Market Trends

The Emerging Industrial Internet and Its Impact on Fleet Management

August 2, 2013

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The “Industrial Internet,” a term coined by GE, refers to the integration of a variety of complex pieces of machinery, such as planes, locomotives, and vehicle fleets, with networked sensors and software. The Industrial Internet, as opposed to the consumer Internet, draws together fields, such as machine learning, Big Data, the Internet, and machine-to-machine communications, to collect data from machines, analyze it in real time, and use it to adjust operations. GE believes this convergence of machine connectivity remotely generating actionable data via the Industrial Internet will change the way we work, ushering in a new era of innovation and change.

The convergence of a variety of global industrial systems is being made possible by advancements in computing, analytics, low-cost sensing, and new levels of connectivity permitted by the Internet. These innovations promise to bring greater speed and efficiency to industries as diverse as aviation, rail, power generation, healthcare delivery, and commercial vehicle fleets. To make the Industrial Internet a reality, it requires embedding sensors and other advanced instrumentation in a wide array of machines in a multitude of industries, including the automotive sector, which is already adding connectivity features to new-model vehicles.

Optimizing Transport & Logistical Operations

The Industrial Internet is envisioned to encompass large swaths of the transport sector, including industrial transport fleets and large scale logistical operations. In 2011, the global transportation sector, including land, air, marine, pipelines, telecommunications, and supporting logistics services, represented about 7 percent of all global economic activity.

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Transportation fleets are critical links in the supply and distribution chain associated with manufacturing and energy production. The Industrial Internet will help optimize the timing and the flow of goods. In commercial and public sector fleet operations, there are further opportunities for optimizing operations and assets by eliminating waste, while improving driver productivity, service levels, and safety.

“As a company, GE is known for our analytical ability. Our businesses are working to build and power what we call the Industrial Internet. And, at GE Capital Fleet Services, we’re in a great position to help our customers extract and create value from their data. Imagine what we can learn from the millions of vehicles on the road and all of the data coming out of those vehicles all day long, every single day — on the driver, the route, and the vehicle itself,” said Kristi Webb, president and CEO of GE Capital Fleet Services. “There will be so much data that can be digested, assimilated, and aggregated that it’s going to be able to help companies, not just fleet managers, run their fleets as a work tool much more efficiently and change the way they do business.”

The Industrial Internet, according to GE, is one of its top business priorities. However, GE is not the only company with this vision. Cisco Systems, one of the pioneers in this area, has an “Internet for Everything” strategy that involves creating network capabilities to provide “information flows” across a variety of enterprise domains using devices that communicate with other devices remotely. Cisco estimates that 99.4 percent of physical objects that may one day be part of the “Internet for Everything” are still unconnected. With only about 10 billion out of 1.5 trillion devices currently connected globally, Cisco points out the vast potential to “connect the unconnected.”

Likewise, wireless technology company Qualcomm has various global initiatives for an “Internet for Everything” strategy employing wired and wireless technologies. Similarly, Phillips is offering data-gathering connectivity in both its health care and lighting products. Anticipating these changes, the European Commission, the executive body of the European Union responsible for proposing legislation, is using its CORDIS interactive information portal to develop future governance based on the emerging “Internet for Everything” economy.

Incremental Savings on a Fleet Scale

By 2020, GE estimates the Industrial Internet, through better management of processes and industrial systems, will yield $1.279 trillion in value. If the Industrial Internet achieves just a 1-percent efficiency improvement, then the results could be substantial. For example, in the commercial aviation industry alone, GE says a 1-percent improvement in fuel savings would yield a cost savings of $30 billion over 15 years. It’s tantalizing to speculate how much savings the Industrial Internet could yield in the vehicle fleet management sector.

Using today’s technology, the ability to take cost out of best-in-class fleet operations is reaching a point of diminishing returns. An Industrial Internet or “Internet for Everything” offers the promise to extract incremental savings, hither-to not possible. Isn’t this the foundation of effective fleet management to reduce cost and increase productivity using innovative applications?

Let me know what you think.

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Comments

  1. 1. Steve Kibler [ August 23, 2013 @ 06:55AM ]

    Cutting edge stuff! I had to read this one twice. I'm sitting here at my desk after reading this, recalling my wife's regular admonition: "close your mouth dear." 45 years working of cars and I never envisioned this possibility - wow. AVL/GPS companies all over the world are on "red alert" scrambling to integrate this concept into their technology. Very informative article Mike.

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Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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