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Kunihiko Iwadare (left end), the founder of NEC, was the first Japanese who worked at Edison Machine Works, the predecessor of GE.

NEC and GE Digital Collaborate to Drive the Digital Transformation

January 31, 2017

Accelerating the Fourth Industrial Revolution

──What challenges faced by industries and society will GE and NEC seek to address by providing systems and services with new value?

I am confident that the value provided by NEC and the value provided by GE will open the door to continuous growth for industries around the world.
Right now, industries in all areas are experiencing a revolution called the Fourth Industrial Revolution. From 1991 to 2010, industrial production around the world grew at an annual pace of 4 percent. This was the result of improving productivity, such as "Six Sigma," "lean manufacturing," and "just-in-time." However, since 2011 the annual growth rate has grown by a mere 1 percent. GE believes that more than 1 trillion dollars of value is produced by improving the world's productivity by just 1 percent. Improving productivity is essential for maintaining and stimulating activities and employment in society. Productivity improvement methods based on new concepts are therefore needed. GE seeks to accelerate the Fourth Industrial Revolution by advancing the digitization of industries with NEC. The alliance of GE and NEC will bring about revolutionary results by dramatically improving productivity 10, 20 percent from 4 percent in the past.

GE and NEC both share a similar outlook on the effects and efficiency gained by expanding IoT and on the size of the IoT market in Japan. Both companies have also reached a similar high level in technological developments in preparing for the coming IoT era. GE and NEC both have a culture of utilizing systems and services in-house to test and refine results and operational methods before offering them to customers. Prior to the partnership, NEC dispatched its engineers to GE's factories, and GE dispatched its engineers to NEC's factories. This established opportunities to present to each company improvement plans by demonstrating the production systems developed and used by each company. As a result, we found that we both have built exceptional systems, and further cemented our trust.

Producing new value by uniting the strengths of NEC and GE

──What strengths will NEC and GE bring to each other through this alliance?

Looking at GE's operational system in detail, I felt I could learn a lot about large-scale systems managed by engineering where hundreds of supply chains span dozens of countries. After customization, NEC's solutions operate through the process of development, implementation, and adjustment, and engineering for the customer. Logistics take place in each of these stages. So this path becomes complex as it spans different countries in a global business environment.
Improving the efficiency of such global logistics has long been a challenge. GE has the solution, and it is incorporated in Predix. We therefore determined that utilizing GE's system would be more efficient in terms of time and costs than developing a system ourselves. By quickly introducing, testing, and refining solutions, we can promptly respond to the demands of globally expanding customers.

GE can further increase the value of Predix, which crystallizes GE's accomplishments in OT, by leveraging NEC's image recognition technology, one of its advanced AI technologies, and its other leading IT systems and services.
Let me explain by using jet engine maintenance as an example. NEC has a world-class image recognition technology called the "Fingerprint of Things authentication technology." By utilizing this technology, a wrong screw can be found instantaneously from several million screws. For example, even a screw shorter than the specification is screwed into the engine, the mistake can be discovered simply from images taken externally of the screw threads. If this technology can be utilized by Predix, screws installed in a jet engine can be inspected with images and parts that need to be replaced can be discovered. Preparing and ordering the replacement can proceed automatically. The impact of integrating these technologies cannot be measured.

After seeing a video introducing NEC's image recognition technologies, GE immediately conceived of ways to utilize these technologies within GE. We anticipate that NEC's technologies will be even more broadly used if GE's knowledge is used in manufacturing sites around the world.

NEC possesses powerful cyber security technologies that protect facilities and industrial systems, including IoT-enhanced factories, from cyber-attacks. Meanwhile, GE acquired Wurldtech in 2014, which has a strong track record in OT security technologies. These technologies protect not just GE products, but customers' production assets connected on the network. GE also applies OT security not just from a product standpoint but also through the evaluation of customers' vulnerabilities. By partnering with NEC, GE can integrate its OT security technologies with NEC's IT cyber security.

The integration of GE's accumulated OT and NEC continuously refined IT will produce advanced IoT solutions. I think this will be the biggest impact of the alliance between the two companies.

Figure 2 Expansion of IoT business by integrating OT accumulated by GE and IT continuously refined by NEC
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