Digital Transformation in the Tire Industry at Goodyear (CXOTalk #650)
Goodyear is an iconic American brand associated with tires. Chris Helsel is the chief technology officer of the Goodyear Tire and Rubber Corporation. Chris, tell us about Goodyear and tell us about your role, please. We're more than a 120-year-old company. In some ways, we were a startup at that time, as you might imagine. We were there at the inception, really, of the mobility that we experience today, which is personal car ownership, internal combustion engines, and making tires for that new mobility.
Here we are today at that new inflection point of the next mobility. A lot of people know us from the blimp. You know we cover a lot of sporting events.
The other thing that you probably know us very much for is we make tires that go from something as small as your consumer tire today to something as big as a 63-inch rim diameter that would go on some of those huge mining trucks that you might see around the world. Aircraft type tires, which go at extremely high speeds, and even racing tires in the form of NASCAR, that's how a lot of people would know us and know our brand. Tell us, what is the role of a CTO at a company that makes tires? I know there's much more here than meets the eye, and that's what we want to kind of get into. My role at Goodyear at chief technology officer really encompasses, we would say, tires and beyond tires.
I'll elaborate a little bit more on that as we go. Think of it this way. I'm responsible for all the product development and technology that go into those tires. Then as importantly, as I mentioned this whole new mobility, what are the new ways to enhance tire performance, bring tires to market differently, or help people get more out of those tires? In the area of tires, we would be developing things like all kinds of new materials. People might know just one technology fact around tires. They're composed of over 60 different materials that are brought together in a composite that needs to do many, many things.
Obviously, rolling at very high speeds, maintaining grip with roads under all kinds of conditions, whether that be the summer conditions, dry conditions, rain, snow and, at the same time, they deflect tremendously underneath that. The real beauty of the tire, if you think about it, is it has the ability to carry load with a material that's very, very cheap and that's air. That's what's made a tire such a great design for so long and even why we see such a future for it. It's really difficult to come up with a new architecture to replace that. Air is a really cost-effective way to carry load. The beyond tires area, of course, is our efforts in the new trends of Internet of Things, big data, and things like that.
In that way, as you might imagine, we're putting sensors in tires and starting to do new jobs with tires as well. Can you give us an overview of the kind of technologies that you work on or that the company works on to help make tires possible? Honestly, I sometimes think of tires as being kind of magic. You think about an airplane and the weight and it's coming down. I travel a lot and I look at planes landing. I think it's sort of miraculous that these tires don't explode. How does that work? I actually came to this industry over 24 years ago and, at that time, I had worked in aerospace, I had worked in petrochemical, and I had worked in the nuclear industry.
I thought, "Gees, those were challenging problems." Actually, tires have been the biggest challenge. I was brought in from the standpoint of doing computer modeling of tires.
There, it gets exactly into what you're saying. How do you represent these really high impact events and have a structure that can absorb those kinds of impacts while lasting a very long time? Some of the key things, in particular, you have to develop and deliver in tires today is fuel economy. Of course, a lot of people have got a big focus on things like global warming. These are huge challenges.
The more we could deliver fuel economy through the rolling resistance of the tire, which basically is every time a tire rolls, the materials actually will produce heat and that heat is energy loss, right? You want to minimize that energy loss. At the same time, the rest of some of the sustainability initiative is also just to make tires last longer. The longer a tire lasts, of course, that's less tires that need to be repurposed downstream usually into such things as fill materials for other products or actually are burned as energy. Sustainability is a big thing as we're trying to design tires. Then the last area I would talk about in sustainability is really in the new types of materials and source materials. Of course, natural rubber is a big component that goes into tires.
There's also synthetic rubber derived from oil. We've been doing quite a bit of work and have implemented in several of our new products things like soybean oil, which gives us not only better performance but, of course, gets us off of the dependence of some of those other sources. Then something called rice husk silica ash, which basically makes silica, which is one of the fillers that gives rubber its properties and stiffness in the tread. That's derived out of one of the waste products of actually making food, making food from rice.
A lot of your time is spent on the material science of the rubber and ensuring performance and sustainability and balancing, essentially, these—could we say—competing objectives. Yes. A lot of people talk about it in tires as a triangle. As you design, in particular, the tread, which is that major component that touches the road, that part that, if you're in a tire store, you're looking at and it has all the features in it that are cut from blades.
