how to value digitalization

Sentient Science Materials Science Differentiation1. Asset Management for Operators 2. Computational Testing & Reconfiguration for Suppliers

☑ Life Extension☑ Root Causes☑ Predict Earlier

Key Industries Served

WIND ENERGY • 22,000 assets under contract globally

AEROSPACE• Rotorcraft, Fixed Wing, & Defense• (15 Years of R&D)

RAIL• Wheel Rail Interface• New Market for Sentient

Sentient Science is a trusted third party enabling life extension of rotating equipment through a digital platform, connecting operators and suppliers through asset actions that lowers the cost of energy.WindEurope 2017 - How to Value Digitalization

What's New at Sentient Science?

1. New Product: DigitalClone Bearing available beginning of 2018 as part of our strategy to enable suppliers to create their own DigitalClone life models

2. We have Business Value Assessments (BVA) to share on how operators are reducing costs with DigitalClone Live

3. We have 2 digitalization panel sessions at the booth1. Tuesday & Wednesday at 13:00

4. We have a jazz band and party Tuesday night starting at 16:00

5. Do you like scotch? Drop your card to win €400 bottle of scotch

WindEurope 2017 - How to Value Digitalization

What is Digitalization?

The use of digital technologies to change a business model and provide new revenue and value-producing opportunities


DigitalClone® “3D” Watch Lists

3D Watch Lists that List Actions for Every Wind turbine – To Keep Turbines Health and to extend Turbine Life


5+ Years 1-5 Years 0-12 months CMSInsurance reduction Supply Chain

OptimizationUptower

Component Replacement

Highest Cost


A “3D” Watch List ranking fleet-wide main bearing and gearbox assets worst to best

(“what’s not on your watch list?”)



For O&M and Asset Management


For Inventory Planning

For Insurance Reduction


Aligning with Our Operators Business Goals

6.New

Development

• Win new deals

• Competitive PPA biding

• Buy on Life & Price

• Optimize suppler choices

3.Business

Strategy

• Optimal Governance by digitizing wind fleets

• Integration with existing MAXIMO and other IT systems

• Optimize Key Performance Indicators to lower Cost of Energy

• Benchmark performance against industry competitors

1.Operations

Management• Lower the cost of asset operations

• Reduce technical visits due to bundling & false alarms

• Reduce costs from scheduling technician time and

equipment

2.Asset

Management

• 18 month rolling budgets and forecasts

• Avoid downtower rebuilds with increased

uptower replacements

• Reduce mobilization cost by bundling crane

visits

• Avoid downtime with inventory available

5.Risk

Management• Reduce insurance and extended warranty

costs

• Reduce annual gearbox replacements with

preventative O&M recommendations

• Reduce long-term gearbox O&M cost with

“right first time” procurement

• Reduce insurance premium from risk

management

4.Supply

Chain• Improve terms and costs with key suppliers

• Reduce risk of exceeding O&M budgeting

• Reduce inventory storage required to mitigate

failure risk

• Reduce unit cost of gearbox purchases with long-

term agreements

DigitalClone

Life Models

Suppliers

Impact on Cost Reduction

Multi-year inventory forecasts for major and minor correctives based on failure rates

• Better Terms & Conditions with Suppliers

• Reduce variability between suppliers

Reduced inventory and supply carrying costs• less inventory, Just-In-Time, shorter lead times

• Place inventory where and when needed

• Reduce Terms & Conditions based on long term forecasting

Decide whether to Increase or decrease number of suppliers

Work with suppliers and remanufacturing resources to improve fielded products


Customer XXXX

Turbine GE 1.5

Total Units 2748

Year IM/HS ReplacementsPlanetary

Replacements% of Replacements

2016 60 24 3.1

2017 75 30 3.8

2018 85 34 4.3

2019 98 39.2 5.0

Total 318 127.2 16.2

Customer XXXX

Turbine GE 1.5

Total Units 2748

Year GBX Replacements % of GBX Failures

2016 100 3.6

2017 110 4.0

2018 115 4.2

2019 121 4.4

Total 446


Years 5

Assets 1,175 *IncludesOn-Warranty

MW 2,403 *IncludesOn-Warranty

FailureRate 1.0%

TotalSavingsPerDeployment 20,466,364$

TotalFleetDigitalCloneLivePrice: 6,007,000$

ROI 341%

Payback 3.52

# BusinessFunction ValueRealized UnitCost Units Extended

1 AssetManagement CreateRootCauseAnalysisReport $50,000 59.00 2,950,000$

2 AssetManagement EnsureInventoryisAvaliableforChange-Outs 15,616.42$ 59.00 921,369$

3 SupplyChain ReduceUnitCostofGearboxPurchases 15,587.50$ 59.00 919,663$

4 AssetManagement EnsureBudgetisAvaliableforChange-Outs -$ 59.00 -$

5 AssetManagement GearboxLifeExtensionBeforeChange-Out(DamageConfirmed) 9,000.00$ 59.00 531,000$

6 RiskManagement ReducedRiskofFailedInsuranceClaim 20,000.00$ 59.00 1,180,000$

7 SupplyChain AvoidedFutureCostof"RightFirstTime"Replacement 20,900.43$ 59.00 1,233,126$

TOTALFAILUREVALUEFOR5YEARS 7,735,157$

8 RiskManagement FutureGearboxFailuresAvoided $7,246.04 1,116.00 8,086,581$

9 RiskManagement ReducedInsurancePremiumfromRiskManagement $1,000,000 2.00 2,000,000$

10 NewDevelopment CreateProFormaReports $51,000 4 204,000$

11 NewDevelopment IncreasedEnd-of-WarrantyClaims $500,000 4 2,000,000$

TOTALRISKMANAGEMENTVALUEFOR5YEARS 12,290,581$

12 OperationsManagement DukeEnergycanenabletechniciansaretrainedtocollect“BestPractices”dataforfleetoperations(i.eLubricantExcellence.BOM) 18.75 1,175 22,031$

