IBM Predictive Maintenance & Quality (PMQ) Overview

2013 IBM Corporation

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Todays session is scheduled to run for an hour and will be recorded

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Setting the Stage.

Why this is Important to Know

PMQ is an important product from IBM that is made up of many components. Participants will leave with an understanding of the value of the solution along with what is required to build sales & services practices around the offering.

Speaking to you today

David Zyla Partner Technical Enablement Specialist Business Analytics Division, IBM Software Group

Anuj Marfatia Program Director Business Analytics Division, IBM Software Group

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Agenda
Background & Value

Case Studies Solution Stack

Positioning ROI

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Success of PMQ will be based on Team selling

What is it?
A cross-SWG, packaged solution with its own PID Utilizes technologies from SPSS, Cognos, DB2, Websphere, Infosphere, and integration to Maximo

Why should I care?

Market size of $8B Key industry targets: Manufacturing, E&U, and Chem & Petro
Direct integration to Maximo

$325,000 avg. deal size for software only; minimum 1:1 software to services ratio PMQ + Maximo is a key differentiator
Partners are a key channel Several upcoming focused events in 2013 (Chicago-Oct.9, Cleveland-Oct. 15, CalgaryOct.22, Toronto-Oct.2?, IOD (Vegas)-Nov.3-7)

What are the primary use cases?

Primary use cases
Predict asset failure Determine anomalistic characteristics that lead to poor product or component quality
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Background & Value

Organizations forced to reduce operational costs to remain competitive

Impacts manufacturers & organizations managing field level assets Challenge: organizations reacting and not predicting

What is the impact when a manufacturer encounters a machine failure during a production run? a heavy machinery operator performs unscheduled repair on a bucket wheel excavator? a water main breaks? A transformer fails causing a power outage in an electrical grid?

Aberdeen study - #1 risk to operations was failure of critical physical assets

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Assets are more than just manufacturing machinery

1. Manufacturing process Manufacturing machinery utilized to create a product

2. Field-level assets Consumer Appliances

o Washers, dryers, hot water heaters, furnaces, HVAC Food, drinks, cigarettes, electrical products, videos, money Planes, trains, ships, tanks, buses, passenger automobiles, fleets, electric vehicles, gas powered autos, motorcycles, snow mobiles, lift trucks

Vending Machines
o o

Connected Transportation
Heavy Equipment Machinery
o Earth movers, mining equipment, cranes, wind/gas turbines, nuclear plants, solar panel arrays, oil drills, oil rigs
Electrical grids, water/sewage infrastructure, IT systems, telecom lines/cables, security systems

Networks
o

Buildings
o Property, real estate, universities, stadiums, corporate offices, headquarters, field offices

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Predictive Maintenance is the next step towards Maintenance Excellence

Maintenance Maturity Model Managing budget costs while improving reliability and safety
Conditionbased Maintenance Preventive Maintenance
(based on manufacturers schedules, time, or operational observations) (based on monitoring to assess condition of assets)

Predictive Maintenance
(based on models of evolution of the condition of assets)

Reactive Maintenance
(machine fails, then fix)

Predictive Maintenance uses analytics to model foreseeable evolutions of the characteristics of individual systems or assets

Source: Gartner

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New Offering! IBM Predictive Maintenance and Quality

Reduce operational costs Improve asset productivity Increase process efficiency

TODAY! Q1 2013
Packaged, cross-IBM, software product (Analytics with real-time data integration)

Accelerate Time-to-Value
Real-time capabilities Big data, predictive, and advanced analytics Quick and accurate decisioning Maximo integration Open architecture Business intelligence

2012

Singular software capabilities (SPSS, Cognos)

Customizable, cross-IBM, software and services solution (Analytics with real-time data integration)

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Predictive Maintenance and Quality delivers significant value where both the impact of failure and the probability of failure are high
Severity Factors Health and Safety Issues Asset Damage / Repair Costs Loss of Revenue

Greatest need for Predictive Asset Optimization

Lower need for Predictive Asset Optimization

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IBM Predictive Maintenance and Quality reduces operational costs, improves asset productivity and increases process efficiency
Monitor, maintain and optimize assets for better availability, utilization and performance
Predict asset failure to optimize quality and supply chain processes

