The tools of the Fourth Industrial Revolution are changing asset management. But data means little without the expertise needed to understand it and maximize its value for customers. In this episode, co-host John Arnold sits down with Doug Hill, vice president of Operations for KBR’s Readiness and Sustainment business, to talk about KBR’s next-generation asset management platform, Asset Ikigai®. Listen along as they discuss how KBR experts use Asset Ikigai to deliver data- and analytics-driven, risk-informed insights for customers, and how the platform figures into an exciting new KBR offering, Supply Chain as a Service.
The tools of the Fourth Industrial Revolution are changing asset management. But data means little without the expertise needed to understand it and maximize its value for customers. In this episode, co-host John Arnold sits down with Doug Hill, vice president of Operations for KBR’s Readiness and Sustainment business, to talk about KBR’s next-generation asset management platform, Asset Ikigai®. Listen along as they discuss how KBR experts use Asset Ikigai to deliver data- and analytics-driven, risk-informed insights for customers, and how the platform figures into an exciting new KBR offering, Supply Chain as a Service.
IN ORBIT
S2 E18
Asset Management Evolved – KBR Asset Ikigai® and Supply Chain as a Service
INTRODUCTION
Lubna Salim
Hello, I'm Lubna.
John Arnold
And I'm John. And this is In Orbit.
Lubna Salim
To our listeners who are new, welcome to this podcast. And to those who have been listening in, welcome back.
John Arnold
Yes, we are thrilled.
Lubna Salim
So, how are you John? And what's up?
John Arnold
Oh, the same old — same old, same old. Everything is exactly the same as always, but I'm happy to be back on this podcast with you. It's lovely to hear your voice. How are you doing?
Lubna Salim
I'm very well. Thank you, John. We have just been back from celebrating a beautiful, beautiful Diwali party at our Gurgaon office.
John Arnold
Oh, wonderful!
Lubna Salim
Yes. Last evening, we had a very nice do and it was quite a lot of fun, because festivities are beginning to set in and there's a nip of winter in the air. So, beautiful times.
John Arnold
Oh, that's wonderful. I'm getting excited because I'll be flying to Houston to be with my larger team there and to also be with a larger KBR team that is helping put on the annual Charity Golf Tournament.
Lubna Salim
Oh, how lovely. That should be a lot of fun. And John, didn't you just have a super fun episode? Didn't you just do this amazing ... not episode, rather I would say a super amazing interview.
John Arnold
Yeah, so, this episode is about a topic that I was somewhat familiar with just because, when you hear the term “asset management,” that is a big part of KBR's business. It's something that we have decades of expertise in helping clients handle. And I had the opportunity to sit down and speak with Doug Hill — who's the vice president of Operations for KBR's Readiness and Sustainment business — to talk about asset management broadly, but more specifically, to talk about something called Asset Ikigai, which is KBR's next-generation asset management framework. And you'll hear in the interview that Doug goes into a lot of detail about how Asset Ikigai uses the tools of the Fourth Industrial Revolution — things like analytics, machine learning, AI, things like that. But I was really interested to hear that, even with all of those next-generation tools, that it really comes down to how you take the information that you're given and use your expertise to guide the customer in making decisions. So, that was really, really interesting. And then the other thing that I thought was really interesting that you'll hear about, is this concept of supply chain as a service.
Lubna Salim
That's right. And I think what intrigued me about this title when you shared was, of course, something that you have also mentioned on your episode, which is the term “ikigai,” and that's also a book I read couple of years back.
John Arnold
Ah!
Lubna Salim
So, we are going to listen ... So we're ... yes, absolutely, absolutely. And you know what the fun part is, John? Both the authors of this book are Spanish and they have been living in Japan, and Japan is also one of our important focus areas in terms of energy transition.
John Arnold
Absolutely.
Lubna Salim
So, you see the orbiting that's happening around?
John Arnold
Most definitely.
Lubna Salim
So, let's just listen to the episode. I can't wait.
John Arnold
Yeah, let's check it out.
