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The story of a new generation: how Caterpillar developed a new genset for market

The concept development, design, testing and production that led up to the recent release of the C175 diesel-fuelled generator set – offering up to 4 MW of power in a single high-speed package – provides a good example of how to bring an evolutionary product to the electric power market, as Caterpillar’s Bob Koval describes.

Two decades ago, Caterpillar Inc.’s Electric Power Division introduced the 3500 series of diesel generator sets. That series of diesel-fuelled generators had a ground-breaking platform and transformed the diesel and natural gas industry. It converted the medium-speed diesel and natural gas engines of the time into a lighter, more cost-effective and fuel-efficient engine. It also expanded the power range of high-speed engines and was a breakthrough in technology. However, as the 20th century drew to a close, it was clear to Caterpillar that the platform for the future needed to have much more power capability. It was time for a new generation of product.

The new engine platform, the C175, evolved out of Caterpillar’s product strategy work in the late 1990s. The first step was to determine whether there was sufficient market opportunity to develop a business case to justify the investment that would be required for this new platform. This involved identifying the requirements that customers would demand in order to switch from familiar, well established, medium-speed products to a new high-speed technology.

The C175 being built at Caterpillar’s factory in Lafayette, Indiana
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Gathering data on the size and growth trends of the large reciprocating engine market was not an easy task. However, Caterpillar was confident that it could determine demand correctly based on its ability to query a strong base of existing high- and medium-speed engine users of its 3500 and 3600 series generator sets, as well as its construction, marine, petroleum and rail customers worldwide. We knew that if we got it right, the product would actually create opportunity for itself, both in making applications possible that were formerly unable to be achieved with large stationary engines, and in enabling the replacement of larger footprint medium-speed units with a single C175. To get the product right, the company had to identify exactly what the market wanted.

Asking the customers

Caterpillar conducted a multi-phase market research initiative to identify critical customer requirements for this type of engine platform and genset package. First, personal interviews were carried out with around 100 customers from various countries, representing the major applications of every Caterpillar business unit including electric power. These interviews helped to verify and understand what engine attributes customers took into account when making purchase decisions.

Information gained from these interviews was then used to construct a conjoint study. We conducted over 1000 interviews in 30 different countries and in seven different languages for the three major applications.

The research identified a core set of key customer requirements: reliability, durability, performance, service, installed cost and operating cost (Figure 1).

Figure 1. What do customers value?
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The research also provided a modelling tool to simulate customer preferences when trade-offs were being considered. For example, if durability is improved by lengthening service intervals, we would want to be able to determine whether customer preference for the product did or did not increase. Other factors considered included initial price versus serviceability or fuel consumption.

In addition to these critical customer requirements, it was also important that the new engine platform met current and, more importantly, future international emissions regulations and limits.

Our Voice of Customer (VOC) market research served as the basis of the functional product specifications or blueprint for the engine and generator set – including the components, sizes, weights, optimization targets – and the critical performance characteristics the product needed to deliver. Some of these specific requirements included:

  • mean time between overhauls
  • transient response
  • weight
  • brake-specific fuel consumption
  • emission level
  • power ratings.

The research also identified the main customer requirements for the generator set package. ‘We really went into this with an open mind,’ explained Joey Ortman, New Production Introduction (NPI) Manager for the C175 Package. ‘We were careful not to set expectations and really used the information gathered throughout the research process to create a functional specification that mirrored the desired customer attributes.’ Some of those key findings included customer requests for:

  • multiple circuit breakers
  • National Electrical Manufacturers Association (NEMA) Class H insulation
  • improved motor starting
  • decreased footprint
  • US Tier II emissions capability
  • reduced airflow
  • added flexibility within the controls.

Meeting these requirements led to improved system integration and created an enhanced performance generator set package with greater reliability.

As the product design evolved, Caterpillar continued its VOC market research, shifting the project’s primary efforts to the Cat dealer organization. ‘After we developed the functional specification and started to design the product, we began a series of dealer panels. We conducted five sessions with dealers from all over the world representing each of our key markets,’ said Joey Ortman. The aim of this phase, which is ongoing, is to gain dealer input and perspective, particularly on serviceability, and to review the design targets and status of development to ensure the functional specification always aligns with customer requirements.

