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  • Blog Series: Demystifying Data Science

    Austin Haygood Mar 7th, 2017
    clusters
    Blog Series: Demystifying Data Science If you are like me, you hear terms like machine learning, data mining, algorithms, etc. talked about as needed solutions all the time. For years I would hear these terms and think to myself, “Yeah, I think I know what that means” or “Am I the only person in the... Read More »
  • Peer Bank Recommender

    admin Feb 13th, 2017
    credit cards on dollars
    Hari Murakonda and Sanjeevni WanchooFebruary 14th 2017 Introduction If you’ve ever been part of stress testing at a bank, you have probably heard of term “peer banks” often. So who are these peer banks ? Why would a subject bank like to know its peers ? What role do peer banks play in stress testing... Read More »
  • costa-rica-truck
    The above picture is one I took while on vacation in Costa Rica.  We were going to a remote beach at the end of a 3-mile pothole and rut-stricken dirt road.  We happened to be following a truck making a delivery.  The truck got stuck by an overhanging tree.  The driver immediately got out, with... Read More »
  • driverless trucks smaller
    There has been a lot of talk about how driverless trucks may reduce the need for drivers and how will our economy replace these 2 million good blue collar jobs. The same conversation is going on for the larger economy with all the buzz around artificial intelligence. Lots of smart people and deep thinkers are... Read More »
  • Bearded hipster writes formulas on a chalkboard
    I often get asked what organization design construct is most effective in building out analytics capabilities within an organization. In canvassing our client base, all approaches broadly fit into three organization design constructs: centralized, center-led, and de-centralized. Other than the presence of an Analytics COE, there is no common construct in organization design that I... Read More »
  • Book Review: My thoughts on “Shoe Dog”

    Hari Murakonda Jan 26th, 2017
    shoe-dog
    Shoe Dog, a memoir from Phil Knight, the Founder of Nike, is one of the best books I have read in recent times. From the beginning, the book is filled with gripping and inspiring stories. At the age of 24, having embarked on a world trip, his interpretation of the experiences in the trip was... Read More »
  • network design
      Driverless trucks could have a large impact on the design of your supply chain. Jeff Potts of LeanLogistics wrote a nice blog post that hit on some of these ideas. He gave us a few good insights: Driverless trucks promise to reduce transportation costs by avoiding getting more use from each truck without having... Read More »
  • businessman looking to chart
    As we reflect back on 2016, a few interesting themes emerge on the importance of operations in business: Some of the biggest brands in the world are promoting talent into key leadership positions with a foundation in operations.  David Taylor is just over a year into his role as President & CEO of Procter &... Read More »
  • Distribution warehouse, package shipment, freight transportation and delivery concept
    In a previous blog Dr. Mike Watson offered up a statement that seemed to goes against what people have been taking for granted within inventory solutions for years: You Don’t Need the Optimization in Multi-Echelon Optimization.  Opex Anlaytics Data Scientist, Bradford Winkleman recently followed this up with very insightful Guest Blog for Supply Chain Digest digging into... Read More »
  • Businessweek New England Paper Tube Plant
      Last month, Bloomberg Businessweek ran a story on how the New England Paper Tube company made a comeback from bankruptcy by focusing on the products it could make profitably (and that no one else could).  It is worth a quick read– it is a very small company, but has two interesting lessons. The first... Read More »
  • The Four Myths of Supply Chain Risk

    Larry Snyder, Ph.D. Sep 30th, 2016
    Rows of new cars covered in protective white sheet
    In over 15 years of studying supply chain risk, there is a common set of comments that I often hear from both supply chain researchers and practitioners. Whether they would admit it or not, the people making these comments are basically using them as an excuse to say, “Meh. I’m not going to bother dealing... Read More »
  • How Amazon Arranges It Warehouses
    On LinkedIn, I came across this short, one and a half minute, video on how Amazon arranges items in its prime warehouses.  These are the warehouses where Amazon stocks items in local markets for their 2- and 1-hour deliveries.  The warehouses store items randomly throughout the warehouse to minimize the time to pick.  The video... Read More »
  • Dealing With Poor Predictive Models

    Hari Murakonda Sep 23rd, 2016
    Security video surveillance
  • We’ve all been there. You have spent all week getting the optimal results and now you have a short time to put your results in a presentable form. You can spend hours getting the right answer, but if your delivery isn’t clear then that may overshadow all the hard work you’ve done. When designing a... Read More »
  • Imagining the Supply Chain of 2030