Those are those biting edges and things that give you things like traction. The tradeoff there is treadwear, that fuel economy rolling resistance, and then your traction properties. Of course, all three of those are very important.
Any tire that overbalances in one compromises too much in the others. Therefore, the way you handle that even today is through market segmentation where you actually would skew the properties in that tread in order to meet different parts of the market or what it is that their preference is and the value for them in buying a tire. I'll just tell you for the North America market, you would see that in terms of the three different tire lines we have. We have one called the WeatherReady. Just like the name, it's really a lot around that performance and all kinds of weather conditions.
The second one being the MaxLife. The MaxLife is very much around that extended treadwear to be on the vehicle the longest. If you're somebody who drives with a lot of abrasion and wear to your tires, that might be the best one for you. Then lastly is one called the ComfortDrive, which emphasizes the ride characteristics as well as the fuel economy being important across all of those. What does digital transformation mean for Goodyear? In the tires area, what the digital transformation means is, how do you bring new technologies like simulation and computer design tools into the design process for tires? We've been doing some work on this for over 25 years collaboratively with Sandia National Laboratories in Albuquerque, New Mexico.
It's really a neat relationship that we have with them in that their core mission is the readiness of the nuclear arsenal of the U.S. government. You think about that. That's a big challenge. You say, "So, why do they partner with a tire company?" It's exactly because we can validate those computer tools that they use day in and day out to do their job but we can do it on those thousands and thousands of products we develop every year. As I said, some of the things that tires go through, the huge amounts of deflection that you see, the impacts that we see, the traction, each one of those features in their computer codes get validated by us with all the test data that we'd also produced that gives them confidence as they use those tools to do their job on the nuclear readiness.
It's been an awesome, collaborative relationship over 25 years. I think it's the longest-running one. These are unique to U.S. companies who can have these relationships with our national labs. That's just one example of a digital transformation in our traditional core business.
The second one has been, really, how do we start doing the work on developing artificial intelligence type-based tools to help our people make better decisions. It's that human augmentation of our engineers. There, you see that in two areas.
You already talked about the importance of materials. Materials is really one of our most important core competencies, as you'd imagine. Here, we make all kinds of material experiments year in and year out. For decades now, we've got all this data.
We've taken and trained using some machine learning type algorithms and produced some really effective tools that can give insights to our designers and material developers without having to build and test tires. Again, it's a very productive thing but also, as you might imagine, it makes us much more efficient and effective. There's an example there in our core business. The other side, beyond tires, is really about how are we putting sensors into our tires to do basically three different missions.
Mission one would be, have real-time ID of our tires, where they are and, secondly, the condition of those tires. Are they properly inflated? Are they worn out? Then the third, and really the long-term goal for sensors and tires, is to turn the tire itself almost into a sensor and how that integrates with the vehicle and vehicle developers today. Can we say each tire is a kind of node on the network, from that standpoint? You could. You could start envisioning, right? Just think of this. We sell over 150 million tires a year.
Your average driver drives 10,000 miles a year. We have all those data points, at any given time, touching roads. Just think about that. You go to things like Google Maps and they drove around and they made their maps of all kinds of communities and cities, et cetera. Could we not produce maps of basically road surfaces? Now, what would you do with that information? What kind of problems can we help solve with respect to smart infrastructure and helping to make the driving experience all the better for people or all the more safe, and especially when we start talking about enabling your AVs or autonomous vehicles of the future? To build this kind of system, what are some of the components that need to be in place? You mentioned the need for each tire to have its own unique identifier. That in and of itself is not how we typically think of tires.
Most consumers think of tires as commodities. Obviously, in many domains, they are not commodities, but we go to the tire store and it's like, "Okay, what's the best tire for us to buy today?" This goes so far beyond that. This does because if you start just with the ID of a tire, different tires have different characteristics, as I described. You can have from one manufacturer and all these tires would fit your vehicle just fine and be appropriate for your vehicle.
You could have a tire that's skewed towards performance, one that's skewed towards winter performance. You could have one that's skewed towards treadwear. Each one of those has a different, I guess would say, friction relationship that it has with the road.
