Confidential. Not to be copied, distributed, or reproduced without prior approval. © 2017 Baker Hughes, a GE company, LLC - All rights reserved.
APM: Driving value with the Digital Twin
September 18-20, 2017
Mark Wise Senior Director, GED Applications Strategy
© 2017 Baker Hughes, a GE company, LLC - All rights reserved.
Confidential. Not to be copied, reproduced, or distributed
without prior approval.
Safe Harbor
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This document contains "forward-looking statements" – that is,
statements related to future events that by their nature address
matters that are, to different degrees, uncertain. For details on
the uncertainties that may cause our actual future results to be
materially different than those expressed in our forward-looking
statements, see
http://www.ge.com/investor-relations/disclaimer-caution-
concerning-forwardlooking-statements as well as our annual
reports on Form 10-K and quarterly reports on Form 10-Q. We do
not undertake to update our forward-looking statements. This
document also includes certain forward-looking projected
financial information that is based on current estimates and
forecasts. Actual results could differ materially. to total risk-
weighted assets.]
NON-GAAP FINANCIAL MEASURES:
In this document, we sometimes use information derived from consolidated financial data but not presented in our financial
statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered
“non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. These non-GAAP financial measures
supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. The reasons we use these non-
GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are posted to the
investor relations section of our website at www.ge.com. [We use non-GAAP financial measures including the following:
• Operating earnings and EPS, which is earnings from continuing operations excluding non-service-related pension costs of our
principal pension plans.
• GE Industrial operating & Verticals earnings and EPS, which is operating earnings of our industrial businesses and the GE Capital
businesses that we expect to retain.
• GE Industrial & Verticals revenues, which is revenue of our industrial businesses and the GE Capital businesses that we
expect to retain.
• Industrial segment organic revenue, which is the sum of revenue from all of our industrial segments less the effects of
acquisitions/dispositions and currency exchange.
• Industrial segment organic operating profit, which is the sum of segment profit from all of our industrial segments less the effects
of acquisitions/dispositions and currency exchange.
• Industrial cash flows from operating activities (Industrial CFOA), which is GE’s cash flow from operating activities excluding
dividends received from GE Capital.
• Capital ending net investment (ENI), excluding liquidity, which is a measure we use to measure the size of our Capital segment.
• GE Capital Tier 1 Common ratio estimate is a ratio of equity
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Introduction to GE Digital
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Advancing the horizontal and vertical
September 28, 2017 4
™
$6 B USD
Confidential. Not to be copied, distributed, or reproduced without prior approval.
GED APM growth initiatives
September 28, 2017 5
Confidential. Not to be copied, distributed, or reproduced without prior approval.
APM and currentmarket conditions
Confidential. Not to be copied, distributed, or reproduced without prior approval.
APM market overview | industry landscape
September 28, 2017 7
Strategicinnovation
Top 7 industries cover 65% of total market of $7.8 B USD in 2017
Total Addressable Market (TAM)
Drivers and Industry Challenges
• Healthy top line, but with pressures on bottom line — need profitability enabler
• Assets are aging
• Regulations are increasing and tightening
• Operational uncertainty
• Process variability
Oil &Gas Power Gen Chemical Machinery Mining Aero Pulp & Paper
$1,890 $1,440 $ 5 7 0 $ 2 8 0 $ 3 5 2 $293 $ 2 6 7
1,360
1,053
783
570
