Hello everybody, last week I found this interesting article about information systems and it reminded me to the speech done in class about big data and also about the routing program seen in class and how companies take advantage of that.
Information systems are increasing their importance in business, mainly in Logistics. As we saw in class with the speech done, data gives us information and this is very important to make decisions. This article explains exactly that, software is a powerful way to have new insights into large-scale efficiency. The problem is that companies are not always ready to think big and improve their situations.
This big data mixed with mathematical innovation and computing power in allowing companies to solve bigger and more complex logistics problems. There are some solutions about routing, scheduling and sourcing provided by informatics models that no human would ever spot. As a consequence of this, companies can reduce supply chain costs by up to 15%.
The problem is: companies does not want to take advantage of this. In the article is mentioned an example about one client of the company where DR. Jeff Karrenbauer worked in. By the way, INSIGHT is the company where Jeff worked in, this was a consulting company about logistics (which worked with big data applied in computer programs). He said that the problem was not the manufacturing and procurement of the company but it was the politics: the manufacturing people were like gods there. They won’t cede control of their little empire, so when the company in which Jeff worked recommend some changes analyzed by computer programs they did not accepted. For instance, a human planning truck route will always avoid “drive by”, which is taking a truck from one pickup to a third, by passing a second in between. But INSIGHT saw that a computer will sometimes find a drive by is actually most efficient, for reasons that human can’t easily perceive.
The conclusion is that there is a battle of wills between humans and algorithms and is only going to get sharper as analytics penetrate more aspects of organizational life. Real efficiency demands that companies look hard at whether their overall objectives align with the motivations provided to units, and make sure that top-level executives are on the same team.