GE’s Push with ‘Industrial Internet’ (Big Iron + Big Data)
Reducing Inefficiency and Creating New Value
In recent years, GE has focused its corporate attention on what it calls as ‘Industrial Internet.’ We can look at it as the intersection of industrial age and information age or in GE’s language: Big Iron + Big Data. The overarching goal is to design and deploy internet-connected device with sensors that collect data which can be systematically analyzed to anticipate and avoid problems instead of fixing things after the fact.
Jeff Immelt, Chairman of GE writing as early as in the 2013 annual report remarked:
We will lead as the industrial and analytical worlds collide. We believe that every industrial company will become a software company; that ultimately deep domain knowledge is tougher to come by than writing code. In this sense, GE seeks to link the “iron and the data.” Our assets have sensors that produce a customized stream of performance data. We can harness this data to optimize performance. We know that smart machines, guided by domain-based analytics, in a distributed setting, will drive new levels of productivity. We call this the Industrial Internet.
Our customers want our assets to operate with no unplanned downtime and optimal performance. Small improvements in asset performance could impact $20 billion of benefits for our customers. We are delivering software and analytical solutions that can take data from our installed base and turn it into productive outcomes for our customers. We call our data solutions “Predictivity,” and so far, we have launched 24 offerings generating $800 million of incremental revenue. We expect Predictivity revenues to exceed $1 billion in 2014.
Our systems can analyze the performance of individual engines in the Aviation installed base; this allows us to differentiate repairs, saving money and time for our customers. Through GE’s Healthcare Asset Management, radiologists can keep “images in the cloud.” This improves clinician productivity, expands networks of care and enhances diagnostic confidence. For our rail customers, one point of system efficiency is worth $2 billion of profit every year. In this market, GE delivers a complete solution from dispatch to network planning to train handling, called RailConnect 360. We plan to shift a substantial portion of our repairs to “condition-based” versus schedule-based; this will deliver substantial savings to our customers.
This is not limited to any one industrial sector—such as transportation or energy. It can be potentially applied to any industry where sensor-based data collection could drive bottomline efficiency but also enhance topline growth and innovation.
Now read Immelt’s 2016 letter focused on Digital Industrial online.
Here are some examples of Industrial Internet in action.
GE Aviation
GE Aviation has Integrated Vehicle Health Management (IVHM) technology that continually collects, manages and analyzes data throughout the flight, thereby providing a comprehensive set of health information for the engines, avionics, power, cabin and other aircraft systems.
GE Oil & Gas
In Oil & Gas sector, GE is monitoring deep sea drilling equipment to minimize downtime of critical equipment. According to GE Oil & Gas:
Blowout preventers, or BOPs, are among the biggest and most complex machines that most of us will never see. These 50,000-pound 60-foot-tall safety valves made from 70,000 component parts sit on top of pressurized oil and gas wells thousands of feet below the surface of the ocean. They serve as the last line of defense if something in the well goes wrong.
Many BOP parts have different lifespans and the massive machines have to be periodically pulled up and serviced. Workers perform much of the maintenance on a BOP at set time intervals because real-time information about the condition of the parts and usage is sparse. That information gap got a team of GE oil and gas engineers and software developers thinking: “We need to move from the ‘break-fix’ model to a maintenance model where we can advise customers to service a component based on measurements of its performance,” says Bob Judge, director of product management at GE Oil & Gas. “What if you had technology gathering BOP data so that the next time you pull it out, you know exactly what needs to be replaced and have the replacement parts available on the drilling rig? This information could save millions of dollars in unplanned downtime, adding substantial value for our customers and for their customers.”
“Telling a customer what to fix after it has failed is relatively easy,” he says. “Telling them to fix something before it costs them money is the magic.”
GE and Industrial Internet
There are other examples within GE. Details on GE’s ambitions for Industrial Internet are in a paper (pdf) that is well worth a read.
Bill Ruh, VP of GE Software and Analytics Center (Now is the head of GE Digital) writing on October 2, 2013 outlined six capabilities that industrial companies must adopt as part of their digital business strategy:
Data collection and aggregation. Industrial companies must collect and aggregate data and information from the widest possible range of industrial devices and software systems, as well as those from enterprise and web-based systems. They must be able to integrate and normalize different data types (streaming sensor data vs. transactional enterprise data), different response times (once per ten milliseconds vs. once per day), and different business requirements (real-time process optimization vs. less real-time asset optimization) and reconcile their use at different levels of analysis
Advanced analytics at the point of need. What’s required is a software-defined machine: the ability for assets to be abstracted into software running in connected virtual environments where analytics are continually tuned to the requirements of specific devices, business processes, and individual roles.
Cloud-agnostic, deployment independence. Industrial companies need a highly flexible deployment architecture that allows them to mix and match technology deployment methods — and avoid vendor lock-in — as their needs and technological options change. For companies that are bound by regulatory requirements, this may mean supporting private cloud deployments; for other companies, it may mean supporting third-party public clouds from various providers.
Extensibility and customizability. Industrial companies need a big data platform that is highly extensible and based on standardized APIs and data models that allow it to adapt to new capabilities, new devices, new data types, and new resources as they become available, while still preserving the capabilities of the legacy systems that continue to impart value.
Orchestration: Industrial companies must support the orchestration of information, machine controls, analytics, and people in order to ensure that the different components of the industrial big data world interoperate effectively. For example, a machine-level analytic that detects and responds locally to an operational anomaly must also be able to set in motion other analyses and actions (e.g., rescheduling flights or moving spare parts) across the network in order to prevent knock-on problems throughout the system. This requires the ability to self-tune and adapt as data, processes, and business models change.
Modern user experience. Industrial companies must deliver the above components within the context of a modern user experience that is no longer bound to a desktop; this includes supporting a wide range of mobile devices and user interaction models, as well ensuring that the user experience is tailored to the individual’s role and requirements at a particular time and location.
On March 27, 2014, GE along with AT&T, IBM, Cisco and Intel formed the “Industrial Internet Consortium” to improve the integration of physical and digital worlds.
An ecosystem of companies, researchers and public agencies is emerging to help drive adoption of Industrial Internet applications, a foundational element for accelerating the Internet of Things. The IIC is a newly formed not-for-profit group with an open membership that will take the lead in establishing interoperability across various industrial environments for a more connected world. Specifically, the IIC’s charter will be to encourage innovation by:
· Utilizing existing and creating new industry use cases and test beds for real-world applications;
· Delivering best practices, reference architectures, case studies, and standards requirements to ease deployment of connected technologies;
· Influencing the global standards development process for Internet and industrial systems;
· Facilitating open forums to share and exchange real-world ideas, practices, lessons, and insights;
· Building confidence around new and innovative approaches to security.
Review updates on GE Digital here.
The Industrial Internet will likely have big implications for how GE works. GE has embraced core principles of ‘lean start-up’ by releasing stripped-down products to monitor usage and rapidly changing designs based on usage patterns. Clearly, many other areas will change in due course.
Discussion Questions
- What’s ‘Industrial Internet’?
- Why is GE spearheading this big initiative?
- What new skills and capabilities should GE develop to lead with industrial internet?
- What business value to GE’s customers?
- Who are key partners for GE to lead in the digital era of big iron + big data?
