Supply Chain Matters continues to highlight exponential developments in advanced technologies that will eventually impact various industry supply chains with an update on increased investments in autonomous driving technologies for trucks.

In November of 2016, Supply Chain Matters observed why increasingly high-tech and semiconductor technology providers wanted to position themselves in automotive value-chains. There have been quite several significant merger, acquisition and strategic product development announcements involving automotive supply chains and the stakes involve which company will ultimately control and benefit from the movement of more advanced technology being embedded into value-chains of automobiles and transportation. As we noted last year, a lot of M&A and investment monies are being plowed into the automotive and transportation sector to take advantage of the various movements towards on-demand, autonomous and highly intelligent motor vehicles. This movement presents a competitive dynamic among traditional OEM’s who control brands and markets with those of technology companies that know about software and digital transformation.

It is now becoming ever more obvious that value-chains of short and long-haul trucks are another, perhaps more promising area of long-term strategic interest. The reasons are likely obvious to our readership audience. The increased savings in efficiencies, driver productivity, and overall safety make a case for more near-term investment. There is also the other elephant in the room, namely the continual shortage or turnover of qualified long-distance truck drivers. In September of last year, consulting firm McKinsey indicated in a research report- Delivering Change, the transition of commercial transport by 2025, that by this timeframe, at least one in three new heavy duty trucks will contain higher levels of onboard automation technology, including Level 4 autonomous technologies, that will buffer the need for full-time driving.

Another open question is obviously the receptivity of regulators to various forms of autonomous driving technologies applied to trucking and transport. There are some perceptions that European regulators have been more open to considerations of advanced technology, and have become directly involved in ongoing industry demonstrations of various forms of autonomous driving technology. US federal regulators, on the other hand, seem to be taking a more wait and see perspective. In either case, the receptivity by safety regulators will obviously be an important determinant in timing.

Latest Announcements

Semiconductor technology provider Nvidia whom originally developed of the Graphical Processing Unit (GPU) chip in 1999, and that ultimately sparked the growth of the PC gaming market. The company has moved on to redefine modern computer graphics and gaming platforms and has made advancements in parallel computing. More recently, GPU deep learning ignited modern artificial intelligence married with digital visualization— which Nvidia describes the next era of computing, has led to the development of autonomous vehicle technologies.

Thus far, Nvidia has been collaborating with what the company describes as a wide range of automotive partners, including Tesla, Mercedes Benz, Audi, and others. A recent presentation at an investor conference indicates 80+ companies are currently leveraging the company’s self-driving platform and that every Tesla Motors vehicle now comes equipped with DRIVE PX 2 for full self-driving capabilities

In a company blog posting in March, Nvidia announced that it’s working with PACCAR, maker of Kenworth, Peterbilt and DAF truck brands, on developing technology for autonomous vehicles. The same blog posting further announced a partnership with Tier One automotive parts and systems component producer Bosch, for self-driving car technology.

PACCAR has developed a proof-of-concept self-driving truck with SAE Level 4 (full self-driving) capability built on the DRIVE PX 2 technology. It includes elements of adaptive cruise control, the identification of digital objects along with lane-keeping technology to make trucks safer in long-distance hauling.

Convoy Approach

Wall Street is increasingly paying closer attention to autonomous driving technology applied to trucks and truck fleets. Earlier this month, Silicon Valley based software firm Peloton Technology raised $60 million in a second-round of funding for expanding its development and market presence in automating commercial truck fleets.

As its name implies in the field of competitive cycling, Peloton Technology supports the ability of trucks to travel in a convoy with a driver in the lead vehicle controlling various following truck (s). While the value proposition is predicated on higher safety and fuel savings, some in the industry are a bit skeptical on the notions and regulatory approval of an automated convoy of multiple trucks controlled by software. Instead, the software provider is initially focusing on supporting a convoy of two trucks, with the lead driver in full control of both vehicles. Peloton is planning development and deployment of its software for 2018.

Current investors in Peloton include Intel Corporation, Omnitracs LLC, Magna International, United Parcel Service and Volvo AB, all various value-chain players in trucking, transportation, autonomous driving and truck component technology.

Future Technology Leaders

If our readers have been scanning various other business and technology media, you have likely read that the trucking industry has struggled of-late because of the compelling need of fleet owners to want to invest in new, more fuel efficient and technology-laden trucks. The likely solution rests both in hybrid powered technologies and in increased levels of safety, driver productivity and automation.

Thus, over the coming months, a number of both established players and high-tech startups will all be vying to be the future technology innovators and leaders. Startups will bring the usual speed, agility, and advanced technology knowledge – all prerequisites for the majority of new business models. To counter new entrants, OEMs must demonstrate agility to both build their own digital capabilities and enter collaborative efforts with partners around the product value chain.

Established names such as Daimler, PACCAR, Scania, and Volvo will be contrasted with those of Otto (recently acquired by Uber), Nicola Motor Company, others and yes, even Tesla Motors.

Exponential technology developments will eventually impact many industry supply chains, the product value-chains they support, and the tools and technologies utilized to move physical goods. As in all things exponential, the question is timing, and the cycles of that timing are accelerating.

Bob Ferrari

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