Okay? Now, just based on knowing that signature and presenting it to the automatic braking system or the ABS on a vehicle, you could improve vehicle performance. We've even found that tires, as they wear and you give up some of the stopping distance, let's say, is one really key parameter. You can recover up to 30% of that stopping distance simply by knowing what tire is on there and that ABS knowing to use certain characteristics because it knows the tire. That's just a really simple thing that can have a really big impact just from the identification. When you go, secondly, into the idea of, is the tire currently up to its mission, meaning, is it properly inflated, does it have the proper amount of treadwear on it? These are things that we're doing today through pilots where we have over three million miles running of a sensor actually in the tire. Yes, it knows the ID but, beyond that, it is monitoring that temperature, pressure, other vibration characteristics, combined with some of the vehicle data and, low and behold, we can also predict the state of treadwear and does it need to be replaced or not.
Now, just think. You mentioned going to the tire store. Instead of you going to the tire store and saying, "Yeah, what tire looks good?" what if we were able to present to you at that point in time, "Well, how do you, Michael, drive? You're a pretty aggressive driver, Michael. We would suggest this particular tire because it's going to be better for treadwear for you." Right? "You're not going to get the use out of this other tire.
You're really hard on your brakes. You don't do a lot of long driving, so this fuel economy tire." We can start almost having a much more informed recommendation for you and also a relationship to know when you'll be in the market and when to even try to engage with you. Of course, pass that all the way back into our supply chain of when we need to know, when do we even need to produce that tire because we know you're going to need a tire within about a month. Right? That whole area is really an exciting area for us to both do our job more effectively, give more to the customer, but also make us much more productive and efficient in what we have to do to get them the tires in the market. Arsalan Khan asks, "If Goodyear is tracking tires in real-time and with road information and locations, what about the privacy implications of that?" What we have in the market is for commercial trucks in the form of what we call proactive service.
There, of course, we have complete transparency with our fleet operators on the intelligence that we have in their product, their full access to that data, and how we protect that data. We have to protect consumers' data today every day, even just in our tire stores with respect to all of that information. We're extremely sensitive and know that that's very important. With respect to the second one where we're putting intelligence in tires, that is, in the consumer side, really in the pilot phase. Today, you do not have sensors in all your tires and we are tracking them, to be clear. This is in very select applications today where we're really going to push out our first-in-market for sale sensor in tire within about the next year.
Be assured today; we're not remotely doing it without you knowing it and we also understand those key questions that people have and they rightfully have. You're about a year away from actually putting products into the market that start to have these sensor characteristics for consumers. For a company of Goodyear's size and market influence, a year away is pretty close. Yes. Then what are the components that you needed to build in order to create this? You've got a very clear vision. You're executing towards that vision.
You have timelines, at least estimated timelines in place, so you know the pieces. What are the pieces? The key pieces are, as you might imagine, we first had to work on, with partners, sensors that would last in the tire environment for the life of the tire. If you think of tires even on vehicles, it's one of the components that requires maintenance as well as replacement during the life of the vehicle. There aren't a lot of those left.
Even as we move into electric vehicles, there'll even be less of those. There are less components, up to 75% less. One of the things we know we have to do is to make tires last longer, potentially even up to the full life of the vehicle. We see putting intelligence in as also something to do that. Now, that sensor then needs to last the life of the tire.
The longer we make tires last, the longer the sensors need to last, so the sensor is piece number one. The second one is to have some method in order to get the information off the sensor and get it to the cloud. There, of course, we have traditional telematics. Some of that can be integrated through the vehicle if we have collaboration with the OEM, which we've been pursuing some of those channels—not ready to go to market yet—or through a replacement, its own small telematics box. We then get it up to the cloud, so we have our own cloud infrastructure.
There is where, of course, we've got the algorithms that are running on the data that interpret that data and comes back and convert it into something actionable. Then lastly would be, how do we connect to the customer and send them information with respect to, "Hey, here's what's going on with your tires. Do your tires need to be replaced? If so, would you like us to schedule something? What would you like to do? Here are recommendations." It's basically those four pieces. For our fleet applications, that last piece would look a lot more like a big fleet dashboard and a whole set of interfaces for you as a fleet manager to be able to make decisions on your fleet.
