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IBM's solution offering for predictive analytics can help companies improve the management and maintenance of their assets as well as their customer installed base.
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2014 IBM Proprietary
Predictive Asset Optimization
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2014 IBM Proprietary
Predictive Asset Optimization
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Agenda
Part 1: Introduction to Predictive Asset Optimization (PAO) ! Smart Products Defined
! What is Predictive Asset Optimization?
Part 2: The Value of Predictive Asset Optimization
! Value Proposition & Benefit Cases
! Case Studies
Part 3: The PAO Solution
! Solution Architecture
! IBM’s PAO-enabling Products & Capabilities
2014 IBM Proprietary
Predictive Asset Optimization
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Predictive Analytics SMEs
Paul Brody VP & Partner - Electronics Global Industry Leader
Leonard Lee Associate Partner Electronics CoC
2014 IBM Proprietary
Predictive Asset Optimization
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2014 IBM Proprietary
Predictive Asset Optimization
Smart Products – What are they?
Internet of Things Internet of People
Intelligent
Instrumented
Interconnected
Usage & Interaction
The devices and people are directly talking now…
…generating massive amounts of data.
! Warranty information ! Purchasing history
! User preferences ! Content viewing and
listening histories ! Usage history ! Demographics and
psychographic data ! Point-of-event feedback ! Product and service
feedback via social networking sites
Insight
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2014 IBM Proprietary
Predictive Asset Optimization
Market Trends
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Smart Products – They are changing the world as we know it!
213 549 1,042 1,6592,444
3,440
275600
978
1,402
1,839
2,288
0
1000
2000
3000
4000
5000
6000
7000
2010 2011 2012 2013 2014 2015
Non-Entertainment Install Base (MMs)
Entertainment Install Base (MMs)
Annual Sales
Install Base
0
500
1000
1500
2000
2500
3000
3500
4000
2010 2011 2012 2013 2014 2015
Worldwide IP-Connected Devices – Sales & Install Base
IP-Connected Device Install Base – Devices and Beyond
Source: Gartner, IBM analysis
488M in 2010
5.7Bn in 2015
213M devices in 2010
3.4BN devices in 2015
MM
s of
dev
ices
By 2015 - over 5 billion Internet connected consumer
products to be sold!
IP-connected products will proliferate worldwide
Products will become increasingly self-aware
IP-connected products will generate massive amounts of condition data
Business analytics will provide companies with deep customer insight
2014 IBM Proprietary
Predictive Asset Optimization
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As the number of smart products grows, companies are under increasing pressure to evolve their business focus from being product-centric to product + service minded.
Business Strategy & Model
Smart Devices
Connected Devices
Analytics
Big Data
Competitive Opportunities
Trends & Technologies
2014 IBM Proprietary
Predictive Asset Optimization
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The combination of condition data gathered from connected, smart products and predictive analytics is creating new opportunities for electronics companies to drive product and service innovations.
Big data: unstructured, semi-structured and structured
Review & rating Click-through Feedbacks via pads/phones
Sales records Consumer master data
Product master data
Monitoring & maintenance
logs
Big data: unstructured, semi-structured and structured
Online data Offline data Connected data
Data Types
Social media� Call center records�
B2C$e&commerce$
Forum,$Microblog,$Facebook…$
ERP$ CRM$ Connected$devices$
Data sources Sensors$
User 360 Product 360 • Demographic • Geographic
• Socialgraphic • Behavioral
• Psychological
• R&D • Production
• Transactional • In-use
• Maintenance
Indexed information
Voice of Customer
(VoC)
Targeted Marketing &
Sales Optimization
Preventive Maintenance
R&D Marketing and Sales After Sales Service
Front Office Applications
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Predictive Asset Optimization
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Predictive Asset Optimization (PAO) finds synergy between Product Engineering and Predictive Analytics that enables companies to create new services around their products.
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What if you could accurately predict which characteristics tend to lead to a greater amount or frequency of failures?
What if, when an asset is scheduled for maintenance, you could predict what parts are likely to fail in the near future?
What if you could identify the characteristics that tend to increase ownership cost and downtime over the life of a system?
