Imagination at work

Boosting Productivity with Industrial Internet

The Digital Industrial Company

Shefali PatelGE Digital

Our Perspective: How GE is participating in the 4th Industrial Revolution

1. Digital Industrial Emergence• Strategic Choices and when they matter most• Productivity Paradigm• Rise of the Platform and Apps- A different way of commerce• What is Industrial Internet of Things

2. GE’s Approach• Reorienting the company• Predix Platform & Apps- Current State & Future Investments• Use cases

3. Partnerships• Never a better time to partner• Opportunity to leapfrog to next gen tech

Outline

Industrial Markets are at an Inflection Point

• Renewables & storage steadily cheaper, pressuring fossil fuels

• Electrification of transportation – poised to rise• Private car ownership – poised to decline• Supply-driven cost pressure on oil & gas• Decline of retail foot traffic• Rise of direct-to-consumer CPG + ecommerce• IoT + AI and redeployment of human capital• Rise of localization and protectionism

New Industrial Infrastructure, Not Just a Technology

Cost of:• Sensors• Storage• Compute• Cloud services

• Sensors per Asset• Assets with

Sensors• Data

False Positives, False Negatives

View of Operations, Demand Sensing, & Supply Chain

Machine Learning & Advanced Analytics

500 sensors on a locomotiveThousands of locomotive instrumented

$1MM of computing power in 1996…is available for ~$500 today

From asset optimization to system optimization

6

Industry Evolution

New infrastructure drives productivity growth.

1750-1830: Steam, Rail

1880-1920: Electricity, Telephone

1960-2000: Computer, Internet

2010-…: IoT, Big Data, AI

New market entrants capitalize on the new capabilities and emerge as leaders.

The most agile incumbents invest in order to survive and thrive.

Machines + Data + Insights = Productivity

With every new beginning, there are creative forces of change…

“Industrial companies are in the information business. If you went to bed as an industrial company yesterday, you woke up as a software company” Jeff Immelt, Chairman and CEO, GE

Know Thyself, Know the Customer, Never Stop Innovating”. Beth Comstock, Vice Chair, GE

Learning culture with institutional practicesLeadership. Risk. Commitment

Market Orientation. Technology Innovation.

To continue to grow, maintain an essential discomfort in the world

Point in Time Matters: Global Market Dislocation + New Government + Technology Maturation & Convergence

Industrial

Disruption Outsidethe Core at Speed & Scale

Transformation of The Core

Strategic Choice and Change

• 1.5B Investment to Build Software• Outpost COE away from HQ• Comfort in good enough

Business Design & Culture Change

Our journey started in 2009……

Digital

Physical Virtual Machine Human Mind Hardware Software Sensors Data & Insights OT IT Material Science & Physics Data Science & AI Product Platform +Apps Domain Experts Digital Natives Millennials Century Old Industry Icon Silicon Valley Start-Up Value Chain Ecosystem

To create and inhabit a new world at the intersection of dualitiesDigital Industrial

TransformationBy Evolving our Culture

Being Open to Ideas from Inside & Outside. Adopting Horizontal Thinking.

20BNHotel Service

50BNTaxi Service

18BNConsumer App Economy

Owns no vehicles

Owns no real-estate

Creates a few apps

UBER

Apple

Landscape is changingSoftware has impacted every industry

Consumers benefitting. It is now Industrial’s turn for

interconnectedness

Source: Harbor Research, IDC, TCG Analysis

Consumer ~$170B Enterprise [IT] ~$206B Industrial [OT] ~$225B

Applications

Platform

$82B $131B $125B

$88B $75B $100B

The Rise of The Platformto facilitate interconnectedness

Common Thread: Purveyors of the Platform & Services

Connected Machines at the Core of Digital IndustrialBy 2020

Winners will master data and insights ... At speed & scale

152MCars connect to the

internet…6 fold increase

10BInternet connected

light bulbs

+1BGrowth in the

installed Base of Smart

Meters

108BTerabytes a day generated by GE

machines

Established Companies Vying for success in the IIoT Market Market By 2020: ~$300B