According to Rodney Shurman, Caterpillar’s C175 Engine NPI Manager, this research made it clear that customers wanted more power and they wanted more power in a smaller package.

‘The new Cat C175 has been specifically engineered to address the current and future needs of the worldwide electric power industry. It is the result of extensive customer research to identify key product benefits sought by our engine and generator set customers,’ said William J. Rohner, Vice President of the Electric Power Division.

Bringing it to life

According to Craig Kroeger, Product Manager of large high-speed engines for Caterpillar’s Large Power Systems Division, Caterpillar’s NPI process is very structured and thorough. ‘It begins with the identification of dedicated sub-teams and the assignment of focused, specific activities for each. Each sub-team is assigned a charter that is focused on specific goals and activities which must be completed within the timeframe of the master project plan, using the full complement of analytical methods, statistical tools, design models and validation techniques. Team members are drawn from areas of expertise in marketing, engineering, manufacturing, global purchasing, finance and ordering – and are joined by stakeholders who provide strategic advisement throughout the process.’

A rigorous project governance process is then employed. This includes clear metrics and frequent reporting to ensure that the project remains on track in terms of timing, cost and quality. Some 20 of these teams were dedicated to individual systems and supporting processes within the actual development of the Cat C175 engine platform.

While the C175 engine platform was under development, the C175 generator set package was simultaneously going through its own NPI process. ‘A joint NPI team manages the concurrent generator set package and engine development. The project falls under one master plan that is updated on a bi-weekly basis,’ explained Brian Blevins, NPI Programme Manager, Electric Power Division. ‘This assures that both NPI teams are ready before moving on to the next phase in the process.’

Figure 2. Caterpillar C175 NPI Process – Alignment with 6 Sigma
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Caterpillar’s NPI process, which is aligned with 6 Sigma practices (Figure 2), contains seven gateway reviews. Each review must be passed successfully before moving on to the next stage. A new product’s journey includes an initial concept stage, during which key customer requirements are defined. This is followed by development, pilot and production stages using design, analysis and performance data to complete the validation work for each. The product is released to production after a thorough readiness review at the ‘sixth’ gateway. After a year of production, the health of the product and supporting systems are evaluated in the ‘seventh’ review.

‘In developing the C175 engine platform, Caterpillar realized the need for the traditional NPI process to be strengthened with a high level of process efficiency and discipline,’ stated Craig Kroeger. It was decided that the best strategy would be to link this process with 6 Sigma methodologies. ‘Aligning NPI with 6 Sigma allowed the team to further expedite the process, remaining within the stringent parameters of the competitive timeline while also maintaining the highest level of process quality.’

The latest simulation and analysis tools, including rapid prototyping and multi-variable optimization, were used to further streamline the product development process and timeline. Rapid prototype technology provided the capability to design the product on a three-dimensional model and then create a product mould that allowed the team to determine elements like tolerances and casting weights before the casting process. This proved highly time-efficient, as it permitted design adjustments to be made without having to create multiple sets of actual castings. Efficiencies achieved through the prototyping process resulted in overall cost savings that could be passed onto customers.

Tests, tests and more tests

To boost confidence in the new design and meet NPI test requirements, the team instituted a robust validation and analysis programme.

Doug Long, Caterpillar Engineering Manager, Core Engine Test, explained: ‘As Caterpillar Electric Power would be the first division to introduce this new engine platform, an exhaustive amount of reliability hours and extensive testing were required. We knew as we were developing a new engine to be used in over 30 different applications across several divisions of the company that it needed to be validated properly. Meeting all the requirements through test and analysis was key – not only in how we ultimately achieved that, but in how we organized to do that as well.’

A major strength of the product development process for the C175 was the team’s comprehensive consideration of every issue. ‘Each one was documented – there was nothing left to chance and there was nothing explained as a fluke,’ explained Doug Long. ‘Every issue that arose during the programme was worked on extensively until we understood the root cause and had a validated solution.’

‘A validation plan is just that,’ continued Doug Long. ‘ It is our initial plan and that’s the exciting part of testing engines in the lab. As you receive data or as you see an issue that you need to resolve, you have to make changes on it quickly – on the fly – and you have to evolve in terms of answering the question – what do we test next?’