TRANSITION
John Arnold
So, today we're going to be discussing something we haven't taken a deep dive on yet on the podcast and that's asset management. And with us to talk about it is Doug Hill. Doug is vice president of Operations for KBR's Readiness and Sustainment business, which is part of KBR Government Solutions United States. And he's responsible for growth initiatives, asset management and supply chain. Doug is going to be telling us about KBR's next generation asset management framework, which is called Asset Ikigai, and how we use it to deliver data- and analytics-driven, risk-informed insights that enable better decision-making and maximize value for our clients. Welcome Doug, and thank you for being with us today.
Doug Hill
Hey, great to be here. Thank you very much for the opportunity.
John Arnold
Yeah, absolutely. So, the term “asset management” covers a lot of ground. It's very general, and it covers physical things like a company's buildings and equipment to intangibles like IP, finances or all the various factors that make up what we refer to as “human capital.” So, for KBR, generally, what are we referring to when we talk about asset management?
Doug Hill
Well, asset management is a service that we offer in readiness and sustainment, where we manage physical assets that are installed in facilities. Or it could be other equipment such as rolling stock, whether it's a track vehicle or a seven-ton truck. And just think about anything that's on wheels and anything that's installed in the facility. So, we maintain and service those assets.
John Arnold:
Excellent. So, we're talking about Asset Ikigai today. I recently read a book, and we were just talking about this a moment ago, which described this Japanese concept of one sense of purpose or reason for living. So, is that where Asset Ikigai gets its name?
Doug Hill
You got it. Now, the fact that you've read a book, you probably know more than I do, but ...
John Arnold
No ...
Doug Hill
... we have branded this, it is service marked for the company and we refer to the term “Asset Ikigai,” we think it's catchy, and yes, it's Japanese meaning of a long happy life with purpose. So, as a branding concept, we're applying that to these assets that we maintain. And I will tell you also just a little bit more about our experience in this area. For over 40 years, we have served government customers and have managed assets, and so really, Asset Ikigai was born from that expertise. And think about this for a second, John, as a company, we manage a quantity of 80,000 assets worth over a billion dollars that are stored in our computerized maintenance management system. So, we have all this data, all this information that we manage for our clients and we'll talk a little bit more about what we can do with that stuff.
John Arnold
Right. That's incredible. An incredible amount of data, I'm sure. So, we talk a lot on the podcast about the tools of the Fourth Industrial Revolution and how they're changing the ways that everyone does business, whether public or private companies, or governments. Have you found that to be true?
Doug Hill
Yeah, absolutely. It's really disruptive, in a good way, because things move so quickly right now with digital tools and how we manage and interpret data. I want to really emphasize as much as the digital aspect and the technologies that it is really about, “How do we manage data and how do we interpret that data and provide information to our customers?” And some of the new digital tools that are out there, that a lot of people really know about — but we'll talk about it here for a second — are just sensors that you install on a piece of equipment that identify the health of the equipment itself. It's the internet of things, the digital twins, the designs if you will, artificial intelligence, machine learning. So all of this, the digital kind of aspects and technology out there are changing how we manage and serve our customers.
Now the other really important thing here, John, is digital technology gets a lot of attention. But within the asset management space, there's a shift occurring to the managerial approach to asset management, which we think is as important as the digital side of it. So, we collect all this data, this information, through the digital technologies, and then we have people that figure out what to do with that information and to make recommendations on how to improve performance. Traditionally, organizations have managed their physical assets through separate functions. So, we've got the maintenance aspect, capital projects and energy activities like budgets, expertise, technology and data have tended to operate in a siloed environment. And so, they'll have very little insight into each other in terms of talking to each other, the information passing back and forth between those different silos. And it could create some unnecessary and unidentified risk in the portfolio.
So, a big part of Ikigai and the Venn diagram, it's bringing all these different elements together to create that concept of ikigai, and what we call next-generation asset management combines these technological innovations and new managerial approach to provide organizations with the right data. It's integrated, it's cross-functional analytics, and it helps to make better decisions. And in the end, your assets may last longer in terms of how they're managing the portfolio and risk will go down and also costs can go down, as well. So, we call this 'Asset Ikigai' and we're going to apply this to our asset management solutions, which is a long happy life with purpose.
