Numb3rs tonight had a plotline involving causing blackouts by selectively destroying substations. At one point, the 
head nerd looks
at a pad of paper and says “These are Dantzig-Wolfe Decompositions; network interdiction strategies. That’s pretty high-end stuff.” A closeup of the pad reveals notes that look a lot like the things lots of us in OR do (albeit I use Dantzig-Wolfe for things like sports schedules). The episode is entitled “Blackout” and the scene occurs about half-way through (1:25 into part 3 of the innertube version). Thanks Gary Lorden for the shout-out to OR! And thanks Brian Borchers for emailing me about this.
Category: OR in the Press
UPS, OR, and US News and World Report
US News and World Report has an article in their July 31 issue on how UPS uses technology to better handle packages. In the hypercompetitive world of package delivery, the need to use OR to create efficiencies is very strong.
Perhaps no industry has more effectively embraced the power of digital technology to modernize operations–even more so than airlines, which were long seen as leaders in cutting costs and boosting revenues through computers. “The delivery companies have leapfrogged ahead,” says Satish Jindel of SJ Consulting Group.
In their tight competition, industry leaders UPS and FedEx have one-upped each other for years in rolling out hand-held computers, wireless links, and new uses of mainframe computing power. Now UPS is pushing automation to the last mile of its delivery network, down to charting the order in which packages are loaded on a truck and the most efficient route for delivering them. Dubbed “package flow technology,” the latest upgrade is costing $600 million and taking three or four years to implement across the company’s 70,000 routes. When the upgrade is in place, UPS says it should get back that $600 million every year in saved costs, as more-efficient routes cut 100 million miles of driving time and 14 million gallons of gas. “It’s fundamental–a major, major change that will even change the way our drivers run their routes,” says Chief Information Officer David Barnes.
They even found room for a quote from me:
Pushing automation to the fringes of its operations is only possible because of the mass of data that UPS computers have been collecting as parcels move through its central hubs, and thanks to advances in math and computing power. Delivery companies have become leaders in “operations research,” a growing field that uses mathematical models to streamline processes, says Michael Trick of Carnegie Mellon University. “It used to be that only airlines could worry about issues like routing,” he says.
Hmm… did I really say the last part? Well, the point I was trying to make was that while airlines where at the forefront of practical OR, we are now seeing it in lots more places. UPS is a good example, though they are catching up with firms that caught the OR bug early, like FedEx:
Bart Haberstroh, who delivers for UPS in St. Charles, Mo., a St. Louis suburb, remembers when “the joke was that the sharpest tech UPS had was a sharp pencil,” he says as he wheels his brown van through familiar streets.
With the amount of OR pouring into their systems, that is no longer the case.
Logistics in the Economist
Brian Borchers of New Mexico Tech sent me an alert that the Economist magazine of June 15, 2006 has a number of articles on the changing face of logistics. One article is on eCourier, a London based courier service. The heart of the system is operations research in the form of algorithms for courier scheduling:
The key to the service is picking the right courier, says Mr Allason[one of the founders of eCourier]. The one whom the GPS system shows to be nearest to the job may not necessarily be the most appropriate. For instance, a courier in London may be only a few hundred yards away from a collection address, but if he is on the other side of the Thames it could take him 15 minutes just to cross the river. Other information, such as traffic problems and the performance of individual couriers, also needs to be taken into account.
This is a mathematical problem, and eCourier spent some time hunting around for someone able to solve it. Eventually it found a team led by Cynthia Barnhard [sic], a logistics expert at America’s Massachusetts Institute of Technology, which devised an elaborate algorithm that is now at the heart of eCourier’s business, in much the same way that a mathematical formula drives Google’s search engine. What Mr Allason particularly likes about his internet-based courier system is that it is easily “scaleable”: more couriers and markets can be added without having to hire many more dispatchers or people to run a call-centre.
The “Cynthia Barnhard” referred to is Cynthia Barnhart of MIT who among about 40 other jobs is co-director of their Center for Transportation and Logistics. Perhaps when the magazine corrects her name, they might also mention the phrase “operations (or operational) research” to describe her field!
This is a good example of one of the growth areas in operations research: OR applied to “smaller” problems. While 10 or 20 years ago, OR needed an airline or other huge organization to justify its use, the easier accessibility to software and more routine use of models allows it to be used in smaller organizations. This is also a great example of how an entrepreneurial company can use OR to gain tremendous competitive advantage.