    Kristen Daihes Sep 15th, 2016
    Andy Picture MT 3 Web
      I had the opportunity to join the Supply Chain Insight Global Summit last week in Arizona.  As expected, this summit did not disappoint.  Lora Cecere has a knack for pushing practitioners, vendors, and consultants outside of their comfort zone.  She uses data to weave a story about reality that we cannot refute, and then... Read More »
  • Stock market price display
    Whether for documentation or reporting, incorporating document producing packages in your R code will allow you to easily share your code and its outputs. Incorporating these methods will improve your productivity especially if the process is iterative or recurring. You will also avoid copying and pasting code and graphs over and over again! Today we... Read More »
  • Defocused image of warehouse
    The Truth is That Multi-Echelon Inventory Optimization is Widely Misunderstood and Chances are, you Don’t Need Optimization (This article first appeared in Supply Chain Digest) Multi-Echelon Inventory Optimization (MEIO) has been a hot topic for the last 15 years—software vendors push it, industry analysts tout it, and customers demand it. The surprising truth behind all... Read More »
  • Three bulleye targets for business concept
    Below are useful guidelines for how to build and maintain a data-centered process that can help drive analytical capability for you and your organization.   Businesses across all industries are pushing to grow their data and analytical capabilities. In the pursuit of a data-driven business, common mistakes can be made. To help you better navigate... Read More »
  • 93651335_thumbnail applicances web
    A couple of years ago while working on my PhD and before joining Opex Analytics, I had the privilege of working with some amazing people as part of solving a customer product delivery and transportation problem for GE Appliances & Lighting. The results of this collaboration is published in a journal paper and we believe... Read More »
  • Resources
    “Baseline Validation” is as elemental to a network modeling workplan as “creating good jobs” is to a candidate’s economic plan. It has to be there. You can’t be against it. But it’s not always clear whether there is any real meat to that part of the plan. A baseline scenario is the first model run... Read More »
  • Who is Afraid of the Big (Bad) Wolf?

    Diego Klabjan Aug 19th, 2016
    images-3
      In May 2016 I participated at the IRI Annual meeting in Orlando. I attended the round table “Implications of Big Data on R&D Management” organized by the Big Data Working Group where I serve as a subject matter expert. The discussion was moderated by Mike Blackburn, R&D Portfolio/Program Leader, Cargill. The participants from companies... Read More »
  • iStock_73626421_XLARGE Frustrated Planner Web
    When I was a planner more than 15 years ago for a consumer goods manufacturer, I approached each Monday morning with dread.  Not because I did not enjoy the company I was working for, rather I knew that I would be entering into a period of painstaking 5-Why research looking back a week to categorize... Read More »
  • The Newsvendor Doesn’t Tell the Whole Story

    Larry Snyder, Ph.D. Aug 5th, 2016
    Newsvendor small
  • Newsvendor small
  • Role of Loss Functions in Machine Learning

    Mohsen Moarefdoost Ph.D. Jun 30th, 2016
    Web Formulas
  • iStock_000026778700_Large Multiple Targets for Web
    (This is the second article in the series on Profit Maximization that was first published at SCDigest.) In a previous post, I discussed two big reasons why you shouldn’t build your supply chain model to maximize profit. Hopefully, I convinced you and prevented needless extra work and heartache. However, even if you have a cost... Read More »
  • iStock_000026778700_Large Multiple Targets for Web
    (We recently were interviewed on weekly The Supply Chain Television Channel and CSCMP– click on the above picture and go to the 3:55 mark for the interview.  The interview was based on the following blog post which also appeared on SCDigest.  We received a lot of feedback on the post and will write more. Without further... Read More »
  • You Can Set Inventory Levels and Other Such Myths

    Michael Watson Ph.D May 13th, 2016
    iStock_000063269441_Inventory Web
    (This article first appeared in SupplyChainDigest.) If you are like me, when you first got into the inventory field it was hard to figure out what it was planners were actually doing. When I asked inventory planners and managers what they were doing. They gave answers like the following: “We set our inventory levels to... Read More »
  • Discovery vs Production with Big Data

    Diego Klabjan Mar 18th, 2016
    Andy Picture MT 3 Web
    It has been noted that big data technologies are predominantly used for ETL and data discovery. The former has been around for decades and is well understood with a mature market. Data discovery is much newer and less understood. Wikipedia’s definition reads “Data discovery is a business intelligence architecture aimed at interactive reports and explorable... Read More »
  • iStock_000063269441_Inventory Web
    (This article first appeared at Supply Chain Digest and was co-written with Paul Brown.) When rolling out a tactical inventory planning system, there are several organizational issues you need to keep in mind.  These will matter as much as the technical capabilities of the solution in terms of overall implementation success. 1.  You may have... Read More »
  • Sun Ray in City web
    Many companies are sitting on an asset and aren’t realizing its value. This asset is the data you have from customer call transcripts and complaints.  A lot of such call transcripts and customer complaint databases have existed for a long time without drawing much interest as a source of broader insights. In most cases, the... Read More »
  • Mathematical Optimization and Machine Learning

    Mohsen Moarefdoost Ph.D. Feb 15th, 2016
    Web Formulas
    You won’t be surprised if I tell you machine learning, data mining and data science are hot topics today. But, you might be wondering what makes you an expert in these fields? You definitely need to know basic data wrangling, munging and manipulation. Also, you should be familiar with tools like Python, R, MATLAB, and... Read More »
  • techniques
    I just came across an article in Inbound Logistics on the 6 Steps you should go through in a network model.  This article serves as a good reminder on what it takes to do a network design project.  The six steps are: State your goals Assemble the data Clean up the data Create scenarios Run the... Read More »
  • Nice Saban Picture web
    I heard a great story on how Nick Saban’s Alabama football team wins so many games. The story goes like this:  They never focused on the outcome of the game or looked at the scoreboard.  Instead, they focused all efforts on executing the very next play.  Every play was treated like it was a game... Read More »
  • Top 3 Predictions for Network Design in 2016