I'd like to be clear; we are in market in commercial for commercial trucks. Not every single commercial truck tire, but in different applications of on-road trucks. The customers, obviously, are giving you very positive feedback about this, or you wouldn't be continuing the development. The fleet business is a business where the more information you have, the better your decisions. The better your decisions, the better you can improve your margin.
It is a difficult business and those who do it well, do it very intelligently with good decision-making. They love those tools. These tools really help them.
What role do smart tires have in being part of a connected platform? Can you talk about the platform aspect? Again, for the average person on the street, we don't think of tires as being sources of IoT data. We had announced this year at the Consumer Electronics Show in Las Vegas in January. It seems like forever ago with everything everybody is going through. We had announced what's called AndGo by Goodyear. AndGo is Goodyear's digital platform by which we can connect to these new, emerging fleets, consumer fleets, and completely have a digital relationship and transactions to both monitor their vehicles, have them request vehicle service, and completely coordinate that whole thing digitally.
Just like you would ask for an Uber ride, you could ask for a Goodyear service to come out and clean your car. You could ask for a Goodyear service to come out and check the tires. You could ask for a Goodyear service to coordinate service to maybe even get warrantee service done and we'll take care of having that happen for you.
We've been bringing on several partners in order to use that new capability. It is definitely in the ramp-up phase. We are not at prime time with millions of vehicles, but it is coming along. That's number one. We have a platform, so you might just think our API would plug into somebody else's platform and then our platform takes care of servicing for you.
That's one way. Now, of course, the digital tire or the intelligent tire only helps that because the intelligent tire can pass the information to that same platform of, "Gees, this tire is actually low on air," and so, therefore, we can proactively reach out even before the customer does and have to have a complaint saying, "Oh, my vehicle that I have out there for people to use, oh, the last person to use it says it has a flat tire." We could actually anticipate that flat tire and get it taken care of.
Of course, the more those vehicles are available for somebody on their digital platform, that's how they make their money. Vehicle availability is really key to their profitability. The technologies and the history of Goodyear have been associated with material science and designing tires that meet the various characteristics you were describing earlier: performance, balance, sustainability, and so forth. Now, you are de facto becoming a data company.
Is that not so? It's very much so. We've had to really think about, in this beyond tires area, what are the key capabilities we have to own and what are the ones that we have to partner, right? We've approached this in two ways. The first way was, we opened up what we call an innovation lab. Maybe just to give you some context, in Akron, Ohio, in Luxembourg, in Europe, those are our two biggest innovation centers where we have hundreds and hundreds of engineers. They're doing that traditional work.
In order to get at, though, this new mobility type of opportunities I described where we're connecting into service platforms for these new emerging fleets, a hotbed for that type of innovation is San Francisco. What we did was we opened up an office in San Francisco two years ago. Started with just two technology scouts.
That group has grown more than tenfold. They are out there doing the development on the AndGo platform live in market where they could be testing, partnering, rubbing shoulders with all the types of people we are collaborating with who bring solutions that we add to that platform. It's been, basically, an open innovation story with an emersion in the ecosystem where that type of technology is being developed by being able to, day in day out, rub shoulders and collaborate with those who are shaping this new mobility. That's the number way in which we've been doing this. Number two is, again, back to January.
We announced a new corporate venturing fund and that gives us the opportunity to invest in startups, to invest in people who are bringing some new ideas who might need a little help and support in doing that. Of course, what we bring to that is not just investment. They have lots of opportunities for investment, but it's really an opportunity to help them scale and validate in-market in a sizable way. What about the retooling, reskilling, rethinking from a cultural standpoint inside Goodyear because the design and development of physical objects, namely tires, is so different from the design and development of conceptual products such as the type of sensor data that you're collecting or planning to collect as well? Goodyear, as it turns out, our challenge in moving into this new mobility and a lot of people in traditional innovation, in theory, talk about these disruptions, right? You're going to disrupt or die. What's interesting for us is that the tire, and I go back to my comment, it's a heck of a good design from the standpoint that air carries load. That by definition makes it a really cost-effective solution for connecting vehicles to earth – or whatever planet you want to.