529
387 352293 280 267 239 233 231 216 212
189 169117 104 104
65 38
2017
2018
2019
Numbersin chart–
2017 TAM
$MM
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Oil and gas industry challenges
September 28, 2017 8
Strategicinnovation
60%Cite maintenance and
reliability as a top priority
70%Decline in oil price
since June 2014
8
50%Of workforce to retire in the
next 5 to 10 years. Knowledge & experience
not being transferred
49%Estimated increase in EH&S spending among global E&P
companies
~$10,000/hrfor a 2000 hp natural gas
compression stationincrease in inventory, labor costs, delayed
delivery, and reduced profitability
5-10%3-5%of lost production in
oil and gas
10xthe cost for unplanned
events vs. planned maintenance in process
industries
Potential Value to the Industry =
~$1 trillion USDFor Digital
Transformation
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High data volume and velocity — and will increase
September 28, 2017 9
Upstream
• Drilling data 0.3 GB / well / day
• Wireline data 5 GB / well / day
• Fiber optic data 0.1 GB / well / day
• ESP monitoring 0.4 GB / well / day
• Seismic data 100 GB / survey
Hundreds to tens of thousands of assets per site
Industrial data requires a fundamentally different approach than transactional data
Midstream
• Process data 4 GB / plant / day
• Atmospheric data 0.1 GB / plant / day
• Pipeline inspection 1.5 TB / 600 KM
Downstream
• Process data 6 GB / plant / day
• Operational data 8 GB / plant / year
• Vibration data 7.5 GB / year / customer
Inspections
• Ultrasound: Tubes 1.2 TB / 8 hours
• Corrosion monitor 1 GB / site / year
ERP systems Predix
Data from industrial assets will dwarf data in ERP system
• ~10-100x more volume
• ~100-1000x more velocity
ERP Systems
• Transactional data
• Logistics reports
• Maintenance logs
• FSE reports
• Inventory reports
Confidential. Not to be copied, distributed, or reproduced without prior approval.
GE Digital APM: Single Enterprise Application
Fragmented, discrete solutions lead to data storage and workflow silos
GE defragments point solutions
September 28, 2017 10
10
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Markets built on a model
September 28, 2017 11
ERP – built on financial model
$41.69 B USD market by 20201 $123 B USD market by 20213$48.5 B USD market by 20202
CRM – built on the customer model lloT – built on the asset model
By 2025 IIoT expected to deliver
$8.6 trillion USDin value on an annual basis
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September 28, 2017 12September 28, 2017 12
Confidential. Not to be copied, distributed, or reproduced without prior approval.
This Industrial Expertise Uniquely Positions GE to Deliver on the IIoT Promise
Design179,396 patentsgranted
Build450+
factories in 45 countries
Connect$1 trillion USD +
In assets continuously
monitored
Operate1/3 world’s electricity is
generated withGE technology
ServiceMonitor and Maintain
70% of theworld’s LNG isunder a BHGE
service contract
Confidential. Not to be copied, distributed, or reproduced without prior approval.
13
BHGE Digital Product Portfolio Architecture
Cost Output Response TimeAzure AWS GE Private Cloud
Digital Twin Framework
Machine andEquipment Health
Compliance and Integrity Management
Asset Strategy Optimization
Reliability Management
Asset Performance Management(APM)
APM Shared ComponentsCase Mgmt, Knowledge Mgmt, Alarm, Asset Mgmt, Condition
Monitoring, SmartSignal, Visualization, and More
Predictive Corrosion
Management (PCM)
BHGE Digital Other
Products* (LNG, Refinery, etc)
IntelliStream™
SaaS Applications
SaaS Applications
BHGE Oil and Gas DigitalProducts
OT Sys
PLM Sys
ERP Sys
IaaS
PaaS
* New products under development by BHGE Digital
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GE Digital APM solution map
September 28, 2017 14
• Achieve less unplanned downtime
by predicting equipment issues
before they occur.
• Ensure asset integrity and
compliance by monitoring
changing risk conditions.
• Optimize across availability,
reliability, risk, and costs
through intelligent asset
strategies.
