Viewpoint

Autonomous machines in the fast lane?

The path forward to autonomy in agriculture, construction and material handling

Imagine a field with a fleet of unmanned harvesters or a quarry in which driverless trucks transport rocks. Is this a science-
fiction scene? It actually is not: off-highway (OH) vehicles, primarily or exclusively used on private property, are autonomous
pioneers in many ways. All major OEMs develop autonomous machines, and globally, hundreds of vehicles already run
driverless in mines, warehouses and, surprisingly, golf courses. A broad ADL study, in which we interviewed 30+ industry
and technology experts along the value chain (OEMs, suppliers, distributors and end customers) in Europe, North America
and Asia, highlights the biggest challenges, barriers and implications for vehicle design and the industry’s business models.
Machine automation versus autonomy Machine autonomy is a hot topic in off-highway industries:
more than 90 percent of study participants said autonomous
Vehicle autonomy has become a rather diffused and expansive
technology was highly relevant for them, 50 percent had
term, not only for passenger vehicles. In our context, it relates
already invested in R&D, demonstrators or first projects, and
to driverless operation of mobile machinery in the off-highway
30 percent were already offering (semi-)autonomous products.
industry. For analysis, we chose the off-highway sectors
R&D is driven mainly from two sides: big OEM and small
agriculture (AG), construction (CON, including mining), lawn and
robotics specialists. Small and mid-sized OEMs mainly monitor
turf care (LTC) and material handling (MH) due to their market
development of technology and the market today, and prefer
potential and pioneer characters.
selective technology alliances over proprietary R&D. Users of
When is a machine “driverless” or “autonomous”? Partial off-highway vehicles face constant pressure to become more
automation of tractors and harvesters (e.g., auto-steering) efficient.
has been state of the art for years now. But automation and
In the past, bigger and more specialized machines were the
autonomy are not the same thing. The automation of driving and
main answer to increasing productivity requirements – a trend
working functions on an off-highway vehicle is just the enabler
that has reached its peak, according to many experts. Machines
of real machine autonomy. We differentiate between four levels
cannot grow further without costly lightweighting and loss of
of automation and autonomy. The term “autonomous machine”
road usability, and higher specialization only leads to marginal
only applies to level 3 and level 4 vehicles which don’t require
effects. To reach the next productivity level, new concepts and
local operators at all, or at least for major parts of their regular
technologies are crucial.
work. Both levels require basically the same hardware.
Autonomy is one answer: it addresses requirements such as
The most important components are 3D-perception sensors
24/7 operation, higher productivity, reliability and predictability.
(LiDAR, radar, stereo camera), GNSS (global navigation satellite
High-utilization use cases in high-labor-cost countries are the
system) and specific sensors to monitor the custom work
perfect application for autonomous machines (e.g., forklifts
functions. Sensor integration and software make the difference
in huge warehouses or golf course mowing), as they help to
and drive the complexity for level 4 autonomy.
reduce labor costs and the number of accidents.
Arthur D. Little off-highway vehicle autonomy classification
Operator assistance Autonomous machines
Level 1 – No automation Level 2 – operator assistance Level 3 – Semi-autonomy Level 4 – Full autonomy
Automatic
Start

 Operator assistance End “Seed“

 Automation and guidance for single work  Automation of complete work processes  Automation of total system
 No automation of work function functions  Combination of multiple work functions  Combination of multiple work processes
 100% manual operation in all situations  E.g., auto-steering of tractor to keep crop  E.g., sprayer performs field work alone or  E.g., autonomous tractor performs field
 No assistance line Y-cycle loading on a construction site work starting from home