    Michael Watson Ph.D Feb 2nd, 2016
    iStock Training Resized
    Last week, Dan Gilmore of Supply Chain Digest asked us to provide predictions for what would happen in the field of network design.  Here is his full article with predictions in other areas. Here our Top 3  predictions for 2016: 1.  Modeling will become more collaborative.  Modeling has always required data and feedback from many different... Read More »
  • iStock_000048148718_Large Sensors web
      The Wall Street Journal recently published an Op-Ed piece by Andy Kessler (author of Eat People and Running Money, and other books) on what new technologies today will really change the world. Many of the ideas had to do with how sensors would open up new possibilities.  The 5 ideas that had to do... Read More »
  • A Tech Tip on Interpolation

    Sari Nahmad Jan 21st, 2016
    iStock_000048148718_Large Sensors web
    This week’s tech tip is on interpolation, one kind of data transformation data scientists use to create new data points within the range of a discrete set of existing data points. This technique is often used to transform quarterly data to monthly data. Presented below are three common methods of interpolation that convert the original... Read More »
  • Red Fish Combined
    (This article first appeared in SupplyChainDigest and was co-authored by Sara Lewis) Recent advances in computing and availability of data have driven an explosion of enthusiasm around predictive analytics. As these algorithms and technology spread through companies and industries, it has become increasingly important to have knowledge of key concepts that extend beyond buzzwords. There... Read More »
  • Non-linear models and the value they can create

    Mohsen Moarefdoost Ph.D. Jan 18th, 2016
    iStock_000026778700_Large Multiple Targets for Web
    Operations research analysts and modelers try to avoid non-linear models in network and supply chain design. This has led many of us to believe that most of the problems in the area of supply chain are inherently mixed-integer linear problems. In fact, there are many problems that require non-linear modeling; remember that the most basic... Read More »
  • Powerball Lottery
    It is hard to avoid hearing about the $1.5 Billion Powerball.  Along with the size of the prize, there has been a lot of attention on your chances of winning (1 in 292 million).  So, I thought this was as good as any excuse to talk about the expected value.  Here are three lessons: #1:... Read More »
  • Bringing Analytics to the CFO

    Michael Watson Ph.D Jan 12th, 2016
    20151122_Winter Path Web Size
    A recent article in the Wall Street Journal highlighted the rising need for analytics on the CFO’s team. The article highlighted how CFO created groups for Financial Planning and Analysis (FP&A) that went beyond normal finance functions and helped the business run better. The article gave the example of the FP&A team at Dunkin Donuts help... Read More »
  • iStock_000048148718_Large Sensors web
      MH&L recently published an article on the Top 10 advanced technologies that will shape manufacturing’s future.  The research was done by Deloitte and the US Council on Competitiveness. Here is the list: Predictive analytics Smart, connected products (Internet-of-Things) Advanced materials Smart factories (Internet-of-Things) Digital design, simulation and integration High performance computing Advanced robotics 3D... Read More »
  • The Big Short
    The Big Short, a box office hit, details how Dr. Michael Burry (and a select few) predicted the credit and housing bubble collapse and made millions while the entire economy went down the drain. How did Burry end up on top? The key to his success was that he analyzed the fine details: loan data... Read More »
  • iStock_000067123143_printing press Large web
    On Dec 15th, Snapfish, a photo services company, found themselves on the front page of the USA Today. Unfortunately, the reason they made the front page was that they were very late in shipping Christmas cards to customers.  And, customers were upset. We saw something similar during Christmas 2013 when UPS and FedEx could not... Read More »
  • Sunset web
    NPR’s Planet Money recently did a podcast on A/B testing.  It is worth a listen if you are new to the topic.  A/B testing is a key part of the current analytics movement. The podcast did a nice job in highlighting one of the key case studies on how Barack Obama used it in his... Read More »
  • image of bank
    On Dec 11, the Wall Street Journal’s lead article in its Money and Investing Section was on the news that the Bank of America (BofA) passed its stress test.  This was big news because earlier in the year, the Fed had decided that BofA’s stress test models did not meet standards.  BofA had to spend... Read More »
  • image of bank
    Fallout from the 2008-2009 financial crisis included the emergence of a new regulatory landscape intended to safeguard the U.S. banking system from a systemic collapse. In 2012, the Federal Reserve Board of Governors (Fed), began to require the largest U.S. Bank Holding Companies (BHCs) to file a Comprehensive Capital Analysis and Review (CCAR), with stress tests intended to assess... Read More »
  • Machine Learning and High Quality Potato Chips

    Michael Watson Ph.D Dec 16th, 2015
    iStock_000077072789_Full Potato chips web
    I always like learning about new applications of machine learning algorithms to improve operations.  And, I especially like ones that are easy to explain. I ran across one such application in a podcast interview of Frito-Lay’s Brendan O’Donohoe where he was discussing the potato chip supply chain.  One of the interesting stories he told was... Read More »
  • Introduction Video to Opex Analytics

    Michael Watson Ph.D Dec 14th, 2015
    iStock_000041990766_Large Chicago Skyline for Web
    Be sure to check out our 2 and 1/2 minute introduction to Opex Analytics.
  • Simple Models for Next Day or Next Hour Delivery

