Fine-Tuned Thoughts: Leveraging Chain-of-Thought Reasoning for Industrial Asset Health Monitoring

Shuxin Lin, Dhaval C Patel, Christodoulos Constantinides


Abstract
Small Language Models (SLMs) are becoming increasingly popular in specialized fields, such as industrial applications, due to their efficiency, lower computational requirements, and ability to be fine-tuned for domain-specific tasks, enabling accurate and cost-effective solutions. However, performing complex reasoning using SLMs in specialized fields such as Industry 4.0 remains challenging. In this paper, we propose a knowledge distillation framework for industrial asset health, which transfers reasoning capabilities via Chain-of-Thought (CoT) distillation from Large Language Models (LLMs) to smaller, more efficient models (SLMs). We discuss the advantages and the process of distilling LLMs using multi-choice question answering (MCQA) prompts to enhance reasoning and refine decision-making. We also perform in-context learning to verify the quality of the generated knowledge and benchmark the performance of fine-tuned SLMs with generated knowledge against widely used LLMs. The results show that the fine-tuned SLMs with CoT reasoning outperform the base models by a significant margin, narrowing the gap to their LLM counterparts. Our code is open-sourced at: https://github.com/IBM/FailureSensorIQ.
Anthology ID:
2025.findings-emnlp.1126
Volume:
Findings of the Association for Computational Linguistics: EMNLP 2025
Month:
November
Year:
2025
Address:
Suzhou, China
Editors:
Christos Christodoulopoulos, Tanmoy Chakraborty, Carolyn Rose, Violet Peng
Venue:
Findings
SIG:
Publisher:
Association for Computational Linguistics
Note:
Pages:
20687–20700
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URL:
https://aclanthology.org/2025.findings-emnlp.1126/
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Cite (ACL):
Shuxin Lin, Dhaval C Patel, and Christodoulos Constantinides. 2025. Fine-Tuned Thoughts: Leveraging Chain-of-Thought Reasoning for Industrial Asset Health Monitoring. In Findings of the Association for Computational Linguistics: EMNLP 2025, pages 20687–20700, Suzhou, China. Association for Computational Linguistics.
Cite (Informal):
Fine-Tuned Thoughts: Leveraging Chain-of-Thought Reasoning for Industrial Asset Health Monitoring (Lin et al., Findings 2025)
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https://aclanthology.org/2025.findings-emnlp.1126.pdf
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