When you are thinking of engaging an optimization advisor or consultant, keep in mind a number of important considerations. Optimization consultants are quants who focus on applying optimization techniques to real-world problems, and they are a unique breed. Think of them as brainiacs on a mission. They are driven to achieve practical results. Their passion is to create software programs that push the limits of computer applications. They could not care less about solving purely theoretical problems. They prefer digging into the nitty-gritty details of running a business and are fascinated by the idea that software can improve operations: from reducing the miles that trucks must travel, to improving the way planes are scheduled, to finding the perfect price that maximizes both sales and profits. All good optimization consultants want to perform miracles, succeed where others have failed, go where few have ventured.
The Optimization Edge
A Blog for Business Executives and Advanced Analytics Practitioners
Technologies: Data Science, Big Data, Optimization, Machine Learning, Artificial Intelligence, Predictive Analytics, Forecasting
Applications: Operations, Supply Chain, Finance, Health Care, Workforce, Sales and Marketing
Leaders of Remsoft, which provides optimized planning and scheduling for land-based assets, sought to eliminate performance issues that were impacting in-house and client-side users of their software. Attempts to uncover the root causes, which were inhibiting solutions for a growing category of business problems, had been unsuccessful for several years. Ultimately, their identification and correction required a formal quality assurance evaluation by an outside party with expertise in modeling, interior point algorithms, numerical computing, solvers, and deployment of optimization systems.
Much more is involved in the designing step of an optimization project than in designing a traditional IT project plan. The former involves creating a detailed vision of how the software will work, what kind of value the optimization software can bring to the organization, and the steps by which the software development will be carried out.
Note: Dr. Randall further explains the benefits of combining simulation and optimization in the cover article of the current issue of Analytics Magazine.
North American railroads have invested billions of dollars in recent years on terminals and infrastructure to improve rail intermodal, the transportation of containers and trailers on flat cars, which accounts for a quarter of major railroad revenue. In some cases, these investments have included the development of advanced technologies and analytics to assist speed and service and to ensure that intermodal remains an essential transportation strategy for shippers.
Improving revenue management offers great potential value because it goes right to the bottom line without additional capital spending. Moreover, it is needed in a world where pricing is getting faster.
What exactly is revenue management? The application of disciplined analytics that predict customer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. It is an example of “analytics in motion,” which uses real-time streaming data (that can be big, fast and noisy) and dynamic optimization to improve the quality of an organization’s continuous decisions such as: pricing, order acceptance, resource allocation, scheduling, routing, and forecasting supply/demand.
As a consultant, I spend time keeping up with the latest technologies that can assist us in the delivery of analytics-based projects. Many software vendors, both large and small, claim that using their software will automatically deliver great business value. I beg to differ. At Princeton Consultants, we always start with a business question whose answer brings value to the organization before building a model and analyzing data.
Blockchain is a hot topic, to put it mildly. Progressive Railroading recently interviewed me for an examination of blockchain as a game-changer. Read the article here.
It is important to recognize that blockchain is a generic technology, not a standard. Freight transportation will require standards for transmitting and adding to the blockchain, adjudicating ties and defining the messages, among other things. There is exciting potential in the Blockchain in Transportation Alliance (BiTA) and its ability to set those standards.
For the past 46 years, INFORMS has hosted a competition to determine the Franz Edelman Award, whose purpose is to “bring forward, recognize and reward outstanding examples of operations research, management science and advanced analytics in practice in the world.” Considered the “Super Bowl” of the field, the competition for the award has a rigorous process for selecting the six finalists who make their final presentations to the judges at the annual INFORMS Business Analytics Conference. This year, the Federal Communications Commission (FCC) was the winner, and I had the pleasure and honor to be one of their coaches for their entry.
MHI Solutions, which covers material handling and logistics, interviewed me for its current issue’s review of intermodal transportation trends. Many shippers used intermodal in the past, didn’t like it, and have been using truckload ever since. However, significant headwinds are now impacting truckload, such as the driver shortage. Truckload has not seen meaningful consolidation, so only a few companies are very large and profitable.