John Arnold
Absolutely. Well, you were just talking about how it doesn't really matter if you've got all this data unless you know what to do with it, unless you've got good people that can help take that and then collate it and then determine what the next steps are. So, you mentioned this shift, what are the challenges that clients are facing with this paradigm shift? That they've got all this technological advancement, but then they also need this managerial approach to help them?
Doug Hill
Sure, and this is where we get into a little bit of the nuts and the bolts of the system and the analytics piece. First off, Asset Ikigai is an ISO 55001-certified asset management framework centered on a cloud-based analytics tool that helps customers maximize the value of their physical assets. So, that — a ISO 55000 certification is really about international data standards. And so, going back to that data discussion at the beginning, where that's a really critical piece of where the world's moving in terms of what we do with data. And having this ISO certification has put us into a league that many of our competitors are not in. They don't have this ISO certification, where we establish a set of data standards and capture the right information per piece of equipment and ensure that the data has integrity and it's accurate.
So, once we do that, we have the powerful analytics down to the individual asset level, meaning that it's true asset management. Asset Ikigai also provides a powerful risk management tool with quantification capabilities to help customers evaluate the trade-offs between cost and risk. So, we have these dashboards that we've developed that will rank the criticality of the asset, where is it in its life cycle? And what are the chances that it might fail and what would be the impact on the business? So, we start to make decisions in advance to ensure that we can manage that risk and avoid a major outage or downtime of a critical piece of equipment.
John Arnold
So, as you mentioned previously. KBR's got 40-plus years of leading asset management experience, but they're also leaning heavy into the use of those tools that we just mentioned — analytics, machine learning, AI, through the Asset Ikigai platform. Can you tell us more about the platform, specifically?
Doug Hill
Well, initially Asset Ikigai was designed as a solution for our government customers. We also think there's an opportunity to deliver Asset Ikigai to commercial customers as well, because really, they both have sort of the same requirement in terms of managing the assets over the life cycle. So, our goal is really to provide that next-generation asset management service to both government and commercial. The initial focus for the product launch is with our government customers because we're already doing asset management work for them.
And when you think about it, John, we have rolled out some of our Asset Ikigai analytics to current operations in supporting programs, such as Diego Garcia in the Indian Ocean, a Navy base out there on a British territory up of Djibouti, Africa, naval support activity in Bahrain and other locations. We think, right now, that this is a differentiated offering with our current customers. And so, as we go through recompetes and we look at our future work, we think it's going to be an improved offering which will differentiate ourselves. And we also think we'll have opportunities to expand our analytics and our advisory services with other customers using these analytics and the data through the cloud, and then we provide the recommendations on how to prove operations.
John Arnold
Yeah, that's incredible. To preempt disaster! That's great. So, you mentioned government customers, What other kinds of customers does Asset Ikigai benefit?
Doug Hill
Another great question. So, Asset Ikigai is designed as a framework because it's considered agile, nimble structure that we can adjust based on each customer. Because each customer's going to have different needs, different requirements, different things that we're going to have to manage. So, the key with Asset Ikigai, this is really, really important, is that it is system or ERP agnostic. That word's used a lot nowadays, 'agnostic'. And technology neutral, meaning our customers don't have to abandon their existing systems and technology investments.
John Arnold
Right.
Doug Hill
What we do, is we come in ... let's say they're operating Maximo or SAP, this is where KBR's true value is realized. We offer advisory services based on our years of asset management experience to help customers develop a holistic approach to asset management. And as the technology changes, we can guide them through the process to optimize their assets and extract a maximum possible value from their portfolio. And as we discussed earlier, the Fourth [Industrial] Revolution. We're getting ready to go to the Fifth Revolution problem and industrial revolution. And so, technology is changing rapidly, and I think when that happens, we're on the cutting edge of that information, we can help our clients adjust accordingly and take advantage of the changes.
John Arnold
So, I'm excited about this next one because when we first started preliminary discussions for this, and this concept was mentioned, I was like, "Oh, that sounds very interesting." So, Asset Ikigai is also aligned with an exciting and innovative new offering at KBR, which is called “Supply Chain as a Service.” A lot of people might know of software as a service or things like that. So, now we have supply chain as a service. Can you walk our listeners through how this idea of supply chain as a service works?
Doug Hill
Sure thing, and it's really exciting time with regards to supply chain as a service. And the first thing I want to mention here is KBR, and you look at our business today, we have a highly capable, differentiated, functional supply chain organization with over 500 supply chain professionals. And we're executing 50,000 transactions valued at $3.4 billion annually. So, that is an internal support function to make sure we deliver to our customers today. So, over the years we've created, I think, a really strong supply chain organization. In this service that we currently have includes vendor and demand, planning, management, procurement, distribution of the goods, service contracting, and inventory management. So again, John, the impact on our business is extraordinary and critical to meeting customer requirements. Now where supply chain as a service comes in, it means a lot of different things to different people and we have to always ... sometimes need to narrow that definition down a bit.
But in short, it's about selling our services, our supply chain services, directly to clients who desire to outsource some or all of their supply chain operations. And we have defined these supply chain offerings in the realms of demand planning, purchasing, inventory management, distribution, all the things I just mentioned previously. We think we can sell that service to our clients. And then, the other piece is, just look at the automation, the artificial intelligence, the machine learning technologies that are on the market today. KBR's supply chain is starting to incorporate those digital technologies in our supply chain operations. And there's some real tangible opportunities that we're pursuing. We think that there's an existing and emerging markets within supply chain as a service with both, the Department of Defense and federal government-civilian markets.
John, for example, there are opportunities within the Veterans Affairs, United States Agency for International Development, and Defense Logistics Agency to name a few, where they outsource some of their supply chain requirements. The key to entering this market and having success is having a ... really, you got to have a technology kicker. All the technologies and digital enablers we've talked about today, along with the expertise to manage the supply chains, making them more efficient, effective, and understanding the global risk and how they impact downstream events. We think we have both the technology and domain expertise to break into this market.
John Arnold
It sounds like a really, really exciting opportunity. And again, when you're talking about a company like KBR that's already familiar with all of this digital technology and then has the expertise, it sounds incredible. I'm looking forward to seeing how that unfolds. A couple more questions for you. What are some of the changes or trends on the horizon, either technological or otherwise, that these solutions or these offerings are going to help clients address?
Doug Hill
Yeah, that's a great question, and I think, at the end of the day, it's all about data integration. I'm back to the data topic and virtual control towers. You may have heard that term where you have all this supply chain information that's related to time, cost and quality. And there's also demand planning tools with AI, so just think of all the information that's gathered through a procurement process and you create a historical record and then you also have all these other factors that could impact demand. It can be geographical issues, it could be social-economic issues, it could be seasonal, it could be raw material shortages. And to the extent that you're able to take all that information and predict what the future is going to be, is really where you can have a breakthrough in supply chain management.
The other types of technologies that are out there now are risk management tools, where there're companies that have developed AI, and we've partnered with a couple of companies where they've developed AI, where you can analyze your supplier base at the first-, second-, third-, fourth-, and fifth-tier level. Think about when you strike an agreement with a supplier, they have suppliers, and their suppliers have suppliers, and their suppliers have suppliers. And to be able to get some artificial intelligence to predict what that performance of those suppliers will be, is something that is starting to emerge into the market. And so, that risk management piece in supply chain, and we talked about risk and asset management as well, is really critical
And you may remember ... I mean, right now, as we talk, we have a lot of supply chain challenges in the world with shortages of raw material and goods. So, you got to have that technology to break into supply chain as a service and we're bringing that into our portfolio, and we've established partnerships with companies to enable us to put out bids in supply chain as a service. We actually have a couple of opportunities that we're pursuing and have been submitted and under evaluation. And then, last but not least, the most important thing is the people. And we have right people to integrate and manage the systems, the technology and the data to help our clients in the future.