    Michael Watson Ph.D Dec 2nd, 2015
    20151122_Winter Path Web Size
    (This article first appeared on SupplyChainDigest) When we wrote the book Supply Chain Network Design, we intentionally started with a very simple model to help people build intuition on how the math works.  This simple model optimized the location of facilities to minimize the distance to the customers.  This model did not consider costs, capacities,... Read More »
  • Podcast: Big Data Analytics with Aster R

    Michael Watson Ph.D Nov 23rd, 2015
    iStock_000046199458_Large_Podcast_Web
    The popularity of R continues to grow.  However, it can be difficult to use R with large data sets. Diego recently recorded a 6-minute podcast on the benefits of Aster R.  In this 6-minute podcast, you will learn about the trade-offs when trying to analyze large data sets with R and how Teradata’s Aster R... Read More »
  • 6 Modeling Tips from LLamasoft and JLL

    Michael Watson Ph.D Nov 16th, 2015
    Man interacting with virtual world map
      (This article first appeared in SC Digest.) At the same CSCMP talk as Benjamin Moore (covered here), Jason Brewer of LLamasoft (a provider of supply chain design software) and Kelly Gray of JLL (or also known as Jones Lang LaSalle, a full services commercial real estate firm) opened up the discussion with some of... Read More »
  • Andy Picture MT 1 Web
      (This article first appeared on SC Digest.  It was a report from the annual CSCMP Conference) With the current low price of diesel fuel and the expected continuing drop in the price of oil, I was wondering how much interest there would be in the CSCMP talk on natural gas trucks.  My question was... Read More »
  • image of bank
    Dodd-Frank Act Stress Testing (DFAST) is now required also for smaller banks with assets less than $50 billion. Simply stated, the test requires a bank to assess possible losses in future years from the loans on the books. A report exploring many different future economic scenarios such as increases in the unemployment rates or short... Read More »
  • iStock_000031281272_Double for Web
    Alex Scott recently published an article on real-time index for truckload rates.  (The article is here but you may need to do a free registration to get access.)   Even though the truckload market is a $700B industry, Alex points out that there is no agreed upon index that shippers and carriers can use to... Read More »
  • Birch Trees small
    In a recent engagement, we were tasked with evaluating sets of time series data at many intervals to determine the health of the system (essentially, looking to classify each increment of the time series). Being biased towards Python, we built datasets and began testing with most of the standard machine learning classification algorithms in sci-kit... Read More »
  • Why python can make your decision making process easier

    Mohsen Moarefdoost Ph.D. Oct 22nd, 2015
    Andy Picture MT 3 Web
    If you are dealing with complex, large scale and multi layered systems, you may end up analyzing and solving multiple, even nested, optimization problems (LP- linear programs, MIP- mixed integer programs, QP- quadratic programs, etc.) in your decision making process. So, you need to design an analytical algorithm that calls optimization problems multiple times, use... Read More »
  • iStock_000043210746_Large Paint web
    At CSCMP’s annual meeting, I got the chance to listen a talk from Benjamin Moore on how they redesigned their supply chain.  Here were the top five lessons I gleaned from the talk (you can find this list and more details in the full article on Supply Chain Digest): Expect a study to take 3-4... Read More »
  • Two Supply Chain Design Lessons from Starbucks CEO

    Michael Watson Ph.D Oct 19th, 2015
    iStock_000017053046_Large Starbucks Web
    The Starbucks CEO, Howard Schultz, spoke at the annual CSCMP event in San Diego a few weeks ago. He made two key observations about the the supply chain: First, you won’t be able to scale your business unless your supply chain can handle it.  (As a side note, he also mentioned that if your HR department... Read More »
  • NFL Fans on Facebook

    Cario Lullo Oct 8th, 2015
    iStock_000041857676_Large Steelers Stadium Web
    In 2013, Facebook conducted an exploration of the number of Likes received by each NFL team in every U.S. county for each day of the season. The study conducted by Sean Taylor involved approximately 35 million U.S. account holders who Liked a page for one of the 32 teams in the league can be found... Read More »
  • CSV to Spark SQL tables

    Diego Klabjan Jul 20th, 2015
    iStock Data Image Sized for Blog
    Recently we were involved in a project that required reading and importing more than 30 csv files into Spark SQL. We started writing scala code to ‘manually’ import file by file, but we soon realized that there is substantial repetition. As a result we created a nice helper object that takes as input information about... Read More »
  • iStock_000041990766_Large Chicago Skyline for Web
    Yesterday’s Chicago Tribune ran an article on how All State and the City of Chicago are combining existing data sets with predictive analytics to solve long-standing problems.  These problems include how to best conduct restaurant inspections to minimize food-borne illness, how to inspect elevators to prevent problems, and which trees to trim to minimize damage after... Read More »
  • iStock_000026778700_Large Multiple Targets for Web
    (This article first appeared in Supply Chain Digest) Let’s start with an example of multi-objective optimization.  The map you see is all the towns and cities in Germany where your product is sold.  Let’s assume you want to to determine how many warehouses you need so that you are within 75km of every customer. This... Read More »
  • iStock_000020359668_Medium Man and Mountain sized for Web
    (Note:  This article first appeared in Supply Chain Digest). A few months back, the Wall Street Journal reported that Ceasar’s “big-data customer loyalty program” was valued at $1B.  This highlighted again the idea that data is becoming an ever more valuable asset. A good book, Big Data, discusses how firms are realizing that that the... Read More »
  • Ford’s $100M Inventory Solution

