IBM Predictive Analytics System Averts Supply-Chain Disruptions

By Darryl K. Taft  |  Posted 2013-03-22

IBM Predictive Analytics System Averts Supply-Chain Disruptions

IBM has announced new business consulting services and software aimed at helping decision makers predict and prevent damaging supply-chain disruptions.

The Predictive Asset Optimization solution, which features IBM's predictive analytics software and business consulting services, harnesses big data from instrumented assets and identifies irregularities in the manufacturing process, spots product irregularities and forecasts a range of asset performance risks before a problem arises.

Essentially, the solution leverages big data to uncover manufacturing and distribution risks and intervene before any asset disruptions might occur.

Operating, maintaining and managing assets throughout their lifecycle are major expenses, made even more critical by the frequency of unpredicted machine failures. Asset downtime, especially, if unplanned, is a multimillion-dollar issue for organizations, and the related unscheduled maintenance costs can range from three to 10 times the cost of scheduled maintenance, IBM said.

"The world is entering a new era of smart—where decisions will be based on facts, data and increasingly on the ability to apply analytics to massive data sets and extract very precise business insights," Fred Balboni, senior partner, Big Data Analytics, IBM Global Business Services, said in a statement. "Companies realize they have a new opportunity to capitalize on big data to address some of the intractable issues of the past, drive new levels of business efficiency and create new levels of value for their customers. Our data shows us that businesses that are applying analytics to structured and unstructured data are outperforming their competitors in every industry."

Armed with facts on equipment performance, organizations across a range of industries will anticipate potential failures in their manufacturing systems, supply chains and distribution networks before something goes wrong—and improve operational efficiency as well as customer satisfaction with proactive responses that prevent or minimize potential issues, IBM said.

According to engineering estimates, the U.S. will need to spend $2.2 trillion over the next five years just to bring national infrastructures up-to-date. This includes improvements to roads, bridges, water supply, sewers, electrical grids, telecommunications and more. Understanding the data about those systems, and generated by those systems, has never been more urgent.

The new capabilities in the Predictive Asset Optimization solution broaden IBM's capabilities and portfolio of IBM Signature Solutions, that take the power of predictive analytics to new levels of impact, company officials said.

This new integrated solution analyzes big data from multiple static and streaming sources to make informed decisions by generating predictive statistical models to forecast equipment failure conditions and create alerts.  The alerts are then displayed on an employee or manager's tablet, smart phone or browser with recommended corrective actions that should be taken through interactive tools that perform root-cause analytics and process improvements.

This new offering is intended to help clients in the automotive, electronics, aerospace, defense, manufacturing, mining, transportation, telecommunications, and energy and utilities industries.

IBM cited the example of Cambridge, Ontario, where the city's Transportation and Public Works Department found itself less able to complete inspections and preventive maintenance because its resources were increasingly being used to respond to emergency repair calls. The city established a division devoted to asset management, and with the help of IBM analytics, they are evolving from a break-fix mode of operation, moving toward more proactive, industry-based practices to boost the quality of city services and address infrastructure sustainability.

IBM Predictive Analytics System Averts Supply-Chain Disruptions

IBM also offered the example of one of its auto manufacturer customers that was looking to improve its production quality. With IBM analytics, the auto manufacturer was able to use real-time data to monitor production quality and more quickly identify and resolve issues. As a result, the company reduced the rate of defects in the production of cylinder heads by 50 percent in 16 weeks and increased customer satisfaction.

Also, another global manufacturing company was looking to more quickly detect part defects, IBM said. Through IBM analytics, the company implemented an early-detection model and is now saving $130 million on warranty costs per year.

And, IBM said, a regional utility company that needed to maintain an aging infrastructure implemented IBM predictive analytics technology into its supply-chain processes and can now detect potential problems before they occur. Additionally, the utility company has seen 20 percent productivity gains for service trucks and up to 20 percent reduction of fuel costs due to fewer truck rolls, IBM said.

"Analytics technology gives us valuable insight into trends and what we can expect in the future," Michael Hausser, director of asset management and supporting services for the Transportation and Public Works Department of the City of Cambridge, said in a statement. "We were heading toward a point where reliability of service would be reduced, and we'd be beyond our resource capacity to re-actively resolve issues in a timely manner. We are in transition to be more proactive and gain efficiencies in day-to-day maintenance management activities."

The Predictive Asset Optimization solution is implemented by IBM business consultants, supported by applications management services capabilities, and cloud offerings. These capabilities are supported by IBM's big data platform, which includes Hadoop, stream computing, data warehouse, and information integration and governance capabilities, along with visualization and discovery, application development, systems management and industry accelerators.

To date, the IBM big data platform has been adopted by more than 100 business partners, bringing a new class of analytics solutions to market and extending the reach of IBM analytics offerings for clients.

Moreover, the new solution will be one of the first capabilities offered to clients at the new Advanced Analytics Center in Columbus, Ohio. Credit-qualified clients can take advantage of financing for services solutions and zero-percent loans for IBM software with IBM Global Financing.

IBM Signature Solutions are a portfolio of outcome-based analytic offerings that include fraud-detection, financial-optimization and customer next-best action solutions. They are built by IBM's team of researchers, software developers and business consultants.

These new capabilities are part of IBM's larger focus on big data and analytics that spans hardware, software, services and research. IBM has completed more than 30,000 analytics client engagements and projects $20 billion in business analytics and big data revenue by 2015.

IBM has established a deep portfolio of analytics solutions, deploys 9,000 business analytics consultants and 400 researchers, and has acquired more than 30 companies since 2005 to build targeted expertise in this area. Big Blue has established a global network of nine IBM Client Centers for Smarter Analytics and goes to market with more than 27,000 IBM business partners.

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