabilities that can process the data to create actionable recommendations. 

No. 3: Intermodal connectivity; connected modes of transportation

Whether it is passenger or freight focused, rail transportation often is coupled with other transportation modes. Someone might need to take the bus to go to the train station, or containers carried by trains to a depot may require trucks to carry them to their next stop. 

Intermodal connectivity entails the integration of adjacent non-rail transportation networks into the connected operations of a rail network. Here’s the good news; much of this non-rail network (air, marine and on-highway based) have also advanced in building their own connected operations within their systems.  

The future of intermodal connectivity will be not only technology driven, but also collaboration driven. Unlike the asset and system-level connectivity, rail operators will get out of the boundaries of their businesses and build deeper collaborations with other transportation companies to bring intermodal connectivity to life.

The future of rail is connected, and a combination of emerging technologies, skills and partnerships lay the path to this connected future. The good news for rail operators is the presence of partners they can collaborate with, such as Cummins Inc. that can extrapolate connectivity learnings from many other transportation markets into the rail sector.

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References: 1 Intel. (n.d.). A Guide to Internet of Things [Infographic]. Retrieved from https://www.intel.com/

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

CapEx outlook for the mining industry in 2021 and beyond

CapEx outlook for the mining industry in 2021 and beyond

Our Mining Team at Cummins always makes our partners’ goals our goals. We use our technologies, insights and people to help the mining industry deliver its goals. 

In this article, the focus is another important aspect of the mining industry: capital expenditure (CapEx). CapEx is the mining companies’ investments in the products and technologies as part of their operations. It includes facility improvements, new mining equipment, and beyond.

The annual capital expenditure (CapEx) of the world’s top 40 mining companies is $78 billion1. This is about the same as the annual gross domestic production of Kenya or the Dominican Republic. In other words, every year these 40 mining companies invest into their operations the equivalent of a medium-sized country’s annual economic output. 

In this article, you will find the dynamics linked to the change in the mining industry’s CapEx in 2020. You will also find insights around the mining industry’s CapEx outlook for 2021 and beyond. Let’s start with a look at 2020.

2020: Decreased GDP, flat mineral production, and reduced CapEx

Global GDP has decreased

Real gross domestic product (GDP) of the world decreased by over 4% in 2020, according to the International Monetary Fund. This was a much larger decrease compared to the 0.1% decrease during the 2008 financial crisis. GDP is a good indicator of overall economic activity; and a 4% decrease means less manufacturing of goods, and less use of minerals. 

Mineral production stayed flat to down

The amount of minerals extracted around the world remained flat to down in 2020. In the U.S., the total value of mine production decreased by 8% in 2020. Globally, coal production has decreased by 6%, according to the International Energy Agency. Meanwhile, the production of all non-fuel minerals went up just 2% in 20202. Reduced economic activity meant a decreasing need for minerals used in producing other goods. 

Annual capital expenditure of mining industry

In 2020, mineral production was impacted by COVID-19 related mine closures. Many mines needed to stay closed for weeks. Moreover, when they re-opened they had safety measures that slowed down the production. 

Mining CapEx went down significantly

In the light of reduced demand, the world’s largest miners have reduced their CapEx by a cumulative of over $7 billion in 20203. This CapEx reduction was no surprise, as the mineral extraction remained relatively flat for the year. 

COVID-19 related closures had a two-pronged impact on CapEx. First was around mine closures. As mines worked less, the need for CapEx remained lower. Second was around operational challenges. Even while the mines were running, there were operational challenges in executing some activities tied to CapEx. For example, some investments within mines were delayed due to supply chain constraints.

2021 and beyond outlook: Increasing GDP and mining production

Global GDP to increase

Many economists agree that the world’s GDP will bounce back in 2021 by a 4% to 6% increase, then continue to stay positive in the following years. This means more production and an increased need for minerals and metals. 