What if you could replace those parts that have not yet failed and avoid further unscheduled downtime?
What if you could quickly mine the thousands of logs that describe the maintenance performed on a system and determine what important observations are being logged by the maintenance team?
2014 IBM Proprietary
Predictive Asset Optimization
• Use a predefined lifetime for replacement
• Frequent unexpected failures leading to customers’ frustration
• Adaptively raise alert based on the actual condition of the product
• Precise condition monitoring is technically challenging in general
PREDICTIVE ASSET OPTIMIZATION 1. Anomaly detection: How to classify the
present condition into good and bad
2. Change-point detection: How to recognize change-points of the system
Predictive Asset Optimization enables the transition from static maintenance models to dynamic, condition-based maintenance models.
Time-Based Maintenance
Condition-Based Maintenance
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2014 IBM Proprietary
Predictive Asset Optimization
Sense and Measure Quality
Metrics
Monitor & Track Critical Information
Identify and Share Critical
Issues
Measure & Decide on
Actions
Propose Corrective Action
& Collaborate
Implement Corrective
Action
Models, Metrics, Algorithms
& Techniques
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Reducing maintenance & warranty costs while improving
product quality starts with a streamlined approach
" Integration of business data sources " Sensing of abnormal behavior " Providing visibility on dashboards " Analysis of leading and lagging
indicators " Correlation/Clustering of failure
information " Prediction models on emerging issues " Collaborative decision-making " Delivery of corrective measures
Predictive Asset Optimization analyzes data from multiple sources and provides recommended actions, enabling informed decisions.
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2014 IBM Proprietary
Predictive Asset Optimization
Group cases that exhibit similar characteristics.
Which parts tend to fail most often? At what rate do they fail?
Predict or Classify behavior & characteristics.
What are the characteristics of parts that perform well versus parts that fail often?
What events occur together?
Given a series of part failures, which parts are likely to fail in the future?
Associate Classify
Cluster
Data Mining
Data Mining & Predictive Modeling are the core of PAO.
Modelling unearths insights not visible to the naked eye & helps dispel myths that may have settled in over time.
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2014 IBM Proprietary
Predictive Asset Optimization
Optimization is the final piece to the Predictive Asset Optimization process.
• Once the issue is identified, what is the next best course of action?
• Optimization helps the business make complex decisions and trade-offs.
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2014 IBM Proprietary
Predictive Asset Optimization
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2014 IBM Proprietary
Predictive Asset Optimization
UK Utility Company
In Production Line • Pro-active detection rate
increased by 90-100% • Sustained 41% reduction
in production incidents and unscheduled downtime
• Reduced liability damage by 30.23% in 2 years
PAO has delivered value to companies that have invested in developing preventative maintenance capabilities for their products and operations.
Japanese Manufacturer
In Field Services • Save $1 million in repair
costs in under 2 weeks • 12-14 times return on
investment in just 4 months
German Auto Manufacturer
In Warranty Services • Proactive identification of
systematic error patterns and their dependencies
• Reduced warranty cases from 1.1 to 0.85 per vehicle
• 5% reduction in warranty cases
• Annual savings of €30m
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2014 IBM Proprietary
Predictive Asset Optimization
! Utilize predictive analytics to identify when equipment or complex engineering assets installed at customer sites are likely to fail
! To predict maintenance needs in order to maximize uptime/in-service time for equipment sold to customers
! Tie to product development to improve designs and overall product quality
! Utilize predictive analytics to identify when internally used production machinery, equipment, and assets are likely to fail or need service
! Perform preventive maintenance in order to maximize production uptime and minimize disruptive, costly unscheduled downtime
! Utilize predictive analytics to identify when goods and equipment sold to customers is likely to fail in order to identify root cause for problem correction
! To proactively address issues to reduce warranty cost and improve customer satisfaction
Predictive Asset Optimization Solution can address business needs of electronics product manufacturers at different points in the lifecycle.