The bottom line is, that connection to the road, which is basically the size of the palm of your hand, four of those, at any given time, is carrying thousands of pounds of load both vertically or just pressing down, but also are you corner and maneuver on all kinds of roads. That job is not going away. Okay? Our core product is needed even in this huge mobility ecosystem inflection point that we're having. However, we're not sitting here saying it's sufficient in the way people have consumed it, they want to pay for it, other things we could do to make it even better through intelligence. For us, I think the challenge has been, how do we continue to respect the core but also understand that we have the opportunity to build these adjacencies around our core to make it even better.
That's a little different than some of the innovation challenges some people have. If you think of an internal combustion engine and many of those components, if you're a component manufacturer of those, your challenge is very different. That respect and how we think about the core still as being really, really important, and not like, "Hey, it's only the new stuff that's cool." We have good things, like I mentioned. People want to work on sustainable, new materials.
That's an exciting engineering problem. We have them on both sides of our house, so we're a little bit blessed, I would say in that, in terms of being able to motivate our folks. I think that was number one for us is really just to keep everybody understanding our core business is still a great core business. We just want to make it even better. I think, for us, that reckoning and now, as we bring people in and we bring people actually to cross those two domains, it's really important. The second thing I would say is understanding of the tire.
When we've built our algorithms for predicting treadwear and things, we have found if you don't also have some of the core tire properties as part of those algorithms, they're just not accurate enough. The two have to come together in order to really get at even the new opportunities, the traditional and the new. Underlying all of this change that's taking place is, it sounds like, a deep culture of innovation, historically innovation around the materials and improving the core product. Now, layered onto it, I suppose you've had to, as you said, acquire technologies and acquire skills.
Then there has to be some retooling of new skills layered on as well. The underlying culture of innovation, it sounds like, is unchanged, relatively unchanged. Yes. Yes, I think that's a very fair way to say it.
Albeit, I would say the innovation practice, I'll just describe it this way. A tire is a safety product and so, from there, we tend to manage our innovation on that side with the traditional. Folks might know it as a stages and gates type process, traditional project management, because there's an awful lot of implication of us not following all the regulatory requirements, et cetera. When it comes to some of these new solutions like our digital platform, that requires a little different innovation skill, if you think about it, because the implication of, "Okay, we didn't get out there within one hour to fix the tire. It took two hours," it's not a safety concern, we'll say, as much as an inconvenience. For really an agility, get out in the market, put something out there and see if it works, there you kind of see more of the lean startup approach that's made popular.
We kind of have to have both of those muscles now: the one for our core product and one really for the new stuff. Is there tension as you develop this new set of skills and new muscles, as you describe it? Is there tension that happens? Are there challenges? How do you go about making that kind of change without disrupting the core? It really starts with a recognition that one is not right and one is wrong, but which is appropriate. You've got to start at, what am I trying to do? What is it that I'm trying to manage and the types of decisions I have to make? Then you pick which of those two sets of skills is the appropriate one. I think where the tension comes in is if you try to do one-size-fits-all for all of it.
Respect that that stages and gates process works really, really well for managing risk for our traditional business, so don't try to force down their throat to do it the other way. Now, there are parts that fit for each. But, by and large, I think they is to just start with, what is the problem I'm trying to manage? What are my types of risks in front of me? Then, based on that, pick the more appropriate management tool. I think if you approach it from a more pragmatic way like that, you can relieve some of the tension.
You still get some of the tension but it really starts there. Get everybody talking about what is the problem we have to manage. We have another question and that is the question of business model because it sounds like, number one, it's a business model change and then you've been building the technologies needed to drive that business model change as opposed to, well, let's develop cool technologies and then figure out how to sell it. Yes. I think that's a great insight. Behind all this is really, how are consumers going to approach mobility going forward? As a lot of people talk about the new trends in mobility, it's basically a movement to fleets, autonomous vehicles, connected vehicles, and electric vehicles.
It's all enabling the shared economy; the last-mile delivery of everything by gig workers. Many of these things are coming in handy during these trying times of even COVID, right? People are able to get their groceries delivered, et cetera. People are viewing personal car ownership in very different ways. Now, that in and of itself makes us say, "Well, part of that personal car ownership is the tires.
Therefore, we need to figure out who actually is managing the vehicle, who actually is the decision-maker then for tires. In a lot of ways, then, our consumer business can start looking like our commercial business where you have fleet managers. Again, we have a lot of experience of fleets managers. Again, we have a lot of experience with fleets of all different types.