Mining production to trend upwards

The strong GDP growth will likely translate into an increased need for minerals and metals, resulting in an increase in their production. There is always the question around whether there will be a lag between increased economic activity and increased mineral production. We expect the lag to be minimal and the overall mineral production to closely follow the increase in GDP. A key reason for this expectation is miners’ ability to leverage the existing capacity as the need for production emerges. One potential risk that could slow down miners bringing the capacity online is any regional restriction around employees coming back to sites due to the pandemic. 

Let’s now switch to CapEx forecast given these expectations in GDP and mineral production.

Mining CapEx to be up starting 2021 with varying pace and focus 

There is a much clearer linkage between GDP growth and increased mineral production. Meanwhile, the impact of increased mineral production on CapEx is not as clear. For instance, the amount of minerals produced have mostly been increasing since 2012. Yet, the mining industry has successfully decreased its CapEx four out of eight years. 

In other words, the mining industry kept producing more while managing its capital expenditures. There were many means to accomplish this. Improving financial performance and reducing maintenance costs, increasing mining equipment productivity and boosting mining equipment’s efficiency have been three of these levers. 

For 2021, it is much likely the mining industry will increase its CapEx, but with a varying pace of CapEx recovery. The 2021 CapEx of the mining industry would likely not increase as much as the decrease experienced in 2020. Instead, the CapEx increase in 2021 could be a portion of the decrease in 2020. 

Beyond 2021, the shift in the focus of the mining industry’s CapEx will also be more prominent. The change in the mining industry’s CapEx would likely not be uniform across the production of different minerals. We expect the change in CapEx associated with the production of tech metals and rare earth elements to outpace the that of fossil fuels, such as coal. These tech metals and rare earth elements are frequently used in high tech devices that bring us the newest technologies. In fact, the global production of rare earth elements went up by 9% in 2020. Production of many other minerals went down or stayed flat during the same period. 

Interested in deepening and broadening your expertise in the mining industry? Sign-up below to receive periodic insights, trends and news customized for the mining industry.

References: 
1PwC (2019). Mine 2019: Resourcing the future [PDF document]. Retrieved from https://www.pwc.com/
2United States Geological Survey (January 29, 2021). Mineral Commodity Summaries [PDF file]. Retrieved from https://pubs.usgs.gov/
3S&P Global Market Intelligence (July 2020). Miners' Guidance Indicates 12% Capex Drop in 2020 Due to COVID-19 [Web article]. Retrieved from https://www.spglobal.com/
 

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Diversity and inclusion accelerate among mining sector

Diversity and inclusion accelerate among mining sector

The Mining industry continues to apply various methods to improve its financial performance. Most recently, diversity and inclusion became two of the methods many miners turn to. Historically, the linkage between improved diversity and inclusion, and better financial performance has been more theoretical than quantifiable. Meanwhile, over the last decade, many companies have been able to demonstrate this connection through hard financial performance data. 

For example, let’s take the companies that are at the top quartile when it comes to diverse executive teams. According to McKinsey, these companies have a 36% higher likelihood of financially outperforming their peers. This study also included metals and mining companies. 

Diversity and financial performance

The linkage between diversity and financial performance is hard to quantify, but we have compiled real-life experiences from the mining industry to better demonstrate the relation. 

Driving financial savings for miners with diversity and inclusion

Ralf Mueller, Mining Leader for Cummins Latin America is a native of Germany, has been in mines across five different continents through his 20 years in the mining industry. “Mining is an exciting and high pace industry. I have enjoyed the most how well mining’s multi-cultural community is connected. A combination of this multi-cultural community and use of inclusion boosts the industry’s innovations,” says Mueller.

Recently, Mueller was part of a team that leveraged the power of inclusion for lowering equipment downtime, which resulted in financial savings. 

“My heart sunk when I first heard it. A mine operator asking a mine haul truck manufacturer to buy a truck, but not to use our engine,” recalls Mueller. “There are no two ways about it; we had a problem,” Mueller adds.

Mueller was asked to lead a rapid response team tasked to address the customer’s concerns with one of our products. “We had a very diverse team, both visible diversity and intellectual diversity. We had team members from four different continents; different races, backgrounds and cultures,” Mueller remembers. “For all the years I have been working at Cummins and partnering with the mining industry, this was the pinnacle of seeing how inclusion and diversity can deliver improvements that yield measurable financial results,” added Mueller. 