Remove guesswork from the decision-making process

Combined with out-of-box models, dashboards, reports and source connectors

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Predictive Maintenance and Quality generates business value for organizations

Business Use Case
Predict Asset Failure/Extend Life
Determine failure based on usage and wear characteristics
Utilize individual component and/or environmental information Estimate and extend component life Increase return on assets

Business Value

Identify conditions that lead to high failure

Optimize maintenance, inventory and resource schedules

Predict Part Quality

Detect anomalies within process Compare parts against master
Conduct in-depth root cause analysis

Improve quality and reduce recalls Reduce time to identify issues

Improve customer service

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Where are my opportunities?

PMQ Categories Industry
Manufacturing Consumer Appliances Vending Machines Connected Transportation
Heavy Equipment Machinery

Networks

Buildings

Key Opportunities by Region

-Eastern Europe -South Korea -India -Brazil -Russia -Middle East -Western Europe -Sweden - Brazil -Venezuela -Nigeria -Nordics

Automotive

- North America - Japan -Western Europe

-North America -Brazil -China -Middle East -Russia - North America

Aerospace and Defense Chemical & Petroleum Consumer Packaged Goods Electronics

X X X X X X

X X

X X X X X X X X

-US -Japan -China -Japan -South Korea - US

-Western Europe -US -Australia -Western Europe -Brazil

-South Korea -Western Europe -Germany -China

Energy & Utilities Mining / Construction

-India -China
-North America -China -South Africa -Sweden

Government

X X

X X X

-North America
-US -Japan -Canada -China

-Western Europe -Japan

-India -Denmark -Switzerland -Germany

Travel & Transportation

-China

-India

Telco

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Case Studies Predict Asset Failure / Life

Enterprise Asset Mgmt

A city government wanted to boost city services and address infrastructure sustainability IBM combines asset management innovations, predictive modeling, and geospatial and business analytics to help the city improve planning, operations and services

Environment
A global petroleum company wanted to increase asset utilization and reliability in a remote environment IBM helps predict where and when ice presents a threat to existing drilling platforms

Extend Life
A regional utility company needed to maintain an aging infrastructure IBM delivered an industryspecific solution to detect potential problems before they occur

Outcomes:
Produces real-time visualization of ice floe positions and trajectory cone forecasts Predictions determine whether to move platforms providing cost savings

Outcomes:

Outcomes:

Anticipates saving $100,000 per year in staff time spent on capital plan forecasting Expects to reduce costs related to project coordination, operations and capital expenditures

Improved asset maintenance identification 20% productivity gains for service trucks Up to 20% reduction of fuel costs due to fewer truck rolls

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Case Studies Predict Quality

Global auto manufacturer Global manufacturing company Not for profit company

Predict Production Quality

A vehicle manufacturer wanted to improve its production quality IBMs solution helped use real-time data to monitor the production quality and more quickly identify and resolve issues

Predict Part Quality

A global manufacturing company wanted to more quickly detect part defects IBM implemented an early detection model to detect part defects earlier and respond in the most optimal way

Predict Part Quality: Anomalies

A not-for-profit marine society dedicated to ensuring safety and pollution
IBM helps the company detect anomalies in vessel monitoring systems even under dynamic changes of ocean conditions

Outcomes:
Reduced the defect rate by 50% in 16 weeks in the production of cylinder heads Increased customer satisfaction

Outcomes:
Significant reduction of the cost for detection rule construction (~1/10) Significant increase of detection coverage (~ x 2-3) Reduction of overall maintenance cost (demonstrated at least 10%)

Outcomes:
Early identification and mitigation of enterprise component and quality issues Provide insight to the health and probability of failure for in-service equipment maximizing uptime

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Solution Stack
End User Reports, Dashboards, Drill Downs