Operation & Maintenance of Complex Engineering Assets
Asset Optimization of Production Lines
Asset Optimization for Field and Service Warranty
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2014 IBM Proprietary
Predictive Asset Optimization
! Utilize predictive analytics to identify when equipment or complex engineering assets installed at customer sites are likely to fail
! To predict maintenance needs in order to maximize uptime/in-service time for equipment sold to customers
! Tie to product development to improve designs and overall product quality
Operations and Maintenance of Complex Engineering Assets
Operation & Maintenance of Complex Engineering Assets
! Customers complain because of downtime due to unscheduled maintenance
! Waste of resources and downtime due to unnecessary maintenance
! High collateral damage expenses due to failures
! Customer complaints due to product failures
! High pressure on SLAs with customers
Challenges Addressed Benefits Delivered
! Reduce machine/appliance/asset downtime due to failure in complex engineering assets
! Improved productivity of maintenance resources
! Avoid costs of machine/appliance/asset failure
! Improved customer satisfaction due to improved service levels
! Improved and more efficient root-cause analysis leading to better designs
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2014 IBM Proprietary
Predictive Asset Optimization
Asset Optimization of Production Lines
! Supporting Manufacturing operations within a Manufacturing Framework
! High costs due to downtime for unscheduled maintenance.
! Waste of resources and downtime due to unnecessary maintenance.
! High collateral damage costs due to failures.
! High levels of MRO inventory.
! Unreliable Maintenance Cost forecasts
Challenges Addressed Benefits Delivered
! Reduce machine/appliance/asset downtime due to (parts) failure resulting in increased yields and through-puts.
! Higher quality finished goods due to reduced production variability.
! Reduced MRO Inventories.
! Reduce cost of machine/appliance/asset failure.
! Reduce the environmental impact of production failures resulting in lower potential regulatory fees.
! Improved cost forecasting
! Improved supply chain predictability through increased reliability
! Utilize predictive analytics to identify when internally used production machinery, equipment, and assets are likely to fail or need service
! Perform preventive maintenance in order to maximize production uptime and minimize disruptive, costly unscheduled downtime
Asset Optimization of Production Lines
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2014 IBM Proprietary
Predictive Asset Optimization
Asset Optimization for Field Service and Warranty
! High services costs due to late product issue identification
! Customer complaints due to product failures
! Product recalls due to late product issue identification
! Bad press because of product issues
! Lost sales because of bad image
! Supply Chain issues because of product issues
! Financial estimates of potential warranty claims
! Structuring warranty terms for the appropriate time frame
Challenges Addressed Benefits Delivered
! Improved customer satisfaction due to improved service levels
! Reduced services costs
! Greater levels of financial transparency
! Understanding part failure timing to set bounds for warranty terms
! Identifying and resolving issues earlier in the product lifecycle process resulting in fewer warranty claims
! Create a continuous feedback loop of previous learning from the reliability modeling process that improves quality and reduces warranty costs
! Utilize predictive analytics to identify when goods and equipment sold to customers is likely to fail in order to identify root cause for problem correction
! To proactively address issues to reduce warranty cost and improve customer satisfaction
Asset Optimization for Field And Service Warranty
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2014 IBM Proprietary
Predictive Asset Optimization
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2014 IBM Proprietary
Predictive Asset Optimization
Business Value
• Reduce the occurrence of device failure under the scope of six-sigma standard by preventive maintenance.
• Greatly lift customer satisfaction, intimacy and loyalty with good after-sales service.
• Help R&D track operation status of launched products, and avoid the next-generation of products from falling into the same problem.
Failure Mode Analysis� Maintenance Strategy Optimization� Anomaly Detection�
Technologies: 1. Survival curve analysis 2. Cox Model 3. Gaussian distribution estimation
Technologies: 1. Non-linear mathematical optimization
model 2. Gradient decent algorithm 3. Branch-and-Cut algorithm
Technologies: 1. Sparse structure learning technique 2. Graphical Gaussian Model 3. IoT-based tech
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Predictive Asset Optimization provides proactive inspection, detection, and correction of incipient failures before they actually occur.