This team, fueled with the power of inclusion, reduced the downtime associated with the engine by more than 60%. This resulted in multi-million dollar savings for the miners, mine-haul truck manufacturer and Cummins Inc.

“When I look back and ask myself, what made the difference. It was a combination of two things. The team’s inclusiveness in hearing each other’s perspectives and our sharp focus on solving the customer issue made all the difference,” Mueller reflects back.

Technology innovations in mining through diversity and inclusion

Lanre Ige, Vice President of Power Generation Solutions, entered the mining industry in 2016; a unique time because it was during the aftermath of the mining super cycle of the 2010s. “For many, the massively-sized equipment is what draws them to mining. For me, those engineering marvels are amazing, but it is the emphasis that miners put in strategic partnerships, and relationships based on trust, and mutually delivered value that excites me the most about the mining industry,” says Ige.

Ige has literally worked with all of the world’s top miners while leading Cummins Mining end-user accounts. These experiences also brought great examples of diversity and inclusion in the mining industry. 

“It was one perfect fall day in Columbus, Indiana. We were hosting a team from one of the world’s top miners for a discussion focused on technology and innovation,” recalls Ige. “We had lots of healthy debates around technology; lots of diverse thoughts were brought up,” adds Ige. The team then went on to visit one of the Cummins engine plants. “During the tour, our partner pulled me to the side. I didn’t know what I should expect to hear,” says Ige. “They were amazed with how the female colleagues within our team play a pivotal role in our innovation efforts, how their inclusion felt so natural, and how we come across as one team,” adds Ige.

“It is great to see the mining industry recognize the role of diversity and inclusion in bringing technology innovations to life. What is even more exciting is how all miners are setting aggressive goals around achieving gender parity and improving diversity,“ says Ige.

Accelerating your diversity and inclusion journey

With the exciting examples above, you might be asking yourself, “How can I accelerate the diversity and inclusion journey within my organization?” We have asked the same question to Eric Rogers, Executive Director of Diversity & Inclusion at Cummins. Cummins is frequently recognized for outstanding work in diversity and inclusion. Most recently, a partnership between the Massachusetts Institute of Technology (MIT) in Boston (U.S.) and Glassdoor found Cummins the No. 1 culture for diversity

Here are Rogers’ thoughts on how to accelerate diversity and inclusion journey in your organization: “First, share best practices on effective diversity, equity and inclusion programs among your organization. Second, pursue collaborative efforts with others beyond your organization to galvanize collective action,” says Rogers. 

Rogers also went on to outline the following four tips to help you accelerate diversity and inclusion within your organization. 

  1. Trust the Data. Data consistently shows that companies with diverse and inclusive teams are more innovative and profitable. Demographics are changing the marketplace; and technology is changing the mining industry. The companies that will succeed in the future are those that embrace these changes now. Different skills, knowledge and attributes will be needed to stay competitive in the future. Hire and develop diverse leaders and employees who reflect the changing marketplace.
  2. Set the Tone at the Top. As the leader, create a safe environment where all employees can speak up, be heard, and feel welcome. Leaders can make underrepresented employees feel included and valued by prizing authenticity over conformity.
  3. Communicate to and for a More Inclusive Audience. Perceptions of mining as a hazardous and physically demanding job with long hours in remote locations may often deter potential candidates. Emphasize the breadth of career paths available in mining while communicating about job opportunities. In addition, focus only on the minimum requirements within job descriptions. For example, if a college degree is not truly required, it should not be presented in the manner on the job description.
  4. Make Diversity Programming Meaningful, Not Mandatory. Ample research shows that forcing employees to attend diversity training can activate bias rather than stamp it out. People often rebel against rules to assert their autonomy. Make attendance in diversity training voluntary. To get managers on board with diversity, equity, and inclusion practices, engage managers in solving their diversity problems. Ask managers to participate in recruitment programs. Promote business practices that provide connections across diverse groups. Working side-by-side breaks down stereotypes, which leads to more equitable hiring and promotion.

