The Internet of Things (IoT) has conquered another discipline — the industrial machine. And no less than GE spearheaded the initiative. The company is calling its initiative “Brilliant Machines.”
GE’s plan is actually very simple. Tap into the industrial Internet, which is basically just the business version of the Internet of Things where it is the machines that are connected to the Internet instead of people. Then, mix that connectivity in with software and analytics to make it all very efficient. The company is pouring $1.5 billion into the industrial Internet and big data.
One of the company’s first forays is an 180,000-square-foot battery factory that was fitted with more than 10,000 sensors. The sensors keep track of anything and everything in the factory, including the kinds of powders that are used to create the ceramics that go into the batteries, the temperatures of the ovens where these ceramics are baked, the time with which every batch of batteries are inside a particular oven or part of the manufacturing line, and the even air pressure. Employees can then check up on everything using iPads that are connected via WiFi.
When the company gathered data from the sensors it found out some pretty interesting things. For instance, it learned that some parts failed their quality tests if they stayed too long in the oven. So GE is now monitoring these parts and how long they stay in the oven to cut wastage.
GE is making its investments in several areas. One is gas and steam turbines where you have 52 million labor hours per year that translate to $7 billion worth of labor cost to service more than 56,600 turbines. There’s the commercial jet aircraft that requires 205 million labor hours to maintain every year. The world’s 120,000 diesel electric rail engines need around 52 million labor hours to maintain annually. That is equal to $3 billion in labor costs.
The company is also investing in healthcare delivery, getting into equipment maintenance and servicing. GE is pouring money into getting the industrial Internet making it more efficient for computer tomography scanners and magnetic resonance imaging machines. MRIs and CT scanners alone need around 4 million labor hours that translate to $250 million of labor costs yearly.
These investments in the power, aviation, healthcare, and rail industries are aimed at helping companies lessen the amount of time and the cost of maintaining these machines. The sensors that GE builds into these machines can help do that. For example, engineers who service a locomotive engine will have ready access to data right on their smartphones and tablets. The data will be run through visualization and analytics software making it easier to interpret. They do not even have to be onsite. Instead, they can be halfway across the globe, but still accurately relay what needs to be done to people who are onsite. The wealth of information available and the analysis and the collaboration tools that GE factors into these machines can help lessen the maintenance time and costs.
GE wants the industrial Internet to help companies cope with the challenges of going through a lot of complex tasks, by giving them a way to collect data, interpret and analyze it, and then act on it.
It helps in:
- Asset optimization and problem solving — Using big data, businesses will be able to pinpoint relationships that were previously not possible. This way, you could optimize your assets and performance.
- Data collection and insights — Analytics is a big part of the industrial Internet and you can get insights, attain industry expertise, and plan your action from all the data you have.
- Situational awareness — You can monitor your assets to see where and what their statuses are, and get more information, as you need it.
- Collaboration — The Industrial Internet does not only help you gather data and analytics, but also share it with stakeholders. Collaboration could facilitate multi-party analysis.
This activity is paying off for GE. For the year 2013, the company earned segment profits of close to $5 billion for power and water, $2.2 billion for oil and gas, $4.3 billion for aviation, $3.0 billion for healthcare, and $1.2 for transportation. All in all, most of these segments have a positive growth year on year except for power and water, which suffered from lower volume and lower cost productivity. All of these gave GE Industrial an overall profit growth of 5%, fueling an 11.3% overall return on total capital.
Not bad really for an investment of only $1.5 billion within a span of three years.