    Michael Watson Ph.D May 26th, 2015
    iStock_000056977124_Large Autos For Web
    Several years ago, I worked on a technical inventory optimization project for a $1.5B consumer products company.  The CEO of this firm attended a few of the technical meetings where we were talking about things like lead-time variability and the forecast errors.  I asked him why he was so interested in this inventory project. His... Read More »
  • iStock Data Image Sized for Blog
    One of the biggest hurdles in MapReduce is model calibration for machine learning models such as the logistic regression and SVM (Support Vector Machine). These algorithms are based on gradient optimization and require iterative computations of the gradient and in turn updating the weights. MapReduce is ill suited for this since in each iteration the data... Read More »
  • Which Final Four Game Was Most Exciting?

    Bradford Winkelman Apr 9th, 2015
    iStock_000040227242_XXXLarge for Web
    Which Final Four game was the most exciting? The question is difficult because any person who has an opinion is likely heavily influenced by personal loyalties. One objective way of answering the question is to conduct sentiment analysis of Twitter data. The plots below show the total number of tweets per minute* throughout each of... Read More »
  • Elite 8 Game Louisville Michigan State
    Last Sunday we followed March Madness on Twitter to see what fans and rivals were discussing during the final day of the Elite Eight competitions. Looking at the trends you can almost feel the emotions of the various fan bases. For example, check out the spike for #louisville and compare it to the subsequent spike... Read More »
  • NCAA_March_Madness_logo
    We are collecting Twitter data for the NCAA Tournament. We’ll have more to come, but you will like this dashboard. It shows which team has the most tweets (over the last 48 hours- before the round of 64, but during the play-in games)– you might be surprised. You can see whether teams are getting negative... Read More »
  • So what can companies expect to derive from social media, in this case Twitter? To give a little background, Twitter is an online social networking service with more than 100 million users. Users can post and read “tweets” which are short 140 character messages. These tweets are little messages that companies can hone in on... Read More »
  • iStock_000031281272_Double for Web
    What is the status of the truckload transportation market?  Does demand outstrip supply?  Does supply outstrip demand?  Is the market relatively balanced?  These are hard questions to answer because, unlike commodities such as corn or beef, there is no centralized exchange for truckload transportation. So if a shipper wonders why their contracted carriers are rejecting... Read More »
  • opex_contact
    After receiving a lot of feedback on our video interview on data cleaning, we just published an article on Supply Chain Digest on the top five rules for cleaning data in a strategic project: #1:  Be patient. Usually by the time the project starts, the management team wants (or has been promised) fast results. It... Read More »
  • Customer Behavior from Web and Text Data

    Diego Klabjan Mar 3rd, 2015
    Many sites and portals offer text content on web pages. For example, news aggregators such as The Huffington Post or Google News allow users to browse news stories; membership-based portals focusing on a specific industry, e.g., constructionsupport.terex.com for construction, offer members a one-stop page for the latest and greatest updates in a particular domain; in... Read More »
  • a-shot-to-remember-wiki-commons
    Airlines have been one of the first industries to use advanced analytics in areas such as revenue management. “Should a request for a seat be granted?” is a fundamental challenge in the industry. If it is granted, the money can be left on the table since the next day a highly valued business passenger might... Read More »
  • Big Data: A Misnomer

    Diego Klabjan Feb 20th, 2015
    Google Trends shows no organic searches for term “big data” until 2011 and an approximately 7-fold increase in the next two years, and then searches doubled from 2013 to 2015. Google projects further increase in the following years albeit at a lower rate. Google searches for Hadoop, the most popular software for handling big data,... Read More »
  • Do You Have Clean Data for a Strategic Project?

    Michael Watson Ph.D Feb 18th, 2015
    When doing a strategic analysis, most firms either assume they have exactly the right data.  That is, these firms have ERP systems full of data, data warehouses full of data, and seem to have the data they need to run their business. However, the data collection and cleaning process for this type of study always... Read More »
  • iStock Data Image Sized for Blog
    We recently worked on a client engagement that included web data and other customer specific information. It was a propensity analysis type project where recommendations were required for each individual client based on his or her past actions on the web. Each item recommended has many features and clients belong to organizations, which creates interactions... Read More »
  • Since many of the most publicized examples of advanced analytics consider companies in the private sector, we don’t often think about how these techniques apply in humanitarian and nonprofit organizations. Yet, the public sector provides exciting applications of analytics that have a positive impact on the community. For instance, the American Red Cross, Greater Chicago... Read More »
  • Recently Hortonworks published the attached white paper on how the advent of big data technologies have given rise to a “new ultra-competitive breed of business that consumes the full spectrum of its data transforming immense volumes and varieties of data into currency.” This paper addresses how these “Data First” enterprises are investing in advanced analytics to garner... Read More »
  • Northwestern Professor and Partner at Opex Analytics, Diego Klabjan recently authored the following column on same-day delivery and its impact on the design supply chain in Supply Chain Digest. The article highlights past failed attempts of a decade ago of firms like Webvan and Kozmo with recent efforts by companies ranging from start-ups such as Deliv... Read More »
  • iStock Training Resized
    We’ve recently published an article in CSCMP’s Supply Chain Quarterly on the three things that a supply chain manager should know about Big Data and Analytics. The three things are: Big Data is not just for the IT Department There is more than one type of analytics Machine Learning has many potential supply chain applications Follow... Read More »
  • I’ve recently read the book Scaling Up Excellence by Robert Sutton and Huggy Rao. ( Click here is you want a 14-minute HBR podcast interview or click here for a 60 minute presentation at Standford by Sutton) The book has some great lessons for how to take a good idea within an organization and scale it throughout an... Read More »
  • Three Ways the Supply Chain Wastes Big Data