Level of human interaction Level of assistance/autonomy

Source: Arthur D. Little
 Viewpoint

Operator safety and health are major drivers for autonomous counterparts. Increasing safety and reliability are particularly
machines in mining and quarries. Operators are kept out of relevant in selected industries, to protect both workers (mining)
heat, humidity, dust and dangerous environments. Sending and products and goods (e.g., agriculture, material handling).
fully autonomous machines is the next logical step after remote Some users even need to address severe labor shortages in
operation, and also the objective of mining companies today. their industries and try to increase flexibility with autonomous
machines.
“Technology is ready, but the high costs still outweigh the Major end-user requirements mentioned by industry experts
benefits at the moment!” – Mining user Lower TCO 85%
Higher efficiency 67%
In LTC and MH, fully autonomous machines (levels 3 and 4) Higher safety 41%
are available today for special applications, but the majority are Higher reliability 33%
Labor shortage 19%
scarcely equipped with assistance systems. Agriculture and
Higher flexibility 11%
construction stand out: they apply machines with advanced Source: Arthur D. Little
operator assistance systems (level 2), but a very limited number
In many industries using off-highway machines, the expected
of vehicles reach level 3 autonomy.
amortization time is around two years, while the machinery is
Why don’t we see more autonomous machines at work today? typically used for three to five years. Autonomous machines
According to industry experts, the business case has to turn fulfill these requirements in only a few applications today.
positive. Autonomous machines are still too expensive in TCO
for the majority of use cases. Luckily, the off-highway sector Autonomous “pioneer” applications of today and the near
can benefit from R&D investments and technical progress future have similar characteristics:
in the automotive industry. Once costs of high-performance nn High utilization duty cycle.
components and systems decrease in a more mature nn Operation in a closed-off work environment.
market, other hurdles will be taken more easily. Reliability and
nn Single and simple work function.
productivity potential of autonomous solutions can only be
fully exploited with affordable yet capable sensors and, most
nn No on-road use and no road-traffic homologation.
importantly, software and a high-performance back end. Only Typical examples of use cases that fulfill these requirements
reliable and economic solutions will convince users. are autonomous mowers at golf courses (e.g., the Turflynx
Maturity of autonomous technology per industry segment F315), autonomous lift trucks in warehouses (e.g., Linde Matic
Robotic mowers
Level 4 trucks by Balyo) and autonomous haulage systems in mines and
Mining trucks quarries (e.g., solutions from Caterpillar, Komatsu, ASI).
Level 3

Level 2
“If the warehouse has an intelligent design, break-even is
possible in less than one year!” – MH OEM
Level 1

Industry AG CON LTC MH For an autonomous forklift, for example, a positive ROI can
sector be reached in less than a year due to 24/7 operation, although
Autonomy level range market standard Autonomy level range niche applications
the additional technology costs for the autonomous system
Market standard, autonomy level of majority of new machines
Source: Arthur D. Little are four times the vehicle base price. But those cases are still
The current lack of legal norms and standards for autonomous hard to find. Most study respondents ask for an additional
machines seems to be only a minor concern. The industry takes cost reduction of approximately 50 percent from today’s
a pragmatic approach: no legislation or regulation stops the level. To meet this goal by 2025, an annual cost reduction of
operation of autonomous machines on private and closed areas, approximately 10 percent for the base technology components
and technical standards fill the regulatory void in many cases. is required. Price developments in the automotive industry
Nevertheless, the regulatory void has a negative impact on the (e.g., for radar, solid-state-flash LiDAR) indicate that an annual
market uptake, especially in AG, with many use cases in semi- improvement by 10 percent or more is very likely, supported by
closed areas (e.g., children playing in cornfields). Special laws increasing demand and new players entering.
and regulations are expected only once we see a significant Depending on specific applications and their requirements,
number of autonomous machines in operation. the market for autonomous machines will develop quite
“The main customer requirement is always reduced costs – differently across industry segments. The broad market
uptake of autonomous machines is expected around 2025,
safety alone won’t sell these machines” – AG/CON OEM
when technology costs and customer acceptance will reach
Autonomous machines are tools to earn money, and users reasonable levels. Until then, pioneer applications with
from all industry segments want lower total cost of operation significant volumes will be found only in material handling and
(TCO) and ownership compared to manually operated lawn and turf care.
2 Autonomous machines in the fast lane?
 Viewpoint

