For global businesses, little changes can mean a lot. For instance, a 1 percent fuel savings across a global airline fleet would save that airline $30 billion over 15 years. If railroads were 1 percent more efficient, they’d save $27 billion over the same period.
Such figures aren’t merely academic. The industrial internet, the prime mechanism for such potential windfalls, could add as much as $15 trillion to the world economy by 2030, according to a 2015 GE report. While much of that comes from new business opportunities, a large portion is from projected savings wrought by maximizing resources.
The two are linked. As venture capitalist Vinod Khosla noted in a 2012 blog post, some 500 million-plus affluent people enjoy an “energy and resource rich” lifestyle, but 5 billion others do not. Resource efficiency and innovation are the only ways to bridge that gap, according to Khosla.
The industrial internet, which collects data from physical manufacturing components, can analyze such information to find the most efficient methods for resource allocation. The result is less waste and a greener manufacturing industry.
Boosting efficiency
Aviation presents a good example of how the industrial internet helps wring efficiency from big iron industries.
There have always been sensors in aircraft engines, but now that data can be processed in real time. Dave Bartlett, chief technology officer for GE Aviation, has said that many engines put out as much as 5,000 data points per second during a flight.
With software on the aircraft and on the ground, the engines can be fine-tuned for fuel efficiency by analyzing factors such as engine performance, power consumption and temperature. That data can be compared to a flight plan to find discrepancies between the flight and what was expected. Since fuel can account for as much as 50 percent of total operating costs, a small change in fuel efficiency can have an outsized effect.
In addition to fully harnessing natural resources, data can be tracked and analyzed to avoid waste, accidents and premature wear and tear. Predictive maintenance of assets can cut maintenance costs up to 30 percent and eliminate breakdowns up to 70 percent, according to GE estimates.
New manufacturing techniques like 3D printing may also prompt the use of different, more Earth-friendly production materials, said Derek Leitzke, GE product manager. “The sustainability of products like plastic can really be changed with 3D printing,” he said. “The products can be generated from something like corn, for instance, that won’t populate the landfills of the future.”
More data is needed
Public sentiment has shifted in support of eco-friendly initiatives in recent years. At the same time, making do with less would seem to be the guiding operating principle for U.S.-based manufacturers. A PricewaterhouseCoopers report released in April found that C-level executives in the manufacturing industry expect a 27 percent slowdown in their growth over the next 12 months. That’s driven in part by China’s economic slowdown, but also by a stronger U.S. dollar and a slower world economy.
Despite that dismal economic view, few companies are taking full advantage of industrial internet-led efficiencies. Christina Waters, the Canadian oil and gas software leader at GE Oil and Gas, has said that roughly 23 percent of global machine-generated data is considered useful, but only 0.5 percent is being analyzed.
Jay Kim, chief strategy officer at APX, said one reason is that companies are skittish about integrating data from mobile devices and wearables, among other new accoutrements. “Wearables actually make it worse,” he said. “By the nature of these devices, they have the capacity to capture tremendous amounts of data, so there’s IT complexity.” Kim said that for IT departments, new sources of data like that require another layer of data security. The lack of a clear strategy is another obstacle, said Neil Bonner, technical lead, global partners for Zebra Technologies. “Collecting data for data’s sake doesn’t work,” he said.
With so much potential savings on the line, manufacturers will need to find a data strategy that does work.
Todd Wasserman has been writing professionally for over 20 years and was most recently Mashable’s Business Editor. From 1999-2010, he covered the advertising and marketing industry for Brandweek, and became editor-in-chief in 2007. He wrote for Computer Retail Week and various dailys, and freelanced for The New York Times, Business 2.0, The Hollywood Reporter and Inc., among others. He has appeared on CNN, NPR, Fox Business and BBC America.