    Michael Watson Ph.D Nov 4th, 2014
    One of the important lessons from the analytics movement is that you should take advantage of the data you are already collecting.   There could be a lot of value and insight in this data. In a recent article on Supply Chain Digest, we talk about 3 ways the supply chain is wasting this data.... Read More »
  • Modeling the Competition

    Michael Watson Ph.D Nov 3rd, 2014
    When making strategic decisions, it is often important to understand what your competition is doing. I recently wrote a short article Supply Chain Digest and did an interview (about the 3:30 mark) on Supply Chain TV sponsored by CSCMP highlighting how companies with high transportation spend can model their competitors.  These models help you understand your competitor’s... Read More »
  • Fortune 500 companies are big enough, and have enough resources, to assemble and run their own internal analytics teams. In today’s environment, it is impossible for a large corporation to succeed without employing analytics. The situation is completely different if we make a step down to small and medium business (SMBs), which are typically corporations... Read More »
  • Needless to say, there can be no analytics project without data. A project starts by identifying data, cleansing it, performing analytics, and then conveying the results or solutions. The rule of thumb is that 70 to 80 percent of the total timeframe for an analytics project is spent on data preparation and a much smaller... Read More »
  • The biggest grunts about Hadoop is its batch processing focus and the fact that iterative algorithms cannot be written efficiently. For this reason it is mostly used in data lakes for storing huge datasets together with its ETL/ELT capabilities and for running ad-hoc queries with map reduce. In-memory database on the other hand offer great... Read More »
  • Just-In-Time and Lean Concepts in New Areas

    Michael Watson Ph.D Oct 20th, 2014
    JIT (or “Just-in-time” and later morphed into being called Lean) started out as part of Toyota’s manufacturing strategy where parts were delivered to the assembly line just when needed.  This not only helped reduce the cost of the items, it also forced Toyota to be more disciplined and that led to even bigger savings.  ... Read More »
  • Want to process real-time data? Web anyone? Or IoT or the industrial internet! You can fire spouts and bolts in Storm and get “whoops, one of our assembly machines is about to experience problems!” For decades companies were able to use RDMS and data cubes to find out what revenue would be lost if an... Read More »
  • Last week, the Wall Street Journal’s Review section ran a long article from Walter Isaacson on artificial intelligence.   The overall article was very interesting, but two key points are worth mentioning.  One, the arrival of true artificial intelligence (a machine’s ability to think like a person and innovate– or even become super smart and... Read More »
  • Today, I was watching the PSU-NU game on the Big Ten Network when an ad came on for Case New Holland’s AFS Connect system (a farm management system).  At first blush, there is nothing new about farm equipment manufacturers advertising on the Big Ten network.  A lot of farmers watch Big Ten games. But, what... Read More »
  • Big Data does not mean you have Clean Data

    Michael Watson Ph.D Aug 27th, 2014
    In all the hype around Big Data, it is often forgotten that you still need to spend time cleaning data so you can use it efficiently. We just published an article in Supply Chain Digest highlighting this fact.  Our article points to two interesting references that back this up:  a blurb from a Freakanomics podcast... Read More »
  • A recent Economist article (Little things that mean a lot) on Big Data discussed that the use of data can actually help find many small changes that add up to large impacts over time.  This is in contrast to the idea that Big Data will help you uncover a single insight which will change your... Read More »
  • Another Benefit of Analytics: Recruiting Talent

    Michael Watson Ph.D Jun 11th, 2014
    One of the overlooked side benefits of building internal analytics capability is recruiting talent. Universities are rapidly creating new analytics courses and programs because top students and future business leaders are demanding it.  And, these students are eager to take their skills to companies that are doing interesting work in analytics. If your organization is... Read More »
  • Distance matrices of different varieties have applications throughout the field of analytics; though the computation varies depending on the application, they always serve the same purpose: providing a pairwise measure of difference between all data points.  Some applications require geographical distance matrices; these can prove computationally intensive if the distances between geographies is on the... Read More »
  • Big Data Applied to the Supply Chain

