Introduction by Steve Sargent, I'm the CEO of GE here in Australia and New Zealand:
It's terrific to have Jeff Immelt here today and we'll be talking about a broad range of issues but most importantly we're going to be talking about the industrial internet. We're living in a time where we have the convergence of very low cost sensors so ability to remotely sense the performance of large machines, low cost telecommunications to provide distributed data in a real time low cost form. Then be able to drive the behaviour of humans with that data.
We actually think we're on the verge of another wave of productivity based on what we're going to be hearing and seeing in the industrial internet. It's an area where GE is investing an awful lot of money to make all of the large machines that we manufacture even smarter really with a view to help our customers not only optimise the effectiveness of those assets but also the effectiveness of their business overall.
We actually think we're on the verge of another wave of productivity based on what we're going to be hearing and seeing in the industrial internet. It's an area where GE is investing an awful lot of money to make all of the large machines that we manufacture even smarter really with a view to help our customers not only optimise the effectiveness of those assets but also the effectiveness of their business overall. Joining Jeff today will be Geoff Elliott the business editor of The Australian.
A few little facts about GE which are very interesting. It's one of the 12 original companies on the Dow Jones industrial index.
Sales of over $140 billion annually, more than 300,000 employees which is a hell of a payroll. GE Power Equipment creates a quarter of the world's electricity every day and it's been named as one of the world's most admired companies by Fortune Magazine for the past six years. Of course the origins of GE start with Thomas Edison; it all started with the light bulb as we know. GE in Australian, you know, 70 per cent of commercial flights in Australia have GE engines.
That really is going to change the way that I would say the relative productivity of manufacturing bases on a global - in a global arena. So I think that's absolutely critical. The third is the industrial internet which I'll come back to. The fourth is the ability to design products that can be localised so that really takes away the need to have big bomber factories and in their place the ability of companies to localise production and services in a very significant way.
It's terrific to have Jeff Immelt here today and we'll be talking about a broad range of issues but most importantly we're going to be talking about the industrial internet. We're living in a time where we have the convergence of very low cost sensors so ability to remotely sense the performance of large machines, low cost telecommunications to provide distributed data in a real time low cost form. Then be able to drive the behaviour of humans with that data.
We actually think we're on the verge of another wave of productivity based on what we're going to be hearing and seeing in the industrial internet. It's an area where GE is investing an awful lot of money to make all of the large machines that we manufacture even smarter really with a view to help our customers not only optimise the effectiveness of those assets but also the effectiveness of their business overall.
We actually think we're on the verge of another wave of productivity based on what we're going to be hearing and seeing in the industrial internet. It's an area where GE is investing an awful lot of money to make all of the large machines that we manufacture even smarter really with a view to help our customers not only optimise the effectiveness of those assets but also the effectiveness of their business overall. Joining Jeff today will be Geoff Elliott the business editor of The Australian.
A few little facts about GE which are very interesting. It's one of the 12 original companies on the Dow Jones industrial index.
Sales of over $140 billion annually, more than 300,000 employees which is a hell of a payroll. GE Power Equipment creates a quarter of the world's electricity every day and it's been named as one of the world's most admired companies by Fortune Magazine for the past six years. Of course the origins of GE start with Thomas Edison; it all started with the light bulb as we know. GE in Australian, you know, 70 per cent of commercial flights in Australia have GE engines.
Jeff Immelt: let me start with a little bit of context in that one of the things we always try to do is pick one of the big productivity themes of every generation and I'd say GE for a long time has tried to do that. We kind of see in the area today what I would say four or five big productivity themes that we think can help power into the coming decades. Productivity is quite important. It has been the big engine of the US GDP growth for a long time. I would say productivity has slowed in recent years and that's not a good thing.
So I think these can help turbo charge it and let me just go through them Geoff and I'll explain where the industrial internet fits. One big wave that Australia participates in is just this incredible wave of natural gas and unconventional fuels. We see this as really game changing vis-a-vis the US economy, in many ways the global economy. The second thing is there's more engineering and science around manufacturing today than at any time that I can remember.That really is going to change the way that I would say the relative productivity of manufacturing bases on a global - in a global arena. So I think that's absolutely critical. The third is the industrial internet which I'll come back to. The fourth is the ability to design products that can be localised so that really takes away the need to have big bomber factories and in their place the ability of companies to localise production and services in a very significant way.
The industrial internet has really been evolving. I would say many companies are working on it, from Cisco to Verizon, IBM so we're not necessarily first but I think we think it's very important. Social media has been the big driver I would say of the internet and of internet commerce over the previous five or 10 years.
When I talk about industrial internet I mean smart machines. Machines with sensors providing real time data that can be analysed and broad analytics, going into a distributed workplace so that people on the ground around where these assets are provided can make the right decisions to drive performance.
So what are the outcomes for customers? I give you three levels. Starting at the most basic level, no unplanned downtime. So if you say what's a vision that our customers have that we have? Zero unplanned downtime. So we have all the LNG trains fundamentally in Australia vastly are GE technologies. Whether it's out in the western part of Canada or in Queensland where I was yesterday.
We have performance guarantees with our customers that might guarantee 98 per cent uptime or 97 per cent uptime. The difference between 98 per cent uptime and 99 per cent uptime in the range of oil and gas industry is tens of billions of dollars. It's massive, a massive profitability and productivity. So base level, zero unplanned downtime by modelling data, doing prognostics on how [unclear] takes place, things like that.
The next level is optimal asset performance, optimal asset performance. So what does that mean? If we can get one per cent better fuel performance on the entire installed base of GE Commercial Engines globally that's worth $3 billion of profit for airline customers. So I guarantee if you went to Qantas or American Airlines or any of these people they would say $3 billion, I'll take my share, I'll take my dividend out of that. -
We have performance guarantees with our customers that might guarantee 98 per cent uptime or 97 per cent uptime. The difference between 98 per cent uptime and 99 per cent uptime in the range of oil and gas industry is tens of billions of dollars. It's massive, a massive profitability and productivity. So base level, zero unplanned downtime by modelling data, doing prognostics on how [unclear] takes place, things like that.
The next level is optimal asset performance, optimal asset performance. So what does that mean? If we can get one per cent better fuel performance on the entire installed base of GE Commercial Engines globally that's worth $3 billion of profit for airline customers. So I guarantee if you went to Qantas or American Airlines or any of these people they would say $3 billion, I'll take my share, I'll take my dividend out of that. -
So every engine has about 20 sensors on it, probably on mass our engines take a couple of terabytes of data every year. How you position an aircraft to take off in Dubai is different than how you position it for take off in Sydney. If you can find ways to stretch outage cycles and things like that that again is billions of dollars.
So no unplanned downtime, optimal asset performance, and then the third level I'd give you is optimal enterprise performance. So how do you manage all this data where it's not just a GE installed base but you're wiring up with an installed base of complementary assets?
So the Industrial Internet is about domain, it's about smart machines, it's about real-time analytics, it's about modelling performance. Think zero unplanned downtime, optimal asset performance, optimal enterprise performance. Doing those things is the next wave, we think, of productivity and profitability.
Source: theaustralian
