When machines meet analytics

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KUALA LUMPUR: The danger of a big company is in not trying things because committing thousands of people — and a few hundred million dollars — to a new venture can be risky, but such is the nature of business, said General Electric Co (GE) chairman and chief executive officer (CEO) Jeffrey R Immelt.

Immelt was referring to none other than GE’s foray into the analytics space, in which it had cumulatively invested over US$500 million (RM1.63 billion). But the bold move is starting to pay off: the segment has generated over US$1 billion in revenue in this year alone.

And the fruit of the investment has come to Malaysian shores.

On Tuesday, GE launched its iCentre in Malaysia, one of the three oil and gas (O&G) analytics and diagnostics centres globally that will take the massive amounts of operational data that has been complied, to be analysed by its “Predictivity” software.

With over 11 billion hours of operational data collected from advanced proprietary sensors that GE has developed and installed in its machines around the world, the company can better predict when its machines — gas turbines and other rotating machines like compressors — are likely to break down.

“The dream is zero unplanned outages. It doesn’t sound like much, but this is huge for any CEO in the O&G industry,” said Immelt.

Unplanned outages can be very disruptive and costly to businesses, especially when dealing in large pieces of machinery that are vital to operations. Replacing damaged parts can be expensive and industries like O&G can burn money while waiting for spare parts.

“Machines these days are basically computers. All we did was to collect the data and analyse and improve performance,” said Immelt.

Analytics is a huge advantage to GE and its clients, given the fact that it has some US$200 billion in backlog on long-term service agreements for its machines.

GE’s customers in Malaysia include Petroliam Nasional Bhd as well as AirAsia Bhd.

“Incremental improvements are able to create huge economic value. If we are able to improve fuel efficiency by 1% on all installed GE jet engines, it’d be worth US$2 billion to US$3 billion of profit to our customers annually. Small changes can have big impacts,” said Immelt.

To GE, one of the largest manufacturers of industrial products in the world, incorporating the sensors into its machines and analysing the data collected was a “natural progression” to improve its products and services, said Immelt.

“We do machines great. The question is whether we can do analytics better than analytic companies do machines. I think the answer is yes.”

This article first appeared in The Edge Financial Daily, on October 23, 2014.