    Michael Watson Ph.D Apr 14th, 2014
    This week, Dan Gilmore of Supply Chain Digest wrote about Big Data in the Supply Chain.   It was a well-balanced article, covering both the hype and some nice solutions.  Here is one quote: …For example, Ron Volpe of Kraft said his company (as are others) is working on tying together mountains of data from POS sales,... Read More »
  • In manufacturing environment, companies use an automated setup of tanks and hoist for chemical cleaning and coating processes. In this setup, various chemicals kept in tanks situated on a straight line and a hoist moves jobs between tanks according to job operation time and sequence. This setup is costly and can be a bottleneck process... Read More »
  • Yesterday’s WSJ ran an article on the importance of analytics (“Get Familiar With Big Data Now—or Face ‘Permanent Pink Slip’“- may be behind a paywall). The article is an interview with an executive recruiter, Linda Burtch, who has helped staffed the analytics groups at Darden Restaurants, Jack in the Box, Leo Burnett Worldwide, Foot Locker,... Read More »
  • Earlier this week, I wrote an article for Supply Chain Digest about enhancing your network design capabilities with a map portal: Since the mapping in a network design projects leads to so much value, you should considering providing this type of visualization on an on-going basis.  You can get a lot more value if your... Read More »
  • The use of analytics in sports is quite well known.  The Oakland A’s popularized analytics by using it to build winning teams with a minimal budget– we mentioned and extended this case in our book.  Recently, ESPN Magazine ran a special “Analytics Issue.” Late last year we were approached by Roger Goodell of the NFL to... Read More »
  • Top Five Skills Needed For Supply Chain Modeler

    Michael Watson Ph.D Mar 24th, 2014
    I recently wrote an article for Supply Chain Digest on the Top Five skills you need in a supply chain modeler.  They are: Ability to manipulate large data sets Ability to understand trade-offs in the supply chain Ability to separate the important from the trivial Ability to troubleshoot Ability to communicate the results Be sure... Read More »
  • Predictions that Save Big Money

    Sara Lewis Mar 19th, 2014
    Why is it that your car always seems to breakdown during your busiest week at work? Farmers fear the inevitable failure of their combine equipment during the peak of harvest season.  Plant managers struggle with knowing when and how their manufacturing equipment is causing the deterioration of the quality of their products. Situations such as... Read More »
  • Whether you are developing more complex optimization models or beginning to formulate solutions including technologies such as LogicNet Plus or R, one thing will remain the same.  The focal point of any supply chain analytics project starts with ‘the data’. As a consultant, I spend a lot of my time cleaning, rationalizing, and formatting data.... Read More »
  • Yesterday’s Wall Street Journal ran an article titled “Who Needs to Know How to Code” that suggested the many executives should learn about coding: Even people who don’t plan on becoming developers may hear at work that they ought to learn to code. American Express Co.,General Electric Co. , Staples Inc., Merck & Co., Inc. and PepsiCo Inc.  have worked with General Assembly... Read More »
  • Supply Chain Digest just released a very nice report on the current state of supply chain planning.  I wrote a follow-on article commenting on the section about the biggest supply chain technology barriers.   (This link will take you to my article where you can find a link to the report). Here is an excerpt:... Read More »
  • We recently had the privilege  to work with two Georgia Tech students (Chandreshekar Sundaresan and Seth Webster) on a white paper that explored the relationship between inventory and the number of warehouses in your supply chain. This paper goes much deeper than the much quoted “square root of N” rule.  You will find that the... Read More »
  • New Book to Help Managers Understand Analytics

    Michael Watson Ph.D Jan 13th, 2014
    We have recently published a new book to help managers understand the field of analytics.  This book will help you learn what the field of analytics is all about and how it can help you and your organization.  We based this book on the class we teach at Northwestern, the work we have done in... Read More »
  • The Wall Street Journal recently reported the continued rise of heat maps to track customers in stores (“Tracking Technology Sheds Light on Shopper Habits”).  This is not a new trend.  An article in the Economist last year pointed out the rise of in-store cameras to track customers. Both these articles point out that this trend... Read More »
  • A recent Wall Street Journal article, “A Bonanza in Smarter Flu Tracking,” discusses tracking the outbreak of flu to better predict demand. The article notes that companies selling flu related products can boost sales by timing the ads and arrival of product to a market at the start of the flu season in that area.... Read More »
  • Many businesses lease equipment rather than purchase it.  This has tax and finance advantages since the assets are not listed on the books of the lease.  Also, for equipment with a short life cycle- like computer equipment, leases allow you to keep up with changes in technology.   Although IT equipment is probably the most frequently... Read More »
  • New Release of IBM ILOG LogicNet Plus XE

    Michael Watson Ph.D Oct 17th, 2013
    On Oct 16th, IBM released a new version of LogicNet Plus XE.   This new version contains some nice enhancements to the tool.  These enhancements continue to make the tool easier for business users.  The upgrades include the following: New version of CPLEX– this will allow you to solve larger models and solve models faster... Read More »
  • Comment on “Is Big Data an Economic Big Dud?”