Fleet managers managed by data, cost of ownership, helping them with their downtime, making sure their vehicles are available because that's how they make their money. We do that not just by selling them a tire and going away but providing them a whole service model around it. We've made millions of service calls for, like, 18-wheeler trucks on sides of roads and we have less than a 2-hour roll time anywhere in the entire United States in order to do that. That is a business model.
That is not just, we sell you a tire. It's a great perception and it's really bringing that model now to these new types of emerging consumer fleets. When did the planning start for the new data-focused business model and set of technologies that you've had to develop? You really saw a lot of people talking about these trends probably over the last five years.
Now, again, I'll go back to, in our commercial business, we've operated that type of a business model for decades. But it's really getting enabled to be much more efficient and effective by digital. In the past, it would be, hey, there's a vehicle that comes onto a fleet yard. There's somebody running around with an air gauge and they're trying to figure out if any of the tires are low on pressure before the truck goes back out. Now with obviously a solution where you could monitor the pressure remotely, you actually know when that truck is coming in. You could say, "Truck #3, it's the left rear tire on the trailer on the outside position.
Have he or she pull over and we'll get it served immediately." You could be much more surgical and efficient in doing it. I think that that's been a bit of an evolution on the commercial side. It's a bit more of a revolution on the consumer side.
Really, those trends have become big in the last, let's say, handful of years. Organizationally, where has this sponsorship for this very large transition come from? In our company, it's our CEO. He's really out there talking about the trends, not just to the external public but to ourselves. He's put it as obviously my responsibility in terms of developing those capabilities. We go to market through regional businesses. Those regional business teams then partner with my groups in how we take it to market.
You might imagine we kind of take things up through incubation, bringing those technologies to it, and then how do you scale it and take to market happens through those regional businesses. You mentioned earlier that the contact surface of a tire and the road is about as big as your hand, yes? Yes. If we take something like an airplane where you have the downward force of the plane landing combined with the weight of the plane, how does that work and why doesn't the tire simply explode in shreds? You might imagine in a tire construction, let's say for your consumer tire, it has basically two what we'd call belts across the top. Then, in the side of your tire, it might have one or two layers of reinforced, basically, cords. Those cords are made out of anything from polyester to nylon to even blended materials sometimes with even aramid or you might better know that material as Kevlar.
An aircraft tire may have ten of those layers and four times of those belts. The second thing is an aircraft tire is going to have a lot more inflation. Go back to my comment, air carries load.
You put maybe 200 PSI in an aircraft tire. All that air in that tire is now there contained to carry load. It's really about the size of the chamber of air, how much reinforcement you need to keep that amount of air contained, and then that amount of air, under its pressure, offsets the load that you have to carry. That's kind of the simple mechanics, I guess I'd put to it.
Then the material science aspect of it must be particularly complicated because these cords that you were describing, they really do have to work. They really have to work and if you think of those, that rubber or the polymers between, they have to pass the load between those different reinforcements. It's as simple as, at that road interface, you have to pass all those forces through friction or contact. It then has to make its way down the sides of the tire.
It's typically a steel cord wound bead that actually sits on the rim and keeps that fixed to the rim. Then it goes to the rim and then, from the rim, it goes through the suspension into the vehicle. It's all about that load transfer and managing that load. I'm assuming you must work closely with the manufacturer of the wheel assembly because, at the end of the day, don't they need to work together as one unit? They do because, if you don't have good fitment there, you could have air leakage, you could have slippage, many things, obviously, that would be very undesirable. As we finish up, is there anything else that you would like to share with us about the nature of tires? Keep the air in them. Keep them aired up to the proper inflation and you will get the best performance, the longest lasting and, surely, the best that you can get out of the money that you spend on them.
They are an investment and we appreciate that and we thank everybody for their business, but the simplest thing for you to do is just keep air in them and they will serve you much better. I continue to believe that tires are fairly magical because of what they do, their size, and just the abuse that they take. Chris Helsel, thank you very much for talking with us today.
Thank you, Michael. Have a great day. We've been speaking with Chris Helsel. He is the chief technology officer of Goodyear. Before you go, please, please, please subscribe on YouTube and hit the subscribe button at the top of our website.
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