• Predictive diagnostics
• Case and collaboration management
• Knowledge management
• Root cause analysis
• Reliability analysis
• Hazard analysis
• Safety lifecycle management
• Risk based inspection
• Inspection management
• Thickness monitoring
• Management of change
• Reliability centered maintenance
• Failure mode and effects analysis
• Strategy management
• Strategy library
• Lifecycle cost analysis
• Financial and risk simulation
Anytime, anywhere, unified view of your assets’ current state and health.Machine & Equipment Health
Reliability ManagementCompliance & Integrity
Management Asset Strategy Optimization
• Connectivity • Data management• EAM integration
• Condition monitoring • Data analysis and visualization• Criticality analysis
• Event management • Recommendation management• Reliability benchmarking
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GE APM – continuous improvement framework
September 28, 2017 15
Strategy
RiskOperations and
maintenance
Analyticsand action
Change strategy
Drive work /repair
ReliabilityManagement
Compliance and Integrity Management
Asset strategy Optimization
Machine and Equipment Health
Re-evaluate risk
Criticality failure modes
Damage mechanisms Optimize plan
Connect / collect• Sensor data / alerts /
events• Inspection / work
history events
1. Identify criticality of assets
2. Identify asset failure modes / degradation mechanisms
3. Build, manage and optimize strategies
4. Integrate / execute strategies and collectperformance data
5. Monitor asset health through condition and predictive methods
6. Drive recommendations and strategy / risk re-evaluations
7. Ensure APM governance and measure program effectiveness
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Business benefits
September 28, 2017 16
Confidential. Not to be copied, distributed, or reproduced without prior approval.
2-6%
Increasedavailability
5-10%
Inventory cost
reduction
10-40%
Reduction in reactive
maintenance
3-40%
HSEincident
reduction
5-25%
Gain inemployee
productivity
5-25%
Reduction in IT totalcost of
ownership
GE is the only APM solution providing end-to-end value
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Recent study on APM expectations….
September 28, 2017 17
17
• Operating companies can expect to reap huge benefits from APM
• Implementing APM requires significant time and effort to implement new work processes, enabling technology, and training employees
Impact of unplanned downtime on productionSource: ARC Survey of Senior Executives and Engineering, Operations, and Maintenance Managers in Oil and Gas)
Expected benefits of APM
Improved safety
Percent of respondents
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Digital Twinspowered by APM
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Digital Twin
September 28, 2017 19
Confidential. Not to be copied, distributed, or reproduced without prior approval.
defines a digital twin as:
“A dynamic software model of a physical thing or system that relies on sensor data to understand its state, respond to changes, improve operations and add value.”
“Digital twins are becoming a business imperative, covering the entire lifecycle of an asset … and forming the foundation for connected products and services. Companies that fail to respond will be left behind.”
© 2017 General Electric Company - All rights reserved
Digital Twin’s at GE
Drive Business Outcomes
Per Asset
Continuously Learns
Scalable
Adaptable
1
2
3
4
5
Digital Twin are digital representations of industrial assets and processes combining data and knowledge of assets and processes with intelligence in the form of analytics, models, rules, or additional code to drive a specific outcome.
Physical Asset Digital TwinA Learning Digital Model
Confidential. Not to be copied, distributed, or reproduced without prior approval.
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Digital Twin Blueprints
September 28, 2017 21
• Applied by asset class
• Leveraged within APM for specific, individual assets
• Contain pre-defined:
• Failure modes – Known set of failure modes from most comprehensive library on the market of how equipment fails
• Strategies – Optimized set of recommendations by asset class
• Analytics – Predictive and diagnostic analytics catch and identify failure modes early
• Health indicators – Distinct measures define and manage asset conditions
• Metrics – Asset-level KPIs to measure performance
• Life cycle costing – Tools to model historical and operational datasets to determine true asset lifecycle costs and performance expectations
DIGITAL TWIN
BLUEPRINT
ASSET STRATEGY
FAILURE MODES
LIFE CYCLECOSTS
METRICSKPIS
HEALTHINDICATORS
ANALYTICS
Confidential. Not to be copied, distributed, or reproduced without prior approval.
