19% vs. 1%. This is the productivity gains of the consumer sector vs. the industrial sector over the last five years, respectively. Clearly industrials have hit a wall. Here are the top five reasons why, and more importantly, what you can do about it.
- Lean initiatives are tapped-out. Decades of Six Sigma and Lean practices have squeeze waste and cost out of production processes to the point where there’s nothing left to squeeze. Customers are now searching for where the next wave of productivity will come from.
- 3%: the amount of data utilized in traditional industrial control systems. At a time when accessing and utilizing data from industrial systems is a key differentiator in industrial production, legacy systems severely limit customers’ ability to dynamically adapt to changing business conditions. Today’s rigid and often-times outdated systems do not allow for remote monitoring or control, requiring the organization’s team to be “on-site” to effectively manage the assets.
- Pedal to the Metal Pace of Technology. Technology innovation is blowing past the traditional control system upgrade cycles leaving existing systems and those who manage them twisting in the wind. Customers struggle to stay ahead of competition and train existing team members on the new skills and tech required to win.
- Constant Competitive Pressure. Cutting risk and total cost of ownership has never been more important in today’s slow growth and volatile global market. This need is matched only by the imperative to maximize asset performance in order to find new markets or grow their existing customer base to boost revenue.
- Fear of Getting Hacked. Cyber security is the #1 challenge customers report when it comes to implementing an Industrial Internet or Big Data analytics strategy. As more systems and assets come online, and a new “data breach” is announced almost daily in the media, companies are extremely cautious about the security of their networks and plants.
To smash through the Industrial Productivity Wall, industry must access and harness the most valuable natural resource they have: their data.
Smashing Through the Industrial Productivity Wall
The answer to this issue lies in accessing and harnessing the most valuable natural resource our customers have: their data. Machine data is growing twice as fast as other data and our customers know it. According to Morgan Stanley Research:
- 70% of industrial companies believe it’s important to adopt an Industrial Internet of Things strategy in the next 5 years, and
- 80% of industrial companies indicate big data analytics is the top, or in the top 3, priorities for their company.
Why? Because digitizing and utilizing this data is the way to smash through the industrial productivity wall and boost performance and revenue.
Looking at the energy industry alone, digitizing the energy mix with Predix offers a 20% potential increase in performance across the GE customer base. To make these gains a reality, the industrial world needs to catch up to the consumer world, specifically as it applies to apps.
As was discussed in The Emerging Industrial App Economy, the consumer market for apps is huge, but we believe industrial app economy that is now emerging will dwarf the consumer app market. This is because industrial apps will leverage a massive installed base of physical assets across sectors that act as the engines of global economic growth: energy, healthcare, transportation.
To learn more, check out how GE Digital can help you get started today.