The General Electric Co., or GE, appears to be living up to its legacy of invention and innovation.

For the last couple of years, senior executives of the firm, which was formed following the merger of Edison General Electric Co. (founded by Thomas Alva Edison, the inventor of the light bulb) and Thomson-Houston Co. more than 120 years ago, have been engrossed in transforming the industrial powerhouse into a digital industrial firm—one with expertise across industries like aviation, energy, healthcare and transportation, and powered by software-defined machines and solutions that are connected, responsive and predictive.

“We’re the only company that will have the machines, analytics and operating systems... That’s how we’ll play the Industrial Internet," said Jeffrey Immelt, chairman and chief executive of GE, while addressing investors and analysts at New York’s 30 Rockefeller Plaza on 16 December 2015. GE’s main offices are located at 30 Rockefeller Plaza at the Rockefeller Center.

Much of the digital innovation that Immelt spoke of during his speech is flowing from efforts of engineers and scientists who are housed at the company’s global research centres (GRCs)—a very important one being the John F. Welch Technology Center, Bengaluru, GE’s biggest GRC outside the US.

JFWTC alone houses more than 4,000 engineers and scientists and has filed over 1,000 patent applications. It works closely with the other nine GRCs, which are located in countries such as the US, Germany, China and Brazil, and together form the GE Global Research network, according to Munesh Makhija, managing director of GE India Technology Center and the chief technology officer of GE India, who likens the digital transformation at GE to “a kind of mind and machine confluence".

The healthcare design unit at the JFWTC.
The healthcare design unit at the JFWTC.

“Our mission is really to build the smarts and the analytics that help customers who use these machines to be more predictive and productive," Makhija said.

He expects the India unit to develop about 100 new applications just in analytics in 2016.

GE had an installed base of 10 million sensors and collected 50 million data elements, according to its 2014 annual report.

The numbers would have only increased last year.

GE’s entire innovation, Makhija pointed out, revolves around three pillars: digital or the Industrial Internet of Things, learnings from GE Store that he described as “a pooling of intelligence from all units within GE", and “constraint-driven or reverse innovation (one that is likely to be used first in the developing world before spreading to the industrialized world)".

Consider this. GE, which has traditionally been selling flow meters to oil and gas companies, decided to update its flow meter technology to multiphase ones that lend themselves to continuous monitoring or metering.

Flow meters measure the flow rate of a liquid or gas moving through a pipe.

The upgraded flow meters that are fitted with sensors “give oil companies a digital snapshot of what each well is producing, and thus helps them decide what they want to do with low oil-yielding wells", said Sukla Chandra, general manager, GE Global Research at Bengaluru.

Munesh Makhija, managing director at GE India Technology Center and chief technology officer at GE India.
Munesh Makhija, managing director at GE India Technology Center and chief technology officer at GE India.

GE India has simulated an entire oilfield at the JFWTC campus for this purpose.

The upgraded (three-phase) flow meter and multiple sensors measure and read the quantity of oil (non-flammable), water and air (to substitute natural gas) that is pumped in the tanks. Even if the oil wells are in different locations, GE’s cloud-based big data and analytics platform, Predix, allows a firm to share that digital data across oilfields.

“This is the digital or the Industrial Internet of Things (IIoT) part of the solution," said Makhija.

Some of the sensors that are being used in the upgraded flow meter have “actually been tried in other applications". For example, a sensor that was developed for GE Motors to find faults in their big-sized motors is now being used in the flow meter. “This is part of the GE Store concept: using the learnings from one unit in a different one," Makhija said.

Mariasundaram Antony, general manager of India Engineering operations at GE Power, corroborated how the wind analytics applications, which his unit developed, were “taken and applied to the train-and-rail industry to look for wind patterns along rail networks. The work is being done out of our India unit to cater more to countries like the US, Canada and South Africa where the gusts of wind are much stronger that say in a country like India".

Healthcare is another innovation area for GE. For instance, there are many babies that are born with high levels of bilirubin in blood—a condition known as baby jaundice.

Shyam Rajan, chief technology officer at the India unit of GE Healthcare.
Shyam Rajan, chief technology officer at the India unit of GE Healthcare.