Advanced analytics powered by IBM SPSS and Cognos

Predictive Analytics

Decision Management Analytic Datastore

Business Intelligence

Data integration provided by Websphere Message Broker and Infosphere Master Data Management Collaborative Edition, which feeds a pre-built, DB2-based data schema
Process Integration with Maximo automatic work order generation Includes data models, message flows, reports, dashboards, business rules, adapters, and KPIs

(Pre-built data schema for storing quality, select machine and prod data, configuration)

Integration Bus
(Message Broker)

Telematics, Manufacturing Execution Systems, Legacy Databases, Distributed Control Systems

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High volume streaming data

Enterprise Asset Management Systems

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Predictive Maintenance and Quality analyzes data from multiple sources and provides recommended actions, enabling informed decisions
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Conduct Root Cause Analysis

Generate Predictive & Statistical Models

Predictive Maintenance and Quality

Display Alerts and Recommended Actions

Collect & Integrate Data

Structured, Unstructured, Streaming

Data agnostic User-friendly model creation Interactive dashboards Quickly make decisions

Act upon Insights

Asset Performance
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Asset Maintenance Process Integration

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Predictive Maintenance and Quality provides several key features

Real-time capabilities

Big Data, Predictive and Advanced Analytics

Quick and Accurate Decisioning

Maximo integration

Open Architecture

Business Intelligence
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Accelerated Time-to-Value
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Maximo Integration Overview

IBM PMQ contains adapters for IBM Maximo, which allow data integration
IBM PMQ uses existing Maximo infrastructure for data integration

Maximo Upstream Module (Master Data Loading) IBM PMQ can consume master data residing in IBM Maximo IBM PMQ mirrors the asset data that is managed in IBM Maximo. An automated process can be designed to synchronize data between IBM PMQ and IBM Maximo Data that comes from IBM Maximo must be updated and maintained in IBM Maximo. It is not possible for changes that are made in IBM PMQ to be propagated back to IBM Maximo Maximo Downstream Module (Work Order Creation) IBM PMQ generates recommended actions which can be passed to IBM Maximo IBM PMQ can be customized to import IBM Maximo work orders as events to record activities such as inspections and repairs.

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Positioning
Targeting and Qualifying the right customer with the right problems
Operating high cost, high value assets OR sufficient quantities of lower cost assets with recurring failures that could be predicted and prevented Sufficient investment or desire for asset instrumentation and maintenance / asset history to populate models Reasonably mature maintenance processes Primarily enterprise organizations

Pricing based on fixed price (by asset type) and a variable data point price

Not a technology sale

Selling better maintenance outcomes to maintenance professionals We must be very focused on Return on Investment and Operational Improvements

Optimizing all aspects of asset operations, not just predicting failure

Not a technology sale.however

Embedded technology justifies the higher investment and competitive distinction

Leverage the Industrial Internet of intelligent devices, assets, and content/data sources Applying principles of Big Data Analytics to a maintenance setting
Closed Loop Integration with Maximo
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Integrated Rules-Based Decision Making

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Positioning for joint Maximo and Business Analytics value

Maximo Install Base
Helps to justify investment or solidify ROI of Maximo implementation Strengthens overall commitment to value of IBM solution Re-energizes relationships Potentially justifies expansion of Maximo solution into other areas of the business

Maximo and PMQ White Space

Maximo and PMQ together strengthens overall solution in competitive situations PMQ may offer a Trojan horse scenario for competitive take-outs

PMQ can introduce an IBM Maintenance solution into a competitive installation/site

May offer a Trojan Horse scenario for competitive take-outs Business Analytics / PMQ have a LOT of sellers, expanding the potential reach of IBMs Maintenance Solution conversation

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Partner Strategy
Traditional Maximo implementation and resale partners
Critical to expand deployment options beyond IBM Leverage their existing customer relationships Partners want to be able to add more value and differentiated solutions Partners to provide industry focus/customization

Large System Integrators, OEMs and Maintenance Outsourcers

Introduce PMQ to become part of their tool kit Use Maximo and PMQ combined to enable more compelling and cost effective maintenance contracts Enhance profitability of fixed price maintenance outsourcing agreements

Embed PMQ as part maintenance support contracts for manufactured or re-manufactured assets

