Transcript: Asset Intelligence and Global Supply Chains
Thomas Konditi:
My name is Thomas Konditi. I am the President and CEO of GE's Equipment Services Asset Intelligence Business.
Thomas Knoditi:
Asset Intelligence substantially tries to bring productivity and level of security to transportation of breakthrough the global supply chain. Because we do have this global focus one of the big wins that we have been able to make in the supply chain has been to work with our partners at Wal-Mart, arguable one of the world's largest users of the global supply chain. They selected our Imagination Breakthrough called VeriWise for trailer-tracking for all of their North American Trailer Asset and that's one of the largest fleets of the world in order to see where all the trailers work to see what was going on inside of them and to be able to track all the products and goods as they went from ports to distribution centers into the retail stores. One very simple example you know to illustrate the power of combining this information is imaging that there is a truck that's carrying some freight from say Los Angeles to Chicago and we may know exactly where the truck is because we have this technology. We will also know what the condition of the freight is because we are monitoring things like temperature and pressure and humidity but when you start combining that with say a data feed of traffic along the path and then you also combine a third data feed of fuel prices along that path, you start to be able to provide that driver as well as the fleet manager of that company a comprehensive view of just how to get around the traffic choke point, how fast you are going to be able to get to your destination and hopefully shave some time off and then on top of that know where the cheapest fuel is and then be able to pull that into the equation and hopefully reduce the overall fuel cost which has been our some of the key components of the transportation vector today. So it becomes very powerful, yeah I think you can do a lot of things with just combining information. In the global supply chain people are looking for real time information, they are looking for it to be linked and they are looking for it to be global so that they can avoid stock outs and missing things on the shelves. They can reduce their costs, they can reduce their losses and to some extent they can enhance their security as well as improve compliance with all the different regulatory requirements out there for getting things in and out of countries. The Imagination Breakthrough VeriWise is actually a technology that is very simple. A lot of people kind of use it today. It's based on GPS and it uses the satellite system to transmit information about where all the trailers are and a lot of this technology was developed with our friends over at the Global Research Center led by Dr. Jo Salvo and he is on the line with me now and I will let him talk about how the technology works for our business.
Dr. Joseph Salvo:
Hello Thomas, I am Dr. Jo Salvo. I manage the Pervasive Decisioning Systems Laboratory at the Global Research Center. All types of transportation assets that GE is involved with need this kind of real time data to allow people to manage their supply chain and manage their business operation. Now, even though the description of the technology is quite simple using the GPS Technology which most people aren't familiar with, making it occur on a global basis with many-many different parties and different countries with different standards is quite a challenge and that's where the Global Research Center came in to make sure that the technology was able to be internationalize that it would seamlessly interstage with our customer's IT system. Thomas Konditi: Well Jo, that brings up actually the unique relationship that my business and the Global Research Center and the labs have within this growing market, their exploding market actually. You know our team was focused on assets as part of the equipment services business and you know we weren't technologists. We didn't know everything about whether it's literally rocket science when you are talking about GPS and satellite but the ability to go to a team of very experienced professionals in this space and be able to work together with them I think gave us an enormous advantage both in getting to the market with a product that really works well for the application but also in impressing on our customers just the power of GE and the ability for GE to dig deep within its expertise and bring solutions to their doorsteps. So this is really for me at least has been a tremendous business technology relationship. The real value of a system of asset management is to understand how certain events affect business world. So the asset intelligence business has added features like monitoring, door open and close event, when trailers have stopped for a certain period of time, when they enter or leave a particular place on the earth we call that forming a geofence and automating a lot of the alerts that trigger business activity. So in essence just establishing where an asset is, is just a beginning. All the high value decisions that flow from that are the essence of service that we have enabled using GE Technology.
Thomas Knoditi:
Wal-Mart in our example is actually both a shipper as well as a carrier of freight and when you know we have certainly worked very well with them on the trailer side as we have another 100 customers around the world because we are now in about 6 different countries and expanding into several others but that brings to mind the bigger question of all the other assets and all the other things that transport freight into trucking space. We have certainly done a lot around tracking of freight and trailers. We are expanding into the refrigerated trailer tracking and monitoring market. We are also integrating RFID which is going to become another big game changer in the movement of products and freight. In the rail space we are focused on all sorts of different rail cars from hazardous material tankers and seeing with AR to other types of tank cars and even boxcars that are hauling high value freight. On the container side you know the container world is part of the global supply chain. It's a big part of it and we are collaborating with our sister company and GE Security to bring an added enhancement to not just the productivity but the security side of the container shipments and that has been a, you know that's something that continues to go on and we see a lot of benefit there. We are also working with our sister company, the sensors business that's GE Sensors to bring to bear their domain expertise in producing really great and efficient sensors for things like temperature and pressure, taking it down to the level of a simple tire, monitoring the tire pressure of a trailer, in some cases you know just a change in 10-PSI on a truck trailer can yield as much as one mile per gallon of fuel efficiency, so working together with sensors, working together with our security business to really affect this chain but the growth opportunities are substantial.
