I went to GE’s event titled Minds + Machines 14 in New York City. An event focused on the Industrial Internet. At the crux of the event was a discussion of the impact greater analytics and smarter machines are having, the keys to the Industrial Internet. Some of the discussion points put this phenomenon in perspective. That today for $0.08 you can purchase 1 million transistors…not too long ago for that nickel and 3 pennies you could only get one transistor, and when computing started it cost 5 times that amount. It is now cheap enough to bring intelligence to the majority of machines and “things” that are in our world.
There were some great customer stories, such as the City of San Diego being able to add intelligence to their 6,500 streetlights and allow them to more efficiently manage outages. Rather than the mayor’s office getting a call from an angry voter, the lights can inform maintenance of needed repairs. CSX highlighted their ability to do better asset management and therefore ensure they reduce “unplanned” outages of their locomotives.
AirAsia spoke about using the data that they can gather through their partnership with GE to better optimize the routes their airplanes fly, and even when they turn on and off their engines when the planes are taxing. All this translates to tremendous savings in fuel consumption, a key savings when you consider 50% of their costs are in fuel purchases. Here are three take-aways from an educational day:
- GE – the software company for the Industrial Internet. During the conference and in a press release that went out at the same time, GE announced that its Predix business was generating $1b in sales and was on pace to have 1500 dedicated employees in the Bay Area by end of year. Impressive numbers for your refrigerator manufacturer. But this should come as no surprise. As GE chairman Jeff Immelt said in his opening remarks – “You probably went to bed last night thinking you were a manufacturing company and woke up this morning to realizing your are a software and analytics company.” Every business is now about software, data and analytics. There are no longer big pieces of dumb metal and plastic. The jet engines, locomotives, MRI machines, wind turbines and other products of our industrial age are now smart and getting smarter. The data these devices, coupled with software and analytics are what our businesses are about.
- It is about the people stupid. An underlying theme, and one that I am fully in agreement, is that we cannot ignore the human element in all this. On the contrary, we need to even more sensitive to the role of people. In the industrial revolution, people were treated and looked at with cold calculation. Child labor was used because kids had smaller hands and could perform tasks adults did not have the dexterity to perform. Labor was necessary to make the coalmines in England or the Model T assembly line in Detroit hum along. But the rights of that labor were ignored if not exploited, which gave to the rise of unions and even revolution and bloodshed. Fast forward to today and what some are seeing as another industrial revolution – this one powered by the Industrial Internet. Similar to the industrial revolution of last millennium, this work force will also undergo some changes. Unlike the last industrial revolution, this work force is empowered. Companies need to think about how the Industrial Internet will impact jobs – some lost and some gained. There is also a tremendous amount of change management that will come into play. By being able to measure such a wide swath of processes, companies will and have already uncovered inefficiencies and will look to implement process changes. But that requires your labor force to adjust some of their “tried and true” ways of doing things. AirAsia gave an example of having to work with pilots, many who had over 20 years flying time, on how they were doing their jobs. The data was a great measuring stick as to adding efficiencies. But remember the saying “you can’t teach and old dog new tricks.” It will take more than better data and analytics to get that dog to roll over.
- Finally, there is a hope…maybe a dream…that by adding this level of intelligence and analytics to the system that we can get closer to achieving a globally optimized supply chain. I can see that vision. But I am not sure I can fully buy into it. Not that I am a pessimist. On the surface the ability to put sensors all over the world…literally…can allow us to dream of this becoming a reality. Having all those sensors communicate with one another. And overlaying the intelligence into the system means we can finally have a supply chain where we have perfect information in real time. Of course there is much more to an optimized global supply chain than just having perfect data. Having better, real time access to the mountains of information the Industrial Internet promises, is a step towards a better supply chain. But to assume that all is limiting an optimized supply chain is this data is too simplistic.
GE’s Minds + Machine 14 was a great reminder of the changing digital world around us. Not only are our devices more connected, but also we are able to connect an ever-increasing amount of products. We are only beginning to see the impact that has on our businesses and supply chains. As the technology continues to mature, we need to watch how the people side of the equation evolves.