GE: Becoming digital industrial

Born in the Industrial Revolution’s second wave, the manufacturing giant GE is set to lead a productivity revolution in global industry by combining physical machinery and analytics. Denzil Samuels from GE Digital urges companies to go digital. The alternative is to perish.    

The Industrial Internet is here

From 1990 to 2011, productivity gains in industry averaged about 4 percent. The main drivers were 6 Sigma, lean manufacturing, and the just-in-time supply chain. The last five years, however, has been characterized by almost zero productivity gains. Why? Because technology hasn’t changed. Not all that much, anyway. 

Our Chairman and CEO Jeff Immelt has been telling the market for the last few years that if we can find ways of increasing productivity in industry by even 1 percent, it will drive trillions of dollars of value to the market. That’s how big this is. And the way to do that is to digitize industry. 

We believe this at GE, so much that so we’ve invested billions of dollars over the last five years to demonstrate what digital industrialization will mean for the world, much like the industrial revolution transformed everything. 

We’re actually a manufacturing company – we build jet engines, gas turbines, oil refineries, and so on. We have 420 manufacturing factories around the world, so we know how to build stuff, we know the physics, we understand the domain, and we have the expertise. That gives us a right to show the world how to digitize industry.

We have an approach that’s very, very simple. We name it Digital Twin – that’s when physics and analytics work together. Let me give you the example of a jet engine. Jet engines consist of blades inside the engines that drive the jet engine. Each blade is manufactured with a sensor. That sensor is transmitting real-time data to us every minute of every day, if that’s the way we decide to connect it. And that information is giving us the ability to build what we call a digital twin – when you have an avatar or a cyber copy of the engine that goes with the engine itself. With that, we can simulate what the engine is experiencing, whether it’s flying over the sandy skies of Saudi Arabia or the less corrosive skies of North America.

The blade within the engine is going to wear at different rates, depending on where it’s flying and how often it’s flying. And by simulating this, we can move from reacting to an engine failure. It allows us not only to be proactive, but also predictive. The engine that’s now being simulated, can take over the pain of major aircraft engine maintenance by replacing a single blade that’s worn as soon as we know about it. Or better still, predicting when it’ll get worn to the point when it needs replacing, so we can minimize the amount of time that the engine is actually out of commission. This minimizes downtime for the airline, which is obviously a good outcome.

Not only that, but we can give the airline digital information in real time. That can help them with flight operations like scheduling crew and handling cargo. We can also provide data in a whole bunch of other areas by just selling them a jet engine.

That’s taking this digitalization of industrials to a whole new level. Can you imagine if we’re doing that with cars, what possibilities will it bring to consumers, manufacturers, distributors, or the dealership? That’s what the digitalization of industry can do.

It takes an ecosystem

We have a three-pronged digital industrial strategy – GE for GE, GE for our customers, and GE for the world. Because we’re in industry, we have to start with ourselves. We have to prove that we can extract savings and productivity within GE. Actually, GE has already made US$500 million in productivity savings in 2016 by using smarter machines, and that number is expected to grow to US$1 billion by 2020. If we can do that, then we can take it to our customers and show them how to do it, too. Once we’re taking it to our customers, we’re designing an operating system for the digital industrial world that we’ll take to the world. 

The industrial Internet is built on a number of things. In the days of ERP systems, the ecosystem was about the customer, a software vendor like SAP or Oracle, and the systems integrator. In the world of the industrial Internet, it’s so much bigger. The ecosystem for a single solution could involve a hundred different players, so we need to make that architecture open so everyone can use it. Whether you’re a device manufacturer or a player in the telecom space, software, or data cleansing world, it doesn’t matter. Everyone plays in that space and everyone is as important as each other. So that’s what we’ve done with the digital industrial Internet, and that’s our collaboration strategy. 

If I ask you who heads up the consumer industry, you’d either say Amazon or Alibaba. If we talk about the B2B space, we might ask who owns the enterprise Internet? You’d probably say Salesforce or Oracle or SAP. But, if I ask who owns the industrial Internet, the answer is no one. There is no one in that space today. That’s why we want to own it, because we have the right to own it. But, the barrier to entry is huge.

The consumer Internet by 2020 will be home to about 200 billion products and services and the enterprise Internet home to about 225 billion. The estimate for the industrial Internet is half a trillion. 

Think about the companies that are doing something very disruptive in the marketplace. You know who they are: Uber, Airbnb. What do those companies have in common? They’ve found a way to make someone else’s assets more productive than the people who own those assets. If you think that the move to the industrial Internet and the management of those assets is a few years away, you’re wrong. The leaders in vertical industries are already working with us and many of our partners today. This is here and it’s now. And if you don’t find a way to do this, someone else will and they’ll steal your business. This is not just “hey this is a great technology, let’s just move to it”; it’s 100 percent about defending your business and finding ways to revolutionize and grow it. 

The industrial Internet is here today. You’ve got to get on board, because if you don’t in the next 12 months, you’ll be a follower, not a leader. You’ll lose market share and you’ll lose business.