2014 IBM Proprietary
Predictive Asset Optimization
The Predictive Asset Optimization Solution Framework
Financial Data
Performance Log Data
Capture Predict Next Best Action
Analytics
Prescribe
Predictive Analytics Engine
Event Rules Work Flows Models
Data Consolidation Structured & Unstructured
Dashboards
Alerts
Reports & Analysis
Advanced Visual
Features
Visualization & Messaging
In-Store
Mobile
Call-Center
Social Networks
Web Portals
Social Networks
Monitor
Statistical Analytics Decision Management
Business Analytics
Condition/ Sensor Data
Incident Log Data
Environmental Data
Maintenance Log Data
Customer Data
Devices
Business Systems
Data Sources
Analytical Data Store
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2014 IBM Proprietary
Predictive Asset Optimization
Predictive Analytics – The Core of Predictive Asset Management
Statistical Analytics Decision Management Business Analytics
Analytic Data Store
Service Bus/Message Broker
Product Info/ Sensor
Warranty History
Incident Data
Financial Data
Maintenance Logs
Environmental Data
Performance Logs
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2014 IBM Proprietary
Predictive Asset Optimization
IBM offers a comprehensive suite of products and services that can help our clients realize the benefits of Predictive Asset Optimization.
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Predictive Analytics System
Analytics for ‘through the windscreen’ view . Predictive insights improve Management and refine business rules
BI System
For dashboarding from Maintenance Mgt system and for distribution of predictive analytics results
IBM SPSS
IBM Cognos
IBM Maximo
Actionable Insights
Actionable Insights
IBM GBS Enablement
Services Asset Management System
A powerful ‘rear view mirror’ view for Monitoring, Reporting & Managing based on past and very recent events
2014 IBM Proprietary
Predictive Asset Optimization
Business Intelligence Predictive Analytics Optimization Data Consolidation
IBM Research has collaborated with our clients to integrate our products in delivering robust Predictive Asset Optimization capabilities.
Business Analytics Services
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2014 IBM Proprietary
Predictive Asset Optimization
Alg
orith
ms Fram
eworks
ADAM (Analytics Driven Asset Mgmt.)
Anaconda Change Point Logic
IBM Research has also developed a portfolio of analytics and logical frameworks that address a wide range of PAO scenarios.
IBM Compute and Storage Cloud
Water Utilities Solution
ADAM Solutions
Common Cloud Management Platform
Maximo Integration Framework / SAFE / IIF / Infosphere Information Server
Analytics Solution Engines
Web Services APIs
Maximo Metering Sensors CMMS
Rail Operations
Solution
Oil Platform Solution
Electric Utilities Solution
Building Energy Solution
Maintenance Planning
Maintenance Scheduling
Failure Analysis
Usage Analysis
Condition Monitoring
Custom Analytics Engine
ADAM Repository
Anomaly Detection
feature 1
feature 3
feat
ure
2
Outlier Normal
Sensor'data'Change.points'
0'0'0'0'0'0'0'0'0'0'1'0'0'0'0'0'0'0'0'1'0'0'0''...'Label!
0'0'0'0'0'0'1'1'1'1'1'0'0'0'1'1'1'1'1'0'0'0'0''...' ...'
k! k!
Predic9on'intervals'
...'
Label'
Replicate'the'original'data'by'modifying'the'labels'
sensor A
sensor B
sensor C . . .
Noise Reduction
Predictive Asset Optimization
Customer Detected Issue
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2014 IBM Proprietary
Predictive Asset Optimization
The predicted model identified 85 percent of failure states correctly.
Predictive Asset Optimization has delivered results.
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2014 IBM Proprietary
Predictive Asset Optimization
Talent'A"resource"pool"of"highly"talented"analy4c"Subject"Ma9er"Experts"and"Industry"experts"with"predic4ve"asset"op4miza4on"experience""
Industry'Exper1se'Predic4ve"models"for"a"number"of"specific"industry"use"cases"
Accelerators''• PreCconfigured"dashboard"and"visualiza4on"templates"• PreCintegrated"soDware"tools,"with"connectors"to"a"variety"of"asset"management"solu4ons"
Predic1ve'and'Advanced'Analy1cs'An"enhanced"advanced"analy4cs"methodology,"tailored"to"the"needs"of"the"predic4ve"asset/maintenance"space"
Why IBM for Predictive Asset Optimization?
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2014 IBM Proprietary
Predictive Asset Optimization
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