50 B Devices Connected

What is Industrial Internet

Catching the Wave to create a new industrial reality

Intelligent Machines

AdvancedAnalytics

People atWork+ +

GE FOR GE

PRODUCTIVITYDigital threadPredix + data

Digital twin

GE FOR WORLD

PLATFORMPredixSecure

Cloud for industry

GE FOR CUSTOMERS

APPLICATIONSGE’s software business“Inside-out” strategy

Outcomes for customers

Supplier Customer

GE: the digital industrial company

16$15B software business by 2020

Organizing for the Opportunity Three Waves of DeploymentGE Factories, GE Customers,

World

Data Drives Productivity Growth

Assets

PeopleProcesses

Reliability Availability Operational Cost Operational Risk

Quality Throughput Waste / Rework Lead Time

Decisions Engagement Cycle Time Turnover

Three WavesGE Factories, GE Customers,

World

Digital Application in Oil & GasIntelligent Pipeline

Digital Industry Solutions

Cloud Technology InfrastructurePredix connects industrial assets to the cloud and to each other

Cloud Foundry

Assets Analytics Data AccessAuthorizationOperations

Data Infrastructure

The Predix Cloud

OperationsOptimization

UI / MobileApplications

Connectivity Services Solutions

End-to-End Security

Edge Analytics Engine

Industrial Assets

BusinessOptimization

AssetPerformance Management

(APM)

EdgeAnalytics

PredixMachine

EnterpriseSystems

Predix Applications Portfolio Future Investments

Qualit

y

Control

Automati

on

Brilliant Factory

Developing algorithms to deliver customer outcomes that drive

productivityAdvanced Analytics & Data Science

+

Machine Learning & Artificial Intelligence

+

Digital Twin & Cloud Edge Computing

Research DomainsUnderlying Tech Investments

Three WavesGE Factories, GE Customers,

WorldWe are Platform People

Our First Killer AppAsset Performance Management (APM)

Foundational application for industrial asset productivity

Get ConnectedMACHINE & EQUIPMENT

HEALTH

SecurelyConnectEquipment

HighProbabilityof Detection

Data-RichActionableInsights

Get Insights RELIABILITYMANAGEMENT

ConfidenceAround BestOutcomes

IdentifyEmergingProblems

Collaboration

Get OptimizedMAINTENANCEOPTIMIZATION

BalancePerformance& Reliability

OptimizeMaintenance

MaintenanceStrategy

No unplanned downtime

operating costs & risk

Longer asset life

Value-based pricing … win/win for GE & customers

Three WavesGE Factories, GE Customers,

WorldWe are Asset Geeks. We are Analytics Geeks

Cultivating New Entrepreneurship

BSquare

ThetaRay

Nurego

Intel

InfoSys

Toshiba

SoftBank

Vodafone

AT&T

FogHorn

Cisco

TCS

Pivotal

ANSYS

Azuqua

Genpact

Plataine

SparkBeyond

FPT

China Telecom

PitneyBowes

Predix

Industrial Internet

Consortium

IGATE

Accenture

Creating a marketplace for apps. Bringing together developers and users

Opening Predix Infrastructure forLower Cost App Development(by 3rd Party Developers)

OPEN INNOVATION ECOSYSTEM

Three WavesGE Factories, GE Customers,

World

Pollux

Some use cases and customer value

First Global APMLNG Application

8000 Parameters BeingMonitored. Plan to scaleimpact from 442 Assets to 2300 (all trains)

50 to 600 assets across 11 plants to provide actionable warnings of impending equipment failure

Connect 650 Wells to Predix APM

Store, Connect and Visualizewell data to glean Insights

Transforming operational maintenance spend with advanced data analytics

Never a Better Time to CollaborateIndustrial Internet and Public Private Partnerships