With numerous product criteria on which to deliver in an abbreviated timeframe, it was determined early in the process that test lab procedures would need to run 24 hours a day, seven days a week. ‘Many of our tests were standard performance verification tests, but many were also very abusive and brutal to help us really understand the limits and capabilities of the engine,’ explained Doug Long. ‘It’s not often you would expect to wear a parka in a test cell, but we had the opportunity to experience that and other extreme conditions while testing the C175.’

‘The validation process we implemented for the C175 has proven to be very successful,’ concluded Doug Long. ‘It pushed the limits, while also allowing us to use 6 Sigma in ways that we’ve never done before.’


In addition to the investment in development, a substantial investment was also needed at the factory level. Gary Stampanato, General Manager at Caterpillar’s Large Engine Center in Lafayette, Indiana, explained: ‘Assets were put in place to manufacture the C175 engine block, the crankshaft and connecting rods. This is also where dedicated assembly of the engine platform, as well as the packaging of the engine and generator set, will be performed.’

Flexible assets already in place for the 3500 engine blocks could be used for the C175 platform in addition to new equipment for the assembly lines. ‘The state-of-the-art machining systems used are highly accurate and offer an elevated level of process control and repeatability – allowing machining of the engine block to incredibly close tolerances. This level of precision results in the high performance and reliable products for which Caterpillar is best known,’ concluded Gary Stampanato.

Going to market

Caterpillar also carried out research on how best to launch the new product to target audiences including customers, trade press, Cat dealers and even the internal Caterpillar teams. Tim Scott, Commercial Marketing Manager for the Electric Power Division, said: ‘During the VOC research, we asked the Cat dealers what they felt was needed to be part of this next generation product launch to create a successful and valuable event that would drive both product awareness and dealer business.’

Since the introduction of the 3500 series more than 20 years ago, there have been significant advances in communications technologies. Considerable effort was put into determining how these technologies could be used as part of the C175 product launch. ‘Intranet, E-learning, and Webinars with 3D simulations all became part of the mix,’ explained Tim Scott. ‘Thanks to these tools, the global sales force was made aware of the new C175 engine platform and its attributes in only one week.’

The marketing team identified three key foundational goals for the C175 product launch:

  • demonstrate customer value
  • build confidence
  • generate excitement.

‘All three were infused into each marketing activity, whether it was an advertisement, dealer e-learning tools or the speeches delivered to the trade press,’ said Tim Scott. ‘In focusing on how we could demonstrate customer value, we had to think carefully about what it was about this product that would help customers meet their business goals,’ he expanded. ‘We knew we were asking the customer to “take a leap” in accepting a brand new platform. For that reason, we needed to clearly communicate the diligent processes that drove product design, engineering and testing – and very specifically how this platform would live up to customer requirements.’ It was also important to stress the new machining technologies employed that delivered longer life, via more reliable components, and a more reliable product overall.

‘Early product awareness momentum was achieved through multiple channels – ‘teaser’ ads, targeted e-mails to drive internet traffic, industry trade show previews, and customer, dealer and press events hosted on multiple continents,’ explained Tim Scott. ‘As we recognized the market segment for this product existed in a rather intimate community of professionals, our goal was to reach every major influencer face-to-face.’

A large proportion of this was accomplished at Caterpillar’s PowerUp customer/dealer event, which ran over the course of two weeks in February 2006. Dealers and customers from all over the world were invited to Lafayette to get a first-hand look at the new C175 engine platform for the electric power industry, and to learn about its development and features through a series of speeches and panel discussions, break-out sessions, plant tours and exhibitions. This type of event also provided the opportunity for extensive ‘word-of-mouth’ exposure leading up to and following additional events around the world.

Spreading the word

After categorizing the target audience by application, industry segment and professional role, unique messages were tailored to each. Critical customer requirements were examined to determine how the features of the C175 generator set could be linked in order to underscore the validity of the marketing message. ‘To be fair, all manufacturers boast high performance, low installed and operating costs, reduced service requirements, increased performance, durability and reliability. The differentiation was how Caterpillar addressed each one and demonstrated concrete evidence on the C175’s ability to deliver,’ said Tim Scott. The goal was to help customers understand the core key elements and, most importantly, how these translated into a proven product that could positively impact their business. Communication focused on ‘where it fits’, ‘what it competes with’ and ‘why it is better’.