Interested in additional mining perspectives? You might also like: 

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Cummins Inc.

Cummins is a global power leader that designs, manufactures, sells and services diesel and alternative fuel engines from 2.8 to 95 liters, diesel and alternative-fueled electrical generator sets from 2.5 to 3,500 kW, as well as related components and technology. Cummins serves its customers through its network of 600 company-owned and independent distributor facilities and more than 7,200 dealer locations in over 190 countries and territories.

Drilling pads with lower OPEX, reduced carbon footprint and higher safety

Drilling pads with lower OPEX, reduced carbon footprint, and higher safety

Pad drilling has been around for over a decade across various drilling sites, and has already revolutionized drilling operations and the oil and gas industry overall. Its initial benefits around avoidance of cost associated with moving the drilling equipment was later coupled with increased hydrocarbon production, thanks to the ability to drill in batches. Today, pad drilling is the norm across many drilling sites. 

Given how pad drilling has favorably impacted the operational expenses (OPEX) of drilling contractors and the oil and gas industry, you might be asking yourself: how can drillers further reduce OPEX, but also improve safety and sustainability? 

The answer to this question comes from the application of proven technologies from other sectors in the oil and gas industry; let’s start with microgrids.

Microgrid powered drilling sites have reduced carbon footprint

Microgrids have already been in operation across many facilities ranging from healthcare campuses to mining sites. In a nutshell, a microgrid is a local energy system capable of producing (potentially storing), and distributing energy to the facilities and equipment within the network. You can find out how microgrids work and their benefits in our previous article

At a drilling site, microgrids can help operators integrate renewable energy sources such as solar panels and windmills into their power generation mix. In this scenario, intelligent control systems track the demand of the drilling site, monitor the production of power through different assets, and make smart choices on which power producing assets to use when. 

Microgrids could provide the energy needed at a drilling site through distributed energy resources (DERs)

The immediate benefit of microgrids at a drilling site is sustainability, reducing the use of fossil fuels. The secondary advantage of microgrids at a drilling site is economics; since the use of renewables while they are available could reduce the OPEX for the drilling contractors. 

Connected drill pads will deliver improved safety and financial benefits

Connectivity is already being deployed by many industries to address opportunities ranging from reliability to customer and product support. Our previous article details  how connectivity and digitization solve different problems depending upon your power systems’ utilization profile

For drilling pads, connectivity offers two-folded benefits. First is critical for every drilling contractor: safety. Thanks to the new digital products embedded in equipment including engines and power systems, the need for an actual driller to be on the rig during drilling is being minimized. Instead, the drillers can manage the majority of the operation from an office. Second benefit is around financials; with low risk comes the low cost associated with managing that risk, in the form of lower OPEX.

These connectivity solutions vary in their capabilities. The entry level systems offer remote monitoring and diagnostics; for example, your power system’s oil pressure is low and here are possible causes. The more advanced systems offer condition-based-maintenance (CBM) and prognostics. These systems can notify operators before an issue rises, and can even recommend ways to mitigate the forecasted issue.

Drilling sites to be powered by a diverse set of fuels instead of being diesel-heavy 

Today, diesel is the primary fuel used to power drilling operations, from the rigs to the nearby facilities and vehicles. Meanwhile, two technologies are increasingly becoming prominent to create drilling sites powered by a diverse set of fuels: dual fuel and hydrogen. The underlying benefit within dual fuel is the use of gaseous fuels in addition to diesel; which results in reduced OPEX and environmental impact. Use of hydrogen takes sustainability to the next level as the emission of any greenhouse gases is reduced drastically. 

We will cover these two technologies and e-fracking in more detail within upcoming articles.

The oil and gas industry is well positioned to take advantage of technologies that have succeeded within other sectors in recent years. The tested and proofed nature of these technologies minimize the risk for the industry. Meanwhile, their benefits ranging from reduced OPEX and improved safety to reduced carbon footprint deliver tangible outcomes for the industry.

To learn more about oil and gas power solutions Cummins offers, visit our webpage.