Policy reform for connectivitydata access & broadband

infrastructure

Private Sector Partnerships Entrepreneurial Tech Talent

Success Factors & Comparative Advantage Productivity Growth

25

The Digital Industrial CompanyThank You

Microgrids Grid Modernization Agriculture

Improved infrastructure through Industrial Internet ApplicationsOpportunity to Leapfrog

Water-Energy-Food NexusSolar Costs Down by

~65%IIoT can enable

efficient remote operation of

microgrids

One way Centralized System

To Bi-Directional Grid Platform

IIoT can balance Decentralized Production

& Optimization of Fuel

Resources

More control over Natural factors

Better asset utilization for higher crop yields

28

Industry Challenges

RetiringWorkforce Big Data

Meters, PMU, …Mission Critical

Communication Cyber-Security

EnvironmentPublic Safety

Storm Restoration GHG

New ElectricalEquipment

(FACTS, HVDC, …)

SustainabilityRenewable Deployment & CO2 free energy New

Generation Mix

System ScalabilityFrom energy cluster to

large Interconnected Grids

System DynamicsOperating near to True real

Time Limits

IT Architecture& Services

Control Room

Business Model Change

New regulation

Nuclear AnomalyMoisture Carryover (MCO) has negative effects to worker health and plant operating costs.  Effectively mitigating the problem is a current priority utilities and reactor vendors around the world.

Theta Ray

Power MicroServices - Predix Marketplace

Valve MonitoringWoodward has incorporated decades of experience controlling engines and turbines into its suite of software products and tools that assist in more predictive maintenance decisions and analytics. 

Thetaray

31

23%

10%

TECH INDUSTRIAL

Tech Dominates Value$280B (+50%)

42% (+8X)

RETAIL MEDIA

Consumers Winning

4%

1.4%

‘91-’10 ’11-’15

Industrial Productivity

% S&P VALUE INVESTMENT

BUT

DECLINING

• Industrials have not benefitted from internet investments• Industrial Internet changes the game … “Power of 1%” in a $225

billion market• Value of operational insight > connectivity

IT IS INDUSTRIAL’S TURN

’80s’90s

’00s

TodayBig Iron

Repair Technology

Contractual Services

Digital Industrial

+ Partners+ Field engineers

+ Advanced repairs+ Part upgrades

+Risk sharing+Monitoring &

diagnostics

+Analytics-enabled uptime

+Software-enhanced output/performance

+Remote inspections

Backlog

$226B

CustomerOutcomes

TechnologyApplication

Our services have evolved

Becoming a Digital Industrial Company

36GE Digital

GE’s Digital Transformation Story

While transformation is complex, focusing on 5 key areas will drive future success

Source: World Economic Forum

Operating Model and Capabilitie

s

Data and Connected

Infrastructure

Partner Ecosystem

Culture Change

Incentives & Pricing

1

2

3

4

5

New Business Model – Transformation Maturity

Becoming a Digital Industrial Company

38GE Digital

Tools for Transformation

GE as an example for Industrial Internet at work

Becoming a Digital Industrial Company

40GE Digital

What is a Digital Industrial?

Becoming a Digital Industrial Company

41GE Digital

At its core, a digital industrial company uses data and analytics to create "digital twins" of its key processes and physical assets, which serves as the digital foundation.

This foundation enables the company to run a "digital thread" through the design, build, and service functions – creating a virtuous loop of continuous improvements.

Digital industrial companies use data and analytics to grow their top line via new data-driven offerings and outcome-based business models. .

Digital Twin

Digital Thread

Operational Agility & Business Model Innovation Business model innovation runs through operations.

42

APM covers > 75 % of total failures in Power PlantNumber of Failure Modes Coverage

Unplanned Downtime Coverage

65% of the average unplanned hours per unit have moderate to high analytic

coverage

Over

all

Cov

erag

e

APM covers > 65 % of most important failures resulting in greatest downtime

0%

50%

MediumHigh LowPlant GT ST Gen System Condensing HRSG

Industrial Imperative: Redefine the Game

Industrial productivity Meets the Digital Twin

4%

1991 – 2010

1%

2011 – 2015

+Physics

Analytics

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