Dr. Joseph Salvo:
Well I think the world really needs to find a solution because of the complexity of performing any business activity today requires a transparency in your operation. So even though the different asset classes require different technology, our customers are demanding a visibility through those items and it has to fit the value that we can create by adding these features. So it's a very big challenge to be able to implement this kid of solution.
Thomas Knoditi:
And as you mentioned the information commodity that's almost the starting point for Asset Intelligence, you know we talked about putting hardware and tracking on assets, on containers, on rail cars but what we are really going after is the information and the data that comes off of those different assets.
Dr. Joseph Salvo:
Thomas is constantly challenging me to come up with better and better ways and to create automated decisions that are going to capture value for our customers and the amount of data and information that's going to flow into these systems is just going to continue financially expand so that's caused enormous demand on the architecture of what we call the imagination platform. It will collect all this data from a wide range of sources, some of which are even beyond the board of GE but we are going to collect, correlate, validate and then integrate into incredibly complex decision algorithm, the types of solutions that our customers are demanding to be competitive in a global marketplace. You know one of the things that really has distinguished its space is because of the huge amount of data and information that's involved we have had to come up with really unique ways of visualizing. When you have a fleet manager looking at 10,000 or 20,000 assets or more he can't be looking at individual points. So using state of the art geographical information system we can come up with some very unique points of view that allow people to strategically plan and tactically react to things that are happening in the moment. It is now with young predictable nature of the world marketplace you have to be able to react in almost an instance, the things like rise in field prices or traffic condition or a change in the competitive nature of your business and whoever can change faster and have access to this real time data and the decision to handle it is going to win.
Thomas Knoditi:
Let me illustrate that one with the fact that more and more of our internal consumption within the US as well as in other countries, comes from places outside of their borders and it's real easy when you are shipping something from say Chicago to St. Louis. If you make a mistake with that shipment you know you are 2 or 3 hours away from fixing it. You can order something new and typically get it the same day but if you move that production of that item from Chicago over to you know let's just say Tokyo or to Shanghai you know you make a mistake in shipping something from Shanghai and you are talking about a 6-week to 8-week journey. I know of a company that recently shipped a whole set of electronics that had one faulty chip in it. If that were done in the States you would have been able to probably make that you know redo that shipment in a matter of days if not just a week or so but they basically had to throw away the entire shipment of electronics because it didn't make any sense to send it all the way back there. So the importance of tracking, knowing where things are being more efficient in your global supply chain just increases as we become more and more globally reliant set of economies.
Dr. Joseph Salvo:
Absolutely and I think many people don't realize that the whole area of logistic and material management account for anywhere from 10 to 25% of the total growth in the domestic product of a country. And in developing world the number is close to 25% and in developed world it is close to 10-15%, a huge number. And if you just look at the transportation assets that GE directly controls over a trillion dollars of goods goes through that transportation price line every year. So any kind of improvements in efficiency and risk mitigation really makes big-big improvements on our bottom and top line.
Thomas Knoditi:
When you consider that GE you know supports a trillion dollars of freight moving through the system every year, in addition to the fact that General Electric actually owns almost 3% of all the transportation assets within the global supply chain, you know close to 2 million trucks, trailers, containers, rail cars, intermodal units we have a vested interest in where this is going but we also have I think a great opportunity to affect how the world takes advantage of this technology and all of this innovation and information that's probably about 45 to 50 million different assets moving freight around the world and if we can just get into 5 or 10% of those over the next few years you are easily talking about a billion dollar market then that's just for GE. There is plenty more for other folks out there.
Dr. Joseph Salvo:
Yeah and as you said this is a really global place and who else but GE has the reach of distribution and technology. We have research done all around the world, Bangalore India, Shanghai China, Munich Germany and we can reach and develop technology that fits the marketplace wherever it is in the world and respond faster than anyone else.
Thomas Knoditi:
You can clearly tell that I am excited about this space you know we have got a team that has grown globally as well as in terms of competency and I think the customers who are always number 1 have been very excited about this technology and growing with it so you know I am looking forward to some great things.
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