If APM is the engine, then digitaltwins are the fuel
September 28, 2017 22
Strategy
RiskOperations and
maintenance
Analyticsand action
Change strategy
Drive work /repair
Reliabilitymanagement
Compliance and integrity management
Asset strategy optimization
Machine and equipment health
DIGITAL TWIN
BLUEPRINT
HEALTHINDICATORS
ANALYTICS
ASSET STRATEGY
FAILURE MODES
LIFE CYCLECOSTS
METRICSKPIS
ANALYTICS
ASSET STRATEGY
FAILURE MODES
LIFE CYCLECOSTS
METRICSKPIS
HEALTHINDICATORS
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 23
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Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 24
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Confidential. Not to be copied, distributed, or reproduced without prior approval.
ASSET STRATEGY
FAILURE MODES
LIFE CYCLECOSTS
METRICSKPIS
HEALTHINDICATORS
ANALYTICS
September 28, 2017 25
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 26
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Confidential. Not to be copied, distributed, or reproduced without prior approval.
ASSET STRATEGY
FAILURE MODES
LIFE CYCLECOSTS
METRICSKPIS
HEALTHINDICATORS
ANALYTICS
September 28, 2017 27
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 28
Confidential. Not to be copied, distributed, or reproduced without prior approval.
DIGITAL DRILL RIG
Confidential. Not to be copied, distributed, or reproduced without prior approval.
KPIs to Data: Digital Twin Blueprints
APM KPI Industry Equipment Type Failure ModesAnomaly
Detection Analytics Health Indicators
Reliability
Availability
Maintenance Costs
Driven by
Pump
Motor
Heat Exchanger
…
Bearing Wear
• Fatigue….• …..
…
Policies
SmartSignal
Physics Based, Engineering & Machine Learning
Temperature, Pressure, Vibration..
Compliance, Operational Risk..
Other….
Analysis of Failure Modes by Equipment Type Analytics Catalog Data Catalog
September 28, 2017 29
Oil & Gas
Renewables
Power
Transportation
Marine
Mechanical Seal
• Leaks• …..
Risk
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Analytics Orchestration: Customer Use Case
Layering multiple algorithms helps create better outcomes
Condenser issue detected3 hours prior to event
Legacy Analytics: Good
111/1711/1611/1511/1411/1311/1211/1111/1011/911/811/7
2
Improved Analytics: Better
Condenser issue detectedone day earlier
3
APM Analytics:
Next Generation
Condenser issue detected10 days earlier
Condenser Issue Detected 10 days earlier
+
+
September 28, 2017 30
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 31
Value of the Digital Twin
Move up the PF curve… .. and stay there
Time
Ma
ch
ine
/pro
ce
ss e
ffe
cti
ve
ne
ss
Proactive maintenance PredictiveOptimize maintenance Break/fix
Functional failure Equipment offline (Trip)Full functionality
Machines and processes are running normally
Early signs of failure exist in data Alarms / Alerts
Equipment or
processes are not producing
Predictive
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Digital Twin Solutions Today
September 28, 2017 32
WEEKS MONTHS YEARS
Time to Value
Industry Count of SSAnalytics
Chemicals 10
Defense 5
Oil & Gas 48
Power 114
Transportation 21
Mining 28
TOTALS 234
• 60 analytics for asset coverage
• 30 Digital Twin physics and engineering models
• 100 Digital Twin machine learning methods
• 111 granted patents deliver differential value
• Asset Strategy Library ~ 700 Equip Types
• 50,000 Damage Mechanisms / Failure Modes
• 321 Inspection Strategies
• Standard inspection checklists
Growing Analytics Catalogue
Strategy Libraries
Confidential. Not to be copied, distributed, or reproduced without prior approval.
Fixed Equipment Example
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 34
Risk Assessment and Degradation Mechanisms
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 35
Risk Assessment and Degradation Mechanisms
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 36
Asset Strategy
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 37
Asset Strategy
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 38
Analytics
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 39
Analytics
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 40
Health Indicators
Confidential. Not to be copied, distributed, or reproduced without prior approval.
September 28, 2017 41
KPIs Metrics – Risk (without plan)
Confidential. Not to be copied, distributed, or reproduced without prior approval.
KPIs Metrics – Risk (with plan)