Archive for the ‘Operations’ category

Making of a Fly

February 6, 2012

While watching a TED video about algorithms, mention was made of an unrealistic price on Amazon. Apparently two retailers had an out-of-control computer feedback loop.

One company, with lots of good customer points, is in the habit of selling products a little higher than the competition. Anyone’s guess why, but facts are facts – they routinely price merchandise about 25% higher than the competition (and rely on the customer experience points to pull customers away?).

Well, the competition routinely prices merchandise a little lower than the highest priced competitor: about 1% less.

So these computer programs began a game of one-upmanship. A $10.00 product was listed for $12.70 by the first company. Later in the day, the second company’s computer listed the same product for 1% less – $12.57. So the process repeated:  $15.96 and $15.80. Then $20.07 and $1987. The process continued until the book was listed for $23,698,655.93, plus shipping. (all numbers illustrative)

This story illustrates one of the challenges to automated feedback loops. An engineering instructor once explained it – if the gain feedback is a positive value greater than 1, the feedback will either oscillate, or latch-up.

More on feedback controls for real systems another day.

Read more here: https://www.google.com/#q=making+of+a+fly

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Making new IT work for the business

September 23, 2011

I found an EXCELLENT article in the Digital Energy Journal by Dutch Holland. In this article he explore different strategies for transforming operational requirements into successful initiatives.

Without stealing too much of his well articulated article, the five approaches normally used are:

  • The by-the-book business analyst
  • The business-experienced analyst”
  • The businessman CIO
  • The IT expert Inside the business
  • The operations-led interface

I encourage anyone attempting to implement a operations-centric technological solution to read his article.

http://www.findingpetroleum.com/n/Making_new_IT_work_for_the_business/d1a1861b.aspx

“When trying to connect technology innovation with business, an intelligent interface between the two is required. It must be able to translate business opportunity into technical requirements; innovate, test and evaluate; and seamlessly implement new technology into the business.” ~Dutch Holland

Predictive Analytics

September 9, 2011

Predictive analytics is used in actuarial science, financial services, insurance, telecommunications, retail, travel, healthcare, pharmaceuticals and other fields (Wikipedia). But operations – manufacturing, processing, etc., have been a little slower to encompass the concept. A drilling engineer friend of mine says “just put my hand on the brake lever and I’ll drill that well”. He probably can, but few of the rest of us can, or want to.

We want to see operating parameters, performance metrics, and process trends. All this because we want to have the necessary information and knowledge to assimilate understanding and invoke our skill set (wisdom). In this scenario, we are responding to stimulus, we are applying “reactive analytics”. But systems get more complex, operations becomes more intertwined, performance expectations become razor-thin. And with this complexity grows demand for better assistance from technology. In this case, the software performs the integrated analysis and the results is “predictive analytics”. And with predictive analytics comes the close cousin: decision models and decision trees.

Sullivan McIntyre, in his article From Reactive to Predictive Analytics, makes an observation about predictive analytics in social media that is mirrored in operations:

There are three key criteria for making social data useful for making predictive inferences:

  • Is it real-time? (Or as close to real-time as possible)
  • Is it metadata rich?
  • Is it integrated?

Having established these criteria, the nature of the real-time data and the migration of historical data into real-time, predictive analytics becomes achievable.

What is Content?

September 8, 2011

Several internet articles and blogs address the meaning of content from an internet perspective. From this perspective, content is the (meaningful) stuff on a page, the presentation of information to the seeker.

But content within an operations-centric perspective is entirely different. And the databases and operational tools must be content data reflecting the desired information being sought in the pursuit of knowledge. Thus, paraphrasing Scottie Claiborne (http://www.successful-sites.com/articles/content-claiborne-content1.php), “content is the stuff in your operations system;  good content is useful information”.

Therefore, content is the meaningful data and the presentation of this data as information.

Content can, and should be, redundant. Not redundant from a back-up perspective; redundant from an information theory perspective – data that is inter-related and inter-correlated. (Data that is directly calculated need not be stored, however, the method of calculation may change and therefore the original calculation may prove useful.) Data that is inter-correlated may be thought of in terms of weather: wind speed, temperature, pressure, humidity, etc. are individual, measurable values but the inter-relate and perfectly valid inferences may be made in the absence of one or more of these datums. When the historical (temporal) and adjacent (geospatially) datums are brought into the content, then, according to information theory, more and more redundancy exists within the dataset.

Having identified the basis of content, the operations system designer should perform content analysis. Content analysis is both qualitative and quantitative. But careful attention to systems design and systems management will permit increased quantification of the results. What is content analysis in its most base form: the designer asking the questions “What is the purpose of the data? What outcomes are expected from the data? How will the data be imparted to produce the desired behavior?”

So how do we quantify the importance of specific data / content? How do we choose which data / content to retain? This question is so difficult to answer, the normal response is to save everything, forever. And since data not retained is data lost, and lost forever, this approach seems reasonable in a world of diminishing data storage costs. But, then, the cost and complexity of information retrieval becomes more difficult.

The concept and complexity of data retrieval is left for another day…


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