Skill set required

SPSS Enterprise certification

Partners with expertise in Business Analytics or Maximo will find most value
Software will need to be configured to customers data

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ROI that Organizations are Seeing

Auto manufacturer
Reduction in warranty claims from 1.1 to 0.85 per vehicle 5% reduction in warranty claims Reducing the reject rate within 15 months by 80% by the specific attachment of heating elements and other measures Production loss of 3 days at 2 machines could be prevented in 35 minutes ( 200,000 savings)

Office appliance manufacturer

Increases revenue by USD104.93 million in the first year Production up to four times more efficient Lets thousands of employees optimize production line variables to support low-cost, standardized production of high-quality products

HVAC manufacturer
Reduced warranty claim processing times by 20 to 30 percent, increasing internal efficiency and boosting customer satisfaction Enabled the company to identify fraudulent claims prior to payment and minimize financial losses Reduced support personnel required to maintain multiple warranty systems by 5 to 10 percent, eliminating duplicate efforts and lowering costs

Energy provider
Reduced costs by up to 20% by avoiding the need to restart turbines after an outage an expensive process. Saved approximately USD 75,000 in fuel costs per turbine by identifying inefficient fuel usage. Increased the efficiency of maintenance schedules, costs and resources, resulting in fewer outages and higher customer satisfaction. Provides early warning of certain types of failure up to 30 hours before they occur, instead of 30 minutes.

Water utilities
36 percent reduction in customer calls through increased preventive maintenance and implementation of automated meter reading s Increased percentage of emergency investigations dispatched within 10 minutes from 49 percent to 93 percent Ability to generate reports for regulatory compliance and management review in seconds versus days Significant reduction in asset downtime

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Predictive Maintenance Value

Financial Impact
Improved revenue growth

Value Drivers

Key Performance Indicators

Cost per Ton % improvement / ton % improvement / Hour
Comp replacement cost Comp Life Target Achieved Availability Index % scheduled Maintenance MTBS MTTR Maintenance Ratio

Revenue Growth

Higher Productivity

Tons per Hour

Component Rebuild Cost

Renewal Cost Maintenance

Component Life Mechanical Availability Increased Up Time

Improved Cost position

Shareholder Value

Operating Margin

% scheduled
Mean Time Between Stops Mean Time to Repair

Maintenance cost Labor resources

Parts consumption

Parts Ratio Average Inventory value, major components

Improved Working capital position

Number of Spares
Fixed Asset Fewer Spares TCO Per Spare Infrastructure Inventory

Capital Efficiency
Improved efficiency of capital outlays Reduced Risk

Dedicated Shop space Average Spare Parts / Components Inventory % field repairs Average inventory value Spare Parts / Components Inventory

Fewer Spare Parts / Components

Risk Mitigation

Safety / Compliance

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Resources and Final Thoughts

Sales kit exists on PartnerWorld
Business Analytics/SPSS section or just type in Searchbox

Predictive Maintenance collateral exists on ibm.com

Business Analytics Partner Channel Contacts

BA Software Sales North America
Craig Wacaser craig.wacaser@us.ibm.com BUE Business Partner Solutions and Growth Strategy Brad Jeffers Brad.Jeffers@ca.ibm.com

BUE WW BI/AA Channels Michael Bigenwald mgb@us.ibm.com

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After attending this session, you should have an understanding of

1. the value of PMQ and which organizations would benefit from it 2. which IM and BA components are included in the solution 3. whats required to build sales & services practices around PMQ

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Questions

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Use the Chat Box at lower right of your screen

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Resources
Business Analytics area on PartnerWorld

Business Analytics Web Seminars Business Analytics events

Business Partner Learning Center Demand Generation Programs Demonstration content BA Demomate Interactive Demos

Business Analytics competitive resources Self Paced Virtual Classroom Program for Business Partners
You Pass, We Pay IBM Business Partner Locater Tool IBM Business Partner Communities

Follow us on twitter ibm_ba_partner

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Replays of this session

This session is being recorded and can be downloaded for replay from the the Web Seminar Schedule

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2013 IBM Corporation