Expected market uptake of autonomous machines precisely timed crop treatments and harvesting. High
Only niche appl. until Only niche appl. until
Level 4 2030 (e.g., robotic 2030 (e.g.,
Market uptake Market uptake levels of machine automation are required, e.g., in seeding,
expected 2020+ expected 2020+
inserts) autonomous mining)
Market uptake Market uptake
spraying and harvesting.
Level 3 Market ready today Market ready today
expected 2025+ expected 2030+
nn Multi-machine operation: An operator may be required
Level 2 No use case
Market standard Market standard Market standard
for failure handling, but multi-machine operation will be the
today today today
Level 1
Market standard dominant future approach. Platooning concepts are already
today

Industry AG CON LTC MH available today. Industry experts expect a significant share of
sector level 3 vehicles by 2025.
Market standard Pioneer applications Market uptake Low relevance

Source: Arthur D. Little CON is very challenging for high autonomy; only
Material handling as a front-runner, with autonomous niche applications are expected
machines already in operation today In construction, autonomous machines will play a minor role in
Material handling will be the major application of autonomous the near future. Except for certain niche applications, such as
machines until 2030. Autonomous lift trucks in warehouses haulage trucks, the vast majority of vehicles will stay at level 2 in
are not only market ready, but already in operation today. the next 10–15 years. CON offers the most difficult environment
These trucks no longer require fixed infrastructure, as older for autonomous technology: complex and dynamic construction
AGVs (automated guided vehicles) have, but instead rely on an sites and machines that are used for limited amounts of time
environmental recognition system updated in real time. The MH at changing locations. Many processes on construction sites
sector is currently the only sector with an existing regulatory require exact interplay between several machines, and therefore
framework for autonomous industrial trucks, since 1997. But the autonomy would be required for all machines in the network.
high functional safety requirements (Automotive Safety Integrity Additionally, many machines are multi-purpose, and smaller
Level (ASIL) D) are also a barrier to applying the autonomous lift auxiliary machines, in particular, often have very low utilization.
trucks in areas with human traffic or outdoor environments. End Big OEMs will mainly focus on operator assistance. Expected
users expect “more than 99.9 percent reliability and 0 percent niche applications of level 3+ autonomy are roller compactors
failure”, and currently the technology can’t provide this. for road building, high-power loaders with high utilization, and
autonomous haulage systems in mines and quarries.
Little relevance for operator assistance in lawn and
turf, end users demand level 4 autonomy
“Our equipment will stay big until 2030 because all of it is
optimized for big machines” – AG industry expert
Lawn and turf care (LTC) is a very specific segment of the
Although the first machines will have autonomy as an additional
off-highway industry. Due to the relatively low vehicle size and
feature, with autonomy levels 3 and 4, machines will no longer
price, the human is by far the biggest share of operating costs
need operator cabins and a completely new vehicle design
(approximately 70 percent), at least in high-labor-cost countries.
will become possible: current vehicles are built around the
Operator assistance functions such as lane-keeping assistance
driver’s cabin, including the seat and controls. Additionally,
do not render enough benefits to justify the additional costs. The
many mechanical components can be replaced by electrical
solution is to either replace the operator with Level 4 automation
components (e.g., for steering), and sophisticated comfort and
or have no automation at all.
safety features (e.g., suspension) will become obsolete. This
Agriculture: High-efficiency farming is targeting level could decrease the vehicles’ bill of materials significantly and
3 autonomy balance the additional items for autonomous technology.

Market uptake in agriculture will follow around 2025, with But until 2030, insignificant changes in vehicle design across off-
a significant number of applications mainly targeting level 3 highway industries should be expected. Vehicle size is directly
autonomy due to special industry requirements and more linked to power requirements, especially in CON and MH.
complex work environments and functions. Due to its significant In AG today the value chain is optimized for large machines, and
market size, AG is nevertheless expected to become the biggest reverse development will take some time. LTC will probably
segment for autonomous machines after 2030. Increasing see the biggest change in vehicle design. Robotic household
productivity per acre remains the major objective. Three trends mowers give a good indication on a small scale of how the
currently shape the industry: look of a conventional ride-on mower will change. The most
nn Digital farming: Data-driven farm management systems important change in vehicle concepts across all industries will
steer operations. Autonomous machines collect the required not be the removal of the cabin, but increasing electrification
data and operate on predefined programs. of the machines. Electrification makes automation a lot easier
nn Precision farming: Systems minimize the input of seeds, and more cost-efficient, with benefits in precision, steering and
herbicides and fertilizers, and maximize the output by simulation. Together with stricter emissions regulations, this