John Arnold:
That's outstanding. So, with all that in mind, who should someone reach out to if they want to learn more about KBR Asset Ikigai or supply chain as a service?
Doug Hill:
I'm going to nominate you since you've read the book on Asset Ikigai, John, which I just think is great. But yes, myself, of course, for any of these topics. I would encourage people also to reach out to Steve Francis, who runs our business unit Business Development team. Jonathan Colburn, who's our Global Asset Management leader, and Jonathan, who is really the — the guy deserves a lot of credit behind the Asset Ikigai, and is sort of our designer and thought leader in that area. And also Adrian Burke, who's our senior director of Supply Chain, he's someone you can reach out and talk to about the supply chain services.
John Arnold
Excellent. So yeah, listeners, if you're out there an you want to know more, contact those folks. If you want to know something about the basic principles of ikigai, you can email me and I'll talk to you about it, but that's less interesting, I'm sure. Doug, while I've got you, is there anything else you'd like to leave our listeners with?
Doug Hill
Yeah, I would just say, right now, it's a very exciting time for the business. There's a lot of challenges ahead of us, and I think that KBR is well positioned to be successful in the future. And it comes back to our people, the great employees that we have, the great customers that we have. And the more technology and digital enablers that we bring into the fold, the more success we're going to have.
John Arnold
Excellent. Looking forward to seeing how it all unfolds, and again, appreciate your time immensely.
Doug Hill
Thank you.
TRANSITION
Lubna Salim
So, John, that was such a cool interview. I mean, I didn't know as a company we managed as many as 80,000 assets worth over a billion dollars, which are actually stored in our computerized maintenance management systems. It was fabulous.
John Arnold
It's mind-blowing.
Lubna Salim
Yeah, mind-blowing is the word. Mind-blowing. And it's amazing how we can preempt disaster using our technology and how the next generation asset management services are not just for the government customers, but also for the commercial customers as they require. They have the same kind of asset management requirements. And the holistic approach that Doug, or Douglas, talks about, it all ties in so well with what the offerings are.
John Arnold
I could not agree more. I thought it was fantastic to hear about what Asset Ikigai does, what KBR expertise enables the customer to do, not from just a managing-your-asset standpoint, but being proactive — making those decisions before disasters happen. Being able to prevent those things by looking at the information and saying, "This is something that could happen," and then being able to completely avoid it is pretty interesting, and a huge benefit for the customer. As you said, both government and private sector customers.
Lubna Salim:
And the numbers are absolutely impressive. We have over 500 supply chain professionals and we are executing 50,000 transactions valued at $3.4 billion. I mean, it's staggering. The numbers are amazing, and we don't even realize most of the times when we are focusing on, where is other highlight areas that actually so much work is being put in by our amazing, amazing team to achieve so many different targets, at so many different layers and levels and to make a delivery to our customers smooth. So, I think that was a very, very fabulous interview there, John.
John Arnold
Oh, thank you.
Lubna Salim
Yet again.
John Arnold
It speaks to KBR's team-of-team ethos. It speaks to the breadth and depth of our domain expertise across all of these different industries and outlets, and it's very, very exciting. So, if anyone listening to this, supply chain professionals, if you're looking for a fantastic gig, you might want to head over to the Careers page at kbr.com and see what opportunities are available.
Lubna Salim
Absolutely. We will be thrilled to have you join our team because we value our people, and our people are our strength as you can see.
John Arnold
Absolutely.
Lubna Salim
And we celebrate you on this podcast. So who knows, tomorrow you might be on our podcast.
John Arnold
And speaking of which, if you have an idea for a podcast, or you like something you've heard and you just want to drop us a line, please let us hear from you at InOrbit@kbr.com. And as always, thank you to Emma, our wonderful producer for the hard work that she does in helping us put the show together, we could not do it without her.
Lubna Salim
Thank you, Emma. Until next time, John, when I see you in person, hopefully very soon.
John Arnold
Yes, Looking forward to it.
Lubna Salim
Stay safe.
John Arnold
Yes, you too.
Lubna Salim
Stay healthy and stay happy.
John Arnold
I'll talk to you later.