13 OperationsManagement DukeEnergycanimprovequalityandconsistencyoffailurereportingandaction 18.75 1,175 22,031$

14 AssetManagement DukeEnergycanacceleratepreparationofinternalreportingofSiteKPIs 18.75 1,175 22,031$

15 BusinessStrategy DukeEnergycanreceivebenchmarkingdataofKPIsinternallyandinnetwork 18.75 1,175 22,031$

TOTALANCILLARYVALUEFOR5YEARS 440,625$

16 BusinessStrategy DukeEnergycancreatestrategicpartnershipswithsuppliersandotheroperatorstomaximizebuyingpower 10,000$ 1,175 11,750,000$

SavingsperDeployment: 20,466,364$

SavingsperAsset: 17,418$

SavingsperMW: 8,518$

SavingsperMWperYear: 1,704$

DigitalCloneLivePricePerMW: 500$

TotalFleetDigitalCloneLivePrice: 6,007,000$

ROI 341%

AssumptionsSummary

PaybackSummary

Example – Duke Energy 5 years Digitalization Program BVA

Business Drivers for Digitalization


Nextera Energy –Juno Beach, Florida

Business Initiative – Be the Low Cost Provider

Digitalization Strategy – Move from PPM to PHM

Acciona Energy –Pamplona, Spain

Business Initiative - Turbines for Life

Digitalization Strategy - Require Lifing Data from all Suppliers

Duke Energy –Charlotte, North Carolina

Business Initiative – Drive the Cost of Insurance Down

Digitalization Strategy – Involve their Insurance providers

RENK AG Gearboxes –Rheine, Germany

Business Initiative – introduce a new generation journal bearing gearbox for onshore applications

Digitalization Strategy – Test new digital gearboxes in Sentient’s base of 20,000 digital wind turbines

Two sides to the (Digital) Market

EQUIP OPERATORSEND CUSTOMER

SUPPLIERSTier 1-X

Digital BOM

TRUST

Margin

Asset Actions to Extend Turbine Performance

Terms and Conditions that Maintain Margins



Aligning with Our Suppliers Business Goals

6.Aftermarket

Services• Faster Reman of Systems

(Eg: GBX)

• Reduced Downtime of

equipment

3. Procurement and Sourcing Strategy

• Reduced Supply chain Risks

• Reduced Lead Time Variability

• Multi year rolling demand forecasts

• Develop a long term responsive Supply chain

1. Product Lifecycle Management

(PLM) + New Technology Introduction (NTI) • Allow Product lifecycle team to accelerate product time to market

• Field data input from Operator to define product improvement

• Evaluate Competitive trade off studies and sensitivity analysis

• Reduce the order to cash cycle

2. Operator Sales/Marketing

and Success

• Eliminate Operator Sales Representative and

the Cost associated to make a sale

• Define Reason for Lost Sales

• Eliminate Marketing Platform/Campaigns and

costs associated with marketing studies

5.Risk

Management• Evaluate Liability Assessment

• Lower extended warranty costs

• Promote Long Term FSA Extensions

• Serial failure of components under warranty

• RCA Reports

• Improved prediction ability

4.Inventory Optimization

and Production Planning • Multi Year demand forecasts

• Reduced Inventory Carrying/Holding Costs

• Incorporate JIT Production Plan

• Introduce Vendor Managed Inventory Systems

(VMI)

• Better Customer service Levels

DigitalClone

Life Models

Sentient Global Customers

`

AES, Algonquin Power, American Chemical, Boeing, Broadwind, Brookfield Renewable, Capital Power, Castrol, Chemtura, DMDII,

DOE, Duke, Eaton, EBO Group/Aerotorque, GE, Enel Green Power, Exelon, John Deere,

MidAmerican,, NextEra, NRG, NYSERDA, OG&E, Rolls-Royce

Airbus, Acciona, Adwen, DONG Energy, E.On, EDPR,

Energiekontor, Gamesa, Moventas, Rewitec, Senvion, Siemens, Statkraft, Vestas, ZF

Goldwind, Longyuan4117 2

25% Wind Market25% Wind Market

50% Wind Market


Learn More and Meet the Team!

Sentient Presentation Schedule WindEurope 2017

1. Introducing DigitalClone Live

2. Duke Energy Case Study

3. Main Bearing RCA

4. How to Value Digitalization

5. DigitalClone Live Product Update

6. Why Data Science Alone Wont Lower the Cost of Energy

7. Moventas XL Life Extension Program

9. Rewitec Additives to Extend Gearbox Life

10. DigitalClone Bearing Product Release

11. Wind Loads Modeling

12. Data Fusion: Material Science & Data Science

13. Drivetrain Modeling

14. Reducing Costs with Digitalization


how to value digitalization

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