The Power of One
“If you went to bed last night as an industrial company, you’re going to wake up in the morning as a software and analytics company.” That was Jeff Immelt’s neat and short summary of the incredibly complicated process of fundamental transformation that GE’s industrial businesses are engaged in. The chief executive offered it up at the company’s Minds + Machines conference in October 2014.
At the heart of this transformation is the idea of the Industrial Internet – a phrase that started to gain currency within GE a few years ago when Immelt used the first Minds + Machines gathering to set out his vision of a digital future built on GE’s engineering heritage. It’s a future in which the physical and analytical worlds are colliding, with the industrial space – where GE has lived for more than 140-years – being re-shaped by ‘big data’, opening up new and unprecedented levels of productivity.
In an age of ubiquitous internet connectivity, thousands of machines, from equipment on the sea floor to pipelines and industrial facilities, can be monitored constantly via sophisticated sensors and linked together by wireless communications into giant networks. Suddenly, vast new sources of real-time data become available, and in gathering, analysing and presenting those rich streams of information, GE is starting to realise the potential of the Industrial Internet to transform the way its customers operate – and the way GE itself does business.
Naturally, a major part of GE’s commitment to leading the Industrial Internet movement has involved building big, new capabilities in software and analytics that can start to deliver the benefits for the company’s customers. For this reason, GE has invested in a new software center in San Ramon, where Ashley Haynes-Gaspar, Software & Services General Manager resides.
“The software center has been a $1bn investment by the company here in San Ramon,” she explains. “It started with eight employees and has expanded to north of 1,000 employees in three years. What’s powerful is the calibre of talent that GE has been committed to attracting. We have 140 data scientists here; we have people who are experts in software development; we have about 100 interaction designers, who are experts in user experience.”
The big potential win that GE sees in the adoption of the Industrial Internet is summed up in what the company calls The Power of One. This is based on the idea that GE can help its customers to harness the vast new sources of data that the Industrial Internet opens up in order to make their operations more efficient and productive. And across whole industries improvements even as small as 1 percent can produce very major effects.“One of the things that GE talks about is the economic opportunities that exist at large for industrial operators and frankly the number is huge,” says Haynes-Gaspar. “The Industrial Internet has the potential to boost productivity and eliminate enough waste to save industries more than $150bn annually and add $15 trillion to global GDP by 2030 – and that is through just the power of 1 percent.“If you drill down to what that means for the oil & gas industry, one of the most compelling ways to think about it is around recovery rates. The average recovery rate of a well is 35-40% globally. If we can figure out, through the Industrial Internet, how to get that from 35% to 36%, you’re talking about [another] 80bn barrels of oil. That’s the equivalent of three years of global oil production. That is an example of the power of 1%.”
For GE’s customers, the major benefits of the Industrial Internet lie in its ability to unlock insights that were not previously available. How can they run their equipment more efficiently? How can they achieve improved reliability, ensuring their operations remain running more of the time and minimizing unplanned downtime? The streams of data that the Industrial Internet is starting to make available are helping GE’s customers to start answering these questions and are attracting growing interest among the leaders of the oil and gas industry.With growing ability to offer big data solutions on top of industrial machinery and deep domain expertise, GE Oil & Gas is on its way to delivering on the vision of a fully connected enterprise, connecting data across the value chain and eliminating silos. With a connected enterprise, data-driven insights relating to operations and maintenance can be made available faster and to a much broader audience, resulting in the ability to deliver technical expertise and operational support globally.
One of the first major enterprise projects is currently being carried out with one of the US’s major gas pipeline operators, Columbia Pipeline Group (CPG). Challenges for the pipeline industry include aging infrastructure, the loss of specialist expertise as an aging workforce reaches retirement, and increasing pressure from regulators concerned about safety and reliability. To help CPG manage these challenges, GE Oil &Gas, in partnership with Accenture, has delivered a software-based service called Intelligent Pipeline Solution, which compiles data from many valuable sources, including pipeline inspections, seismic monitoring and local weather conditions to produce a dashboard colour-coded red, yellow and green covering sections of pipeline that may span several states.“What that allows you to do is to risk-assess your pipeline and decide where and how to deploy your resources,” says Haynes-Gaspar. “The other really interesting thing is that it allows you to do scenario planning and analysis. So you could say, ‘What is the impact of increasing the operating pressure in my pipeline?. What’s the probability of an issue occurring and where is it likely to happen?’”
A second major project involves an international oil company that wanted to be able to monitor machines across all plants, located in different parts of the world in order to understand why some facilities were operating more efficiently than others and work out how to bring all of them up to the standards of the best. GE Oil & Gas is helping them achieve this with a solution they are building called Unified Operations.
“When people look at the Industrial Internet, they tend to look at optimising a particular outcome at a particular plant,” says Haynes-Gaspar. “If they’ve experienced three days of downtime in the past year, how do they make that two? This company is coming at it from a different direction and asking how do I drive fleet wide optimization? One facility may be operating at 97% uptime; one may be at 83%. How do I use smarter systems to understand process information, equipment information and service information, sharing insights across operations and P&Ls, so that I can make better decisions across the globe?”
The Unified Operations software that GE Oil & Gas has built in collaboration with this customer will cover plants around the world by the end of 2015 and, says Haynes-Gaspar, will also mark another first for GE. “We are touching both GE and non-GE equipment. In phase one, which will be deployed at the end of this month, we will cover 160 gas turbines, of which only 40 are GE’s. By the final phase next year, we will have 5000 pieces of equipment under management. This includes GE, non-GE, static and rotating.”
Looking further ahead, she believes that the more companies can bring together information and extend their analysis right across their operations – from upstream production through pipeline transportation and on to industrial and shipping facilities – the greater the opportunities will be to improve efficiency and reduce downtime.There is clearly much further to go before the real potential of software and big data to transform industries such as oil and gas will be fully realized. Already, however, the development of the Industrial Internet and the growing importance of software within GE are fundamentally changing the way the company operates.“Customer co-creation and how solutions and software are built in San Ramon, are informing the culture of GE at large,” says Haynes-Gaspar. “Everything that happens at the software center happens only when we have a customer who’s agreed to build it with us.” Instead of years of development before a product is taken to market, the new way of working involves 30-, 60- and 90-day prototyping that brings together staff from both GE and its customer into joint teams. This process of constant collaboration with customers to solve their problems is moving GE closer to a service business than a traditional industrial manufacturer, she believes.“I’m tremendously excited to be on this journey. We have the opportunity to redefine our 140-year-old equipment company into a service business, a software business, one that is more customer-centric, one that is more nimble and is able to move at the speed of software. It’s a great time to be part of this transformation.’’
“The power of the Industrial Internet is really about what happens when 50bn machines become connected and what insights come from that.”
To find out more about the forthcoming Minds + Machines event- click here.