When Wärtsilä introduced the Wärtsilä 31 engine last June, the world took notice. The technical tour de force was the world’s most efficient 4-stroke diesel engine, and it was even granted a title in the Guinness World Records.
It was partly thanks to this groundbreaking new engine that Mr Ilari Kallio, head of Wärtsilä’s Research & Development unit, received the Chief Technology Officer of the Year award earlier this year in Finland.
Appointed to his current post in 2014, Kallio has been involved in Wärtsilä’s R&D ever since he started working for the company in 2006. He tells us that Wärtsilä likes to approach R&D from the point of view of value innovation.
“It should be the objective of all product development to create the best possible value to the customer,” Kallio describes his view on the essence of R&D.
He also thinks that new business models should constantly be sought in the R&D process. Thanks to digitalization, the time for that is perhaps more ripe than ever before.
“New business innovations are emerging all the time, in all sectors of industry,” he points out. “Just look as Uber and other fascinating new concepts. I think that in R&D, you cannot merely focus on technology. You should also try and figure out how to use all that technology to create entirely new ways of doing business.”
Risk Management for the Customer
Indeed, when we take a closer look at Wärtsilä’s offering, we can see signs of that philosophy.
Wärtsilä today boasts an impressively wide portfolio of products and services. Whether we are talking about ships or power plants, Wärtsilä can deliver comprehensive, integrated systems and solutions to these complex structures that go way beyond the power source itself, also providing asset management, maintenance, optimization, and much, much more.
Such a spectrum, we learn, is important for two reasons. Firstly, the investments related to Wärtsilä’s line of business are most of the time capital-intensive and have very long life cycles. Needless to say, you are going to want to make the most out of such an asset.
Secondly, keeping that long life cycle in mind, it is extremely difficult to predict the direction towards which the world is heading and the changes to come. Which fuels, for instance, are going to have the best ratio of availability, price, and performance in a couple of decades’ time in a specific geographical location? No, we don’t know either.
“With all the uncertainties surrounding us, you cannot just choose a certain scenario and put all your bets on it,” says Kallio. “That’s why we at Wärtsilä are placing a particularly strong focus on fuel flexibility. By doing that, we can offer our customer great solutions for all scenarios or, in other words, risk management against any unexpected developments.”
“Today, an increasingly wide range of both liquid and gaseous fuels are available,” he continues. “Our technology is giving our customers the opportunity to choose between two or more fuels, depending on price, availability, or other factors.”
The benefits of fuel flexibility go beyond the customer’s business, too. From an environmental perspective, different types of gases can offer reduced emissions. Furthermore, gas fits well alongside renewable sources of energy, and can therefore support the transition to a low-carbon society.
The Wärtsilä 31 medium speed engine was the result of years of development. The engine significantly reduces maintenance requirements and costs, while raising fuel efficiency, fuel flexibility, and operational optimization to new levels far beyond anything else currently available. (Image courtesy of Wärtsilä)
Development Requires Partnerships
Wärtsilä is innovating on all fronts, and that was in fact the original reason for Industrial PRIME to pay Kallio a visit, too. We wanted to learn more about the thoughts of the Finnish CTO of the Year.
“We live in interesting times. A large number of things are undergoing profound changes globally,” Kallio points out. “Consider, for example, energy systems. New innovations are in great demand, and they can have a major effect on things. Wärtsilä is taking all this into account in its R&D, we are working hard to promote change.”
In addition to gas and environmental technologies, Wärtsilä has a particularly strong focus on digitalization. According to Kallio, Wärtsilä is constantly coming up with ideas for new digital services.
“In the near future, digitalization is going to be part of all of Wärtsilä’s products and services,” he confirms. “We believe that it is another great addition to the mix, further promoting environmental sustainability while offering the customer improved performance and security against uncertainties.”
A recent example of digital innovation is Wärtsilä Genius, a new service portfolio helping Wärtsilä’s customers optimize their assets, operations, and business. According to Wärtsilä, Genius will take the digitalization of the marine and energy industries to the next level.
In 2015, Wärtsilä spent €132 million (about 2.6% of its turnover) on R&D, and the plan is to keep up the pace of innovation. In spite of the investments, however, the fate of Wärtsilä’s upcoming R&D success is not entirely in the company’s own hands.
Like any player in the field, Wärtsilä needs partners too, but it is a cold fact that the operational environment for R&D is undergoing great changes as well. A good example is university research, which is constantly jeopardized owing to cutbacks.
“Cooperation with universities is of great importance to all industries,” says Kallio. “If universities lack the conditions for high-quality research, industries and their R&D are also going to be in trouble. This, in turn, will affect competitiveness and entire economies. Wärtsilä is concerned about the situation, and we are working hard to find new ways to promote this cooperation.” A solid statement from the award-winning man whose surname means ‘rock’ in English.
Finally, we are curious about whether the rise of Asia is going to make things even more challenging for European R&D. Perhaps surprisingly, the answer is “no”.
Rather than a competitor or a threat, Kallio sees Asia as a partner: not only is Asia today an important market for Wärtsilä, cooperation with Asian businesses also helps the company keep up with (or ahead of, actually) the competition.
“Business and R&D are becoming increasingly globalized, while knowhow and value chains are more and more networked,” Kallio states. “As product development cycles speed up and new competition arises constantly, you need strong, global networks to maintain your competitiveness. You cannot stop even for a second, because otherwise you’re going to fall behind.”
Text and main image by Industrial PRIME
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