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Dispelling Myths: SCR and DEF simplicity in the Oil & Gas market

SCR and DEF complexity in the Oil & Gas market

Selective Catalytic Reduction (SCR) systems are not a new concept in every industry. The emissions regulation option first appeared in the on-highway space in 2012 and is slowly creeping into the industrial spaces. In the Oil & Gas industry, Cummins has made the switch to supporting EPA Tier 4 emissions standards by implementing SCR systems. 

But making this advancement in such a mature industry can be a big change for both manufacturers and for customers. When the products have looked, operated, and felt the same way for decades, a change like this one can seem to disrupt daily functions. However, Cummins is here to dispel any myths or misunderstandings about SCR systems that could make customers weary about this newer technology. 

First, why are SCR systems that require Diesel Exhaust Fluid necessary?

Without getting too technical, EPA Tier 4 emissions standards for Oil & Gas applications that provide 700hp or less require a chemical reaction that only SCR systems can support. SCR systems operate as an aftertreatment system that reduces the emissions produced from the engine. This is done through a chemical reaction completed within the tank that requires diesel exhaust fluid (DEF). Essentially, the exhaust enters the SCR system and, when combined with DEF, removes the carbon monoxide from the fumes and emits a fraction of the emissions that would occur without the aftertreatment system. 

Okay, what kind of system is the SCR replacing?

The alternative to an SCR system is an Exhaust Gas Recirculation (EGR) system. EGR options also act as an aftertreatment system to strip the exhaust of carbon monoxide and therefore reducing emissions. However, the EGR process cannot clean the fumes produced by an engine enough to meet EPA Tier 4 standards at rating below 700hp. At the moment, EPA Tier 4 requirements are only in place for products 700hp or less so EGR systems are still a viable market option above this horsepower range. 

What is DEF and why is it required for SCR and not EGR?

DEF is a solution used with SCR systems in order to spark the chemical reaction that strips exhaust fumes of higher levels of carbon monoxide. This solution is what allows businesses to meet the more stringent emissions requirements that EGR systems cannot currently accommodate. 

Does requiring DEF for my SCR system create more complexity in my application and is it more expensive?

No, SCR systems that use DEF are not more complex, require little to no extra effort and will not cost you more money in the long run.

DEF tanks come in various sizes to accommodate your operation. Whether that is a shift change after 12 hours, or between frac stages to be refilled if necessary, so as not to interrupt the any sequences of your operation. This event becomes seamless once it is introduced and your employees become fully trained.

Diesel Exhaust Fluid

SCR systems are not only better for the environment, but in the long run they are a more cost-efficient investment. The engines run cooler, achieve better fuel consumption rates and don’t require midlife overhaul injection changes. Even if you consider the price of DEF per gallon, Cummins SCR system is more economical than most competitor products on the market. 

Are there downsides to using DEF in SCR systems?

The largest drawback to using DEF is that the solution can freeze, which doesn’t exactly make it optimal for cold weather conditions. However, the DEF that is actually in the units during operation has a thermal system to ensure the solution maintains its liquid state. Additionally, for the DEF storage that will be on-site, related industries are creating pieces that can be placed at the location to keep DEF thawed. 

In the event that the DEF supporting the SCR system does freeze, the system will continue to operate as normal and EPA Tier 4 emissions requirements allow a 45-minute grace period for the DEF to be thawed. 

SCR products are going to continue to be a valuable force for change in industries where emissions are of utmost importance. Cummins application solutions in the Oil & Gas market are stepping up to meet the challenge for cost-efficient options that are better for the environment. Ensuring customers are comfortable and familiar with the products and processes that go along with meeting that challenge is part of the commitment. Count on Cummins to be at the forefront of technological advancements in the Oil & Gas industry and ensure your applications and products are always on. 

Katie Yoder - Cummins Inc.

Katie Yoder

Katie Yoder is a Marketing Communications Specialist. She joined Cummins in 2018 as a member of the trade show operations team, but now supports the Marine and Oil & Gas segments’ marketing initiatives. As a University of Wisconsin alumna, Katie spends her free time watching Badger sports.

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