    Michael Watson Ph.D Oct 14th, 2013
    The New York Times recently wrote an article, “Is Big Data an Economic Big Dud?”  Here is part of the article questioning the value of Big Data: For now, though, he acknowledges that most of the raw data flowing across the Web has limited economic value: far more useful is specialized data in the hands... Read More »
  • Lora Cecere recently published an article in Data Informed, The Role of Analytics in the Race for the Supply Chain of the Future.  Here is a slice: For most companies, the word analytics is synonymous with reporting. But despite thirty years of supply chain technology evolution, the most commonly used system for supply chain planning is... Read More »
  • Determining the best delivery frequency for suppliers into your facilities involves trading-off three key factors: First, you need to to consider transportation costs.  If your vendors ship frequently, you end up paying more in transportation per unit.   What makes this analysis complex is that transportation rates are not linear.   As you move from... Read More »
  • Three Types of Buffers

    Michael Watson Ph.D Oct 7th, 2013
    I recently wrote an article for Supply Chain Digest (Three Types of Supply Chain Buffers) that discussed that every supply chain has variability and will buffer this variability with some form of inventory, capacity, or time. What is interesting about this concept is that is applies to every business, not just a supply chain.  The... Read More »
  • Analytics for Small and Medium Sized Firms

    Michael Watson Ph.D Aug 19th, 2013
    A lot of press around analytics is focused on large and exciting projects.  But, analytics can be applied to firms of any size. Northwestern’s Kellogg School of Management’s recent magazine published an article, “Think you are too small for Big Data?  THINK AGAIN.“ At Opex Analytics, we are providing a variety of analytic solutions for... Read More »
  • We recently did a video interview on Supply Chain Digest (starting at about the 3:20 mark) on the trucking industry’s new Hours of Service Rules (basically increasing the limit on the amount of time a truck driver can drive before resting). In the interview, we make a case that the impact on the total costs of transportation... Read More »
  • Maps Are More Than Eye Candy

    Michael Watson Ph.D Aug 12th, 2013
    We all like to look at nice graphic or visualization.  But, as it becomes easier to create nice graphics and visualizations, some have become more art than conveying information. It is important that we remember the purpose of our visualizations.  Michael Schrage, in his HBR blog, states that visualizations should be “interfaces to interpersonal engagement.”... Read More »
  • IBM recently published a white paper called The New Software-Defined Supply Chain.   We had a chance to participate in this work.  They paper discusses how 3D printing (additive manufacturing), advanced robotics, and open source hardware may have a dramatic impact on the supply chain. The paper argues that…”despite the press coverage that technologies like 3D... Read More »
  • Network Design Book Reviews

    Michael Watson Ph.D Aug 7th, 2013
    If you are involved in a network design project– whether running the software, managing the project or just part of the team, you should consider the book, Supply Chain Network Design.  We wrote the book to help people better understand the field and do better work in this area. You can can check out the... Read More »
  • Using Safety Stock to Buffer Against Variability

    Michael Watson Ph.D Aug 6th, 2013
    Dealing with variability is part of creating a lean supply chain (or lean enterprise).  Ideally, you would like to eliminate the variability.  However, this is not always possible.  When it is not possible, you need to create the appropriate buffers. If you are interested in more details about how inventory can be used to buffer... Read More »
  • IBM put together a nice 3-minute video explaining mathematical optimization.
  • What is a Data Scientist?

    Michael Watson Ph.D Aug 2nd, 2013
    With the rise of Big Data and data in general (see here for a definition of Big Data), there is an increased need for people to analyze that data to turn it into information.  Thomas Davenport and D.J. Patil recently wrote an article in Harvard Business Review about how Data Scientists are going to be the hot... Read More »
  • I recently wrote a blog post on SCDigest about the three definitions of Big Data. It is worth a read.  More managers are under pressure to do something with Big Data.  Before you can do anything with it, you should know what it is. The article covers three different definitions of Big Data: IT definition:... Read More »
  • Transportation is an area ripe for analytics: It is a big expense It is made up of many different shipments You have difference choices to make And, many companies do their transportation analytics in Excel.  This is not a bad thing.  They load up thousands, if not hundreds of thousands of shipment records to analyze.... Read More »
  • In yesterday’s post, we discussed a short definition of Analytics (“the ability to collect, analyze, and act on data.”). Of course, this is a broad definition.  To determine your appropriate analytics strategy, it is important to understand the different categories that make up the field of analytics. A team from IBM published one of the better... Read More »
  • What is Analytics? Part 1: 4 Short Answers

    Michael Watson Ph.D Jul 29th, 2013
    It is clear that analytics is a very hot topic now.  Companies are committed to pursuing analytics and discussing their successes.  Consulting firms talk about their services to help their clients take advantage of analytics.  Software vendors tout their analytics solution. But, what exactly is analytics? Quick searches do not seem to yield good definitions.... Read More »
  • Network Design Case Studies

    Michael Watson Ph.D Jul 22nd, 2013
    At our site for our book, Supply Chain Network Design, we have a blog post that pulls together the following case studies: Mars and Wrigley merger Whirlpool and Maytag merger MillerCoors merger The Home Depot supply chain transformation Pepsi and Multi-site Production Planning Johnson Controls closed loop battery supply chain Südzucker uses network design to adjust... Read More »
  • New “Hours of Service” rules went into effect on July 1st.  These new rules decrease the amount of time a trucker can drive during a week. For more information on the impact, The Wall Street Journal wrote a nice article and Dan Gilmore at SupplyChainDigest wrote an interesting article suggesting that the impact may not be... Read More »
  • Welcome to the Opex Blog

    admin Jun 24th, 2013
    Welcome to the blog for Opex Analytics. We’ll be using this blog to post general educational articles on analytics and Big Data– especially as these relate to businesses.  One of our goals is to help you cut through the hype and keep up with the news surrounding the terms analytics and Big Data. We’ll also... Read More »