An electronic control module (ECM) on-board a machine executes a reduced-order model configured to generate virtual sensor data associated with a machine component based on sensor data measured by actual sensors. The ECM can also execute a machine learning model configured to generate offset data for the sensor data and/or the virtual sensor data, based on operating conditions, an age of the machine component, and/or other factors that the reduced-order model may not consider. The sensor data and/or the virtual sensor data, adjusted based on the offset data, can indicate whether the machine component has failed or is predicted to fail at a future point in time, and/or a remaining usable life of the machine component.