“The condition is not hard to treat," Makhija explained. People in smaller towns and villages in countries like India typically use sunlight which, in many cases, does cure the jaundice but also creates some complications due to exposure to the sun’s rays. Phototherapy, which uses compact fluorescent lamps (CFL), has traditionally been used to treat this condition.

But even where GE donated this equipment to primary care units, they were not being used. When the company executives investigated the reason, they were faced with multiple issues, such as cost, and the fact that these machines need power and a fan to cool the CFLs, according to Shyam Prasad Rajan, chief technology officer at GE Healthcare India.

Besides, primary care units in the country also face dust problems “and we found that the fans were being affected by the dust which, in turn, was causing the bulb to fuse sooner because they would overheat", Rajan said.

It’s here that the GE Store concept helped. Since GE has an LED (light emitting diode) lighting unit, executives from that unit suggested LED bulbs could be used instead of CFLs to solve the problem. “LED phototherapy has become the global standard to treat babies now," Rajan said.

Similarly, ultrasound technology (that uses high-frequency sound waves to examine human organs) and X-ray technologies from GE’s healthcare unit are being used in GE factories to inspect industrial equipment, forgings, castings and pipelines.

According to Vinay Jammu, technology leader at GE Global Research, “Each invention further fuels innovation and application across our industrial sectors with people, services, technology and scale."

S. Raghunath, professor of Corporate Strategy and Policy at the Indian Institute of Management, Bangalore, believes that “it has not been very difficult for GE to attain this transformation as the performance management system in GE has always focused on efficiency, productivity and innovation".

This, however, also entails the retraining of engineers in the digital way of life.

“Initially GE did face issues as most of its engineering and computing talent understood technologies from the last generation. However, its recruitment practices over the past couple of years have undergone a change, and it has been able to attract talent with commensurate knowledge and experience relating to software development and data analytics. It has also been able to attract partners to further its digital transformation goals," said Raghunath.

According to a 21-December blog by Greg Gorbach, vice-president (information-driven manufacturing) at ARC Advisory Group Inc., a growing number of “...engineers will finally begin to understand why the potential for digital transformation with IIoT/I4.0 (Industrial Internet of Things/Industry 4.0) is not the same as what they have been doing with SCADA (Supervisory Control and Data Acquisition) and automation systems for 30 years...Naturally, these engineers recognize and relate to device connectivity and control aspects of IIoT, but software, scalability, analytics, and the possibility to reinvent business processes are what will really drive the uptake of technology and the coming digital transformation".

Gorbach, in the blog, also argues that terms like the Industrial Internet of Things, Industrial Internet, or Internet of Everything “aren’t ideal because they put people in mind of some limited technology and network-focused aspect of the new industrial paradigm".

Digital Transformation, on the other hand, works because it “reflects what ARC hears from end users who tell us that they can no longer continue to run their business with old technologies, processes, and business models, that things must change, even though they don’t know where to start".

Incidentally, GE competes with firms like Siemens AG, which also boasts of an innovator and inventor Ernst Werner Siemens as its founder. Siemens, which has similar lines of businesses, has been touting terms like Digital Transformation and Industrial Internet of Things.

GE’s competitors also include Emerson Electric Co., the ABB Group, Honeywell International Inc. and Schneider Electric SE.

IIoT, acknowledges Gorbach, provides manufacturers with “a huge first mover advantage both for condition monitoring/uptime and obtaining operating data to improve the product design".

But how to measure the return on investment (RoI) from digital initiatives? “The way to measure RoI on digital investment is to carefully consider the question as to whether replacing bits for atoms is having a business impact. Has the transformation enhanced the customer’s operating performance and has it guaranteed outcomes can be a good measure," said Raghunath.

“Business divisions in GE have not been averse to digital investment, as customer engagement has become far more complex than before. Customers expect solution development that requires integration of technology, analytics and connectivity from GE with the client’s database. The practice of crowdsourcing for innovation has helped GE to select, fund and build new products and strengthen relationships with suppliers, as they experiment with product launches", Raghunath added.

Makhija agreed “the whole digital transformation is all about outcomes ultimately, and not about just the technology".

“It’s a kind of journey. That’s how we learn and that’s how we kind of build our own credibility in this space," he said.

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