Wirtgen CEO: “The digitalisation of road construction will come in steps”
08 August 2023
Dr Volker Knickel, CEO of the Wirtgen Group tells Andy Brown about electric equipment, global sales, worker shortages and the sector’s path to digitalisation.
During the video interview with Dr Volker Knickel, CEO, Wirtgen Group, several words spring to mind: calm, knowledgeable, and strategic. Knickel – who joined the Wirtgen Group as chief operating officer in 2020, becoming CEO in September 2021 – is easy company and gives meaningful answers to questions while, at the same time, choosing his words carefully. He is obviously a man with a plan – take, for example, the approach to digitalisation.
“The digitalisation of road construction will come in steps. This is not something that can happen overnight, and it is something for which we have a roadmap,” he says. Wirtgen Group feels like it remains a German company, despite being acquired by John Deere in 2017. Those at the company give the impression of a relationship where there is limited interference from Deere but some considerable upsides.
“Our relationship with John Deere really helps in terms of sharing knowledge and expertise. Deere acquired majority ownership in battery manufacturer Kreisel Electric in 2021 and the knowledge they have shared with us has been very useful. It is hard to quantify exactly how much they have helped but it has saved us time because someone has already got experience, learned from any mistakes, and developed the technology.”
Wirtgen and its brands have electric powered equipment, but they are asking the same question as the rest of the industry: how economical and practicable is this power source for larger equipment? This is something that Knickel says they are actively working on.
“At the moment it is only feasible for some machines to be battery powered, those of a certain size, as the voltage limits the power level of the machines and it only can go so high before it gets difficult technically and economically. We are working on new battery powered solutions with higher voltages, so we can have larger machines that are electric.”
But Knickel makes the point that in road construction the majority of CO2 produced is from the materials not the machines, so battery power will just be one part of the solution. Something that can have a bigger impact is the ability of technology to reduce the amount of rework required, and the amount of material used. As he neatly sums up, “Using technology brings outcome predictability such as greater precision, higher quality results and less material usage.”
Many brands under one roof
The Wirtgen Group encompasses several different companies. There’s Vögele, which specialises in road pavers; compactor and roller manufacturer Hamm; crushing and screening OEM Kleemann; Benninghoven and Ciber, which produces asphalt mixing plants, and, of course, Wirtgen, which sells cold milling machines, slipform pavers and more.
Knickel’s face lights up when asked how it’s been managing these different brands. “It’s been great; I’ve had a blast. Wirtgen is a company that has a real power of execution and everything that is done is researched first in the field, so we know that it works. I’ve really enjoyed working with the customers; the customer relationship is so good.”
During our conversation he is keen to stress the strength of the relationship that the company has established with its customers. This undoubtedly helped to mitigate the challenges that the last few years have brought such as Covid, rising inflation and supply chain shortages. Knickel also makes a point of praising the Wirtgen employees and comments that, “As a whole, construction has proved to be resilient, possibly more resilient than we realised a few years ago.”
This resilience is illustrated by equipment sales with the CEO revealing that he expects sales in 2023 to be at a level similar to 2022, which was a strong year for the company. When it comes to individual markets, he says that, “North America is is one of our strongest markets. The Indian market has come out strong this year as well. China was slow for us last year and we thought it might pick up, but it is still slow. China is one of our bigger markets, along with Europe and North America.
“In Europe some customers seem to be holding back their purchasing decisions for now as they wait to see what happens. Our total sales level is generally the same, so the regions that have fallen have been compensated in other areas. Latin America – Brazil in particular – has seen good growth.”
Regarding some of the issues surrounding construction, Knickel says, “the supply chain situation is still a challenge but this is easing somewhat and is better than it was last year; the problems aren’t of the same magnitude.” Another obstacle is the worker shortage, something that technology can help with.
“Automation can help to assist ‘superhuman’ performance, it can increase the performance of the operator,” says the CEO. “The industry has a lack of operators – automation is not there to replace operators, but to make a less skilled operator perform the job like an expert.” He goes on to make the point that the company “do not want to automate something for the sake of it, it needs to have a purpose.”
Automation and intelligence in construction
Knickel says there are two main threads to the company’s approach to technology: automation to autonomy and information to intelligence. The first is the principle that autonomy will come in steps and the second that it is vital that data provides useful information to customers. There is more data available than ever before; the key is ensuring it is the right data.
“We have increasing amounts of real-time data that we can provide that helps our customers. Everything that we develop we develop in partnership with them. It’s vital to provide customers with the data that they need to enable them to be more efficient. We want to help our customers to make better decisions, and the way to do this is to provide them with more information.
“The different Wirtgen Group brands all have their own technology solutions, and they can talk to each other. In a more general sense, in the future, all equipment from different manufacturers will have to be able to communicate and talk to each other as customers have mixed fleets.”
The CEO says that a change is happening with customers being more open to technology and digitalisation, but it does require a mind-shift to plan digitally, as it needs more planning upfront and thus more initial investment.
The biggest trends in the industry – sustainability, digitalisation and electrification are all linked. Technology can make the road construction sector more efficient, thereby using fewer materials, the main contributor to emissions. Battery-powered equipment will help to bring down emissions as well as providing other benefits, such as no noise and vibrations for the operator.
Knickel is clearly excited by these technologies while keeping firmly focused on the core need of customers. “The big thing for our customers is uptime. We want to produce equipment that increases performance, saves fuel, and reduces downtime.” Looking to the future, the key is going to be balancing these with increasing amounts of new technology. Knickel pauses for a minute, smiles, and says, “The ultimate objective is to support our customers to do more with less – smart, safe and sustainable. We want to pull the customers along with us on the journey that construction is going on.”