Another part of the overall product launch strategy was garnering positive coverage from the international press. Using information-rich press materials and ongoing media relations efforts, Caterpillar sought to educate key representatives from trade publications that served as an important information source for potential customers – including influencers, purchasers and specifiers. This included their attendance at a worldwide press event in Lafayette a day ahead of the actual product launch. Attendees at the event were given an advanced look at the new C175 engine platform. They learnt about its development and features through a series of speeches, a plant tour, and one-on-one interviews with Caterpillar experts. Efforts were also made to hold smaller regional press conferences in all Caterpillar’s major international markets.

In addition to educating external audiences, it was also considered important to educate and excite Caterpillar’s global sales and marketing team of over 1000 people. An internal communication plan was therefore developed to reach these teams, including the global dealer network.

The result

So what makes this new product introduction programme so unique? We initially defined the C175 programme by listening to what our customers told us was most important to them, then used the Caterpillar C175 teams to execute the process. The teams made the commitment upfront to meet critical customer requirements by implementing a robust validation and development plan. We didn’t want to modify the design in the field or in the customers’ hands. Instead, we wanted to really drive all of that work at the onset of the programme and know that, at the end of the day, we’d be giving customers exactly what they wanted in the final product.

Bob Koval is Electric Power Product Manager of Caterpillar Inc.
e-mail: catpower@cat.com

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The C175

The resulting engine design consists of five key systems – air system, fuel system, electronics and controls, cooling system and lube system.

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The air system was designed to enhance engine breathing using a tall cross-flow cylinder head with larger ports to allow a greater amount of cool, clean air into the combustion chamber at high volumetric efficiency. The air system is engineered with a highly efficient turbocharger with a cast-titanium compressor impeller. This helps to extend turbocharger life to at least one major overhaul, with lower overall operating costs for the customer.

This fuel system, controlled by the ADEMà‚â„¢ A4 Electronic Control Module, uses a high-pressure fuel pump and control valve to maintain the desired fuel rail pressure. The Cat Common Rail Fuel System has the capability to deliver multiple injections within a single combustion event with unprecedented precision and repeatability.

The electronics and controls, as part of an integrated system, utilize the ADEM A4 controller to provide low fuel consumption and reduce emissions. In conjunction with the electronic thermostat, it also precisely maintains coolant temperature and oil viscosity to add reliability and durability to all engine parts.

The cooling system was designed to minimize heat rejection and to obtain higher overall engine efficiency by targeting only areas of the engine requiring cooling. In addition, the length of the exhaust port was reduced to minimize unnecessary heat rejection into the jacket water. This improved efficiency means a smaller radiator and cost savings.

The lube system features a pressure regulation valve that allows the engine to maintain optimum oil pressure at all speeds and loads. It also improves cold-start capability by providing full gallery oil pressure in less than four seconds. Oil change intervals are increased from the typical 500 hours to 600 hours, reducing operating costs for customers.

The engine design includes technological enhancements and advances in major components such as the crankshaft, bearings, piston, rod, block, liner, head, valves and valve mechanism, and camshaft. The advanced design and new materials contribute to the overall durability of the components. Strengthening components and extending the life of the equipment results in less frequent maintenance requirements and, in turn, increases engine reliability.

The SR5 generator set is available in low, medium and high voltages. It meets Class H insulation system requirements, has 2/3 pitch and additionally features the Cat Digital Voltage Regulator with microprocessor-based VAR/Power Factor control and direct three-phase sensing. The C175 controls package includes a standard Electronic Modular Control Panel (EMCP) 3 control system that offers enhanced monitoring and controls while providing flexibility and site-specific configurations. Two types of radiator packages, a horizontal remote and vertical package radiator, are also available.

Table A. C175 specifications
Model C175-12 C175-16 C175-20
Bore diameter (mm) 175 175 175
Stroke (mm) 220 220 220
Displacement (L) 64 85 106
Weight (kg) 8200 10200 12300
Power (kW) Mechanical 1400-2700 1700-3650 2100-4560
Power (kW) Electrical 2500 3000 4000