Autonomous machines in the fast lane? 3

 Viewpoint

leads to an expectation that small machinery will be completely Contacts

electric by 2030 and bigger machinery will at least become Austria Middle East
hybrid. [Link]@[Link] [Link]@[Link]
Belgium The Netherlands
Outlook: Autonomous technology opens the door for [Link]@[Link] [Link]@[Link]
new players and business models in the off-highway China Norway
industry [Link]@[Link] [Link]@[Link]

Small and medium-sized OEMs, in particular, are currently Czech Republic Russian Federation
[Link]@[Link] [Link]@[Link]
struggling with developing their own autonomous technology
due to the enormous resource requirements. Third-party France Singapore
[Link]@[Link] [Link]@[Link]
technology providers fill the gap that hesitant OEMs create, and
either target the end user directly with retrofit solutions or offer Germany Spain
[Link]@[Link] [Link]@[Link]
white-label solutions through OEM or distributor partnerships.
Their co-development approach is more flexible and often India Sweden
[Link]@[Link] [Link]@[Link]
cheaper than a solution delivered end-to-end by a single OEM.
Specialized suppliers and technology start-ups are natural M&A Italy Switzerland
[Link]@[Link] [Link]@[Link]
targets for OEMs to grow and build up relevant capabilities.
Japan Turkey
Autonomous machines not only require new technology [Link]@[Link] [Link]@[Link]
competencies, but also new sales channels and formats: new
Korea UK
business models will arise. The trend toward precision farming is [Link]@[Link] [Link]@[Link]
a good example: it is a plausible hypothesis that farm equipment
Latin America USA
OEMs will extend their businesses, becoming solution providers [Link]@[Link] [Link]@[Link]
as autonomous machines combine the previously separate
areas of vehicles and operation. This will allow OEMs to shift
parts of the value creation from farmers to themselves. In this
Authors
business model, software and data ownership remains with Alexander Krug, Dr. Philipp Seidel, Thomas Knoblinger
the OEM. The service is offered as a free platform, but keeps
the farmer in the OEM “ecosystem”. John Deere is the clear
frontrunner OEM in this development, facing competition from
AG-chem giants (Monsanto & Co), which are also expanding Arthur D. Little
their digital farming ecosystems.
Arthur D. Little has been at the forefront of innovation since
1886. We are an acknowledged thought leader in linking
Conclusion
strategy, innovation and transformation in technology-intensive
Autonomous machines will change to the fast lane, and in 2025 and converging industries. We navigate our clients through
we can expect significant demand from agriculture, material changing business ecosystems to uncover new growth
handling, and lawn and turf care for selected applications. opportunities. We enable our clients to build innovation
Industry players such as vehicle OEMs, suppliers and fleet capabilities and transform their organizations.
operators need to act now.
Our consultants have strong practical industry experience
Technologically, electrification, connectivity and digitalization combined with excellent knowledge of key trends and
support the development of autonomous machines, and vice dynamics. ADL is present in the most important business
versa. These synergies help players that already have developed centers around the world. We are proud to serve most of the
competencies in robotics, automation and actuation, sensors, Fortune 1000 companies, in addition to other leading firms and
high-precision navigation, and the like. public sector organizations.
Incumbents and new entrants have to decide today what part of
For further information please visit [Link] or
the new ecosystem they want to occupy, and how. Regardless
[Link].
of whether they make, buy or partner, investments and
transformation seem inevitable for them to stay in the game and
Copyright © Arthur D. Little Luxembourg S.A. 2019.
avoid missing a great opportunity to reshape the off-highway
All rights reserved.
vehicle industry.

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