Industrial companies need to reconsider their
organisational strategies in a digital context so as to avoid becoming
Jeff Immelt, Chief Executive Officer of General Electric, said the company has
had to reconfigure itself as a digital organisation in preparation for the
expected widespread growth of the industrial internet and its effect on
traditional industrial assets.
Addressing a forum at the Gordon Institute of Business
Science, Immelt explained that industrial companies crave productivity, and the
next wave is to be found in the digital space: “We have to start now.
There is no avoiding it, we must be ready for change,” he said.
Generating efficiencies through the industrial
The industrial internet, or the digitization of
industrial assets such as aircraft and locomotives, incorporates machine
learning and big data technology to encourage productivity and efficiency,
improve supply chain management and enhance quality control.
Immelt estimates the industrial internet as a $100
billion market, equal in size to enterprise IT and consumer IT, which is only
“in its beginning phases.” The industrial internet affords opportunities for
machine-generated data and ways to model that data which haven’t been done
before, he explained.
building blocks of the industrial internet include:
Controls on industrial assets such as aircraft
and locomotives that are able to generate data. This in turn can be
modeled to address fuel performance, mechanical deterioration, emissions
and other parameters in real time.
An operating platform, such as GE’s Industrial
Cloud-Based Platform Predix, which connects industrial equipment, analyses
data and delivers real time insights.
the use of the generated data, an outcomes map can be modeled to promote
efficiencies, resulting in reduced downtime, improved fuel efficiency and
the optimisation of the fleet. This, Immelt explained, is the resultant
information that can make assets and the enterprise work better.
small changes are able to drive outcomes through industrial collaboration,
developing applications in aviation, locomotives and power. Industrial adoption
of the technology is happening at a rapid pace,” Immelt added.
The industrial internet in Africa
the forum, Immelt announced GE’s plan to partner with rail and ports operator
Transnet to apply industrial internet technology to the digitization of
Africa’s transport sector.
Gama, Group Chief Executive of Transnet explained that digitization is very
important to the group: “We are becoming digitally obsessed as we grow into
Africa, and we must build new capabilities or fall by the wayside.”
said Transnet is hoping to unlock Africa’s digital potential through the
partnership and use GE’s digital knowledge to revitalise the broader transport
sector across the continent. The group aims to move transport freight closer to
an on-demand model.
The efficiency gains offered by the industrial
internet have specific application for Africa, where a lack of infrastructure
creates constraint: “It is impossible to diversify the economies of Africa
without better infrastructure, but efficiencies can utilise the same assets to
do more. We have to take the existing assets and make them work harder,” Immelt
Using technology can enable fuel savings, as well as
enhanced scheduling. While these are not incredibly sophisticated gains, they
could amount to billions of dollars in savings.
Immelt explained digitization offers the opportunity to build better trade
zones instantaneously. However, this is not possible without the support of
good public policy, he added.
Gama agreed that regional integration across the
African continent could unlock opportunities and drive trade as the world
entered a phase of anti-globalisation and protectionism. However, trade and
monetary policy consistency, as well as political stability and continuity,
were all critical to unlock investment.
The creation of a free trade area across the entire
continent is essential to Africa’s prosperity, Gama said. High-level
discussions to promote interconnectedness and facilitate trade flows across
borders were ongoing: “Accelerating trade and encouraging partnership,
collaboration and skills sharing, Africa has the ability to leapfrog its
development,” he said.
Immelt, who previously headed up the President’s
Council on Jobs and Competitiveness for the Obama administration, said skills
training would be fundamental to harnessing the full potential of the new
industrial technologies and for job creation in Africa.
“South Africa needs a software community and needs to
attract people who are comfortable bridging the gap between software and hard
assets such as locomotives.” Such skills would define job creation in the
future. If the country can do this, “South Africa has a real chance to be the
incubator of these skills and to lead the way on the continent,” Immelt
Top five points
Industrial companies need to reconsider their
organisational strategies in a digital context so as to prepare for the
widespread growth of the industrial internet.
The industrial internet affords opportunities for
machine-generated data to encourage productivity, efficiency, supply chain
management and quality control.
partnership with rail and ports operator Transnet hopes to digitize and
revitalise Africa’s transport sector using GE’s digital knowledge, resulting
in efficiency gains.
efficiency gains offered by the industrial internet have specific
application for Africa, where a lack of infrastructure creates constraint.
Gama, Group Chief Executive of Transnet said regional integration across
the African continent could unlock opportunities to drive trade.