Update June 29, 2006
There is an interesting article from eCourier about how “Cynthia Barnhard” helped out in this project. It does appear an “italian team” did most of the implementation. I hope some day some company tries to woo me with fruit baskets!
More Operations Research in Business Week
Operations research is on a roll. The May 29th issue of Business Week has a cover story on the use of simulation and other methods to take the guesswork out of medical care. The key person for this article is Dr. David Eddy, described as a “heart surgeon turned mathemetician and health-care economist”, who was the 1980 recipient of the INFORMS-awarded Lanchester Prize. This prize is given for the “awarded for the best contribution to operations research and the management sciences published in English”. The award citation to Dr. Eddy included the following:
The rapidly growing cost of health care is of great concern to many citizens. Our health care system and policies in the U.S. might be described as the product of many good intentions but only modest analysis. This year’s Lanchester Prize goes to a book: Screening for Cancer: Theory, Analysis and Design by Dr. David M. Eddy, published by Prentice-Hall, Inc., Englewood Cliffs, 1980, which is a significant and welcome contribution to the quality of analysis in the health care field.
In its general form, the problem studied by Dr. Eddy is an old one in the operations research literature, namely, the monitoring and repair of a probabilistic deteriorating system. This dry sounding phrase takes on special meaning when the system is the human body and the deterioration is cancer.
The principal concerns of Dr. Eddy’s work are: which screening tests should be used and with what frequency for various classes of people. The notable feature of Dr. Eddy’s analysis is the thoroughness with which account is taken of such things as the cost of administering a test, the cost of processing false positives from a test, the fact that a test may cause the disease it is attempting to detect, the fact that more frequent testing detects disease earlier and gives the illusion of prolonged life expectancy even in the absence of a cure, and the fact that if the disease may sometimes go into remission naturally, then more frequent testing gives the illusion of a higher cure rate. Also, Dr. Eddy’s analysis was one of the first to make the useful distinction between modeling the state of a patient as his cancer screening history to date, which is observable, as opposed to the state of the disease, which is only partially observable.
The style of Dr. Eddy’s work is in the best operations research tradition of interdisciplinary analysis. The remarkable feature is that in this case the varied disciplines are all embodied in one person.
From the Business Week article, it seems that 26 years later, Dr. Eddy continues this path:
Continue reading “More Operations Research in Business Week”
Optimize magazine and Operational Excellence
Optimize is a 70,000 circulation magazine aimed at CIOs and CTOs. The topic of the May, 2006 issue is “Operational Excellence”, and it contains a host of articles about operations research, one done by yours truly. My article, entitled “CIO as Business Predictor” tries to talk about the role uncertainty plays in decision making and how OR approaches can help address these issues. The sidebars in the article describe the finalists in this year’s Edelman Competition.
A second article, entitled “Bringing Unity to Cardinal Health”, described how IT and operational excellence go hand-in-hand. There is a sidebar of an interview with Irv Lustig from ILOG on the how IT and OR interact.
The Editor’s Note to the issue also talks about OR quite a bit, and says some very nice things about me! I think I will get it framed and send to my mother.
Between this and the coverage by Stephen Baker from Business Week, OR is getting noticed quite a bit these days in the more mainstream press.
Stephen Baker on Operations Research
Stephen Baker, the author of the Business Week cover story on how Math Will Rock Your World, is rapidly becoming a highly visible writer about Operations Research. His May 4 blog entry, entitled “Why journalists don’t cover how things work” had some comments on his experience at the INFORMS Practice Conference:
At the O.R. conference (the association is called INFORMS), there were far too many interesting presentations for one person to cover them all. The people behind operations at Intel, IBM, the Army, Ford and plenty of others provided inside looks. Beat reporters of those companies could have feasted on these lectures. But they weren’t there.
Why? The press covers news, stocks, companies and personalities. But try pitching a cover story on operations. People think it’s … boring. Trouble is, if we want to know where things are going, we have to understand how they work. And when the process is transformative, as it often is in OR, there’s nothing boring about it. The winner of the annual Informs Franz Edelman award, by the way, was the Warner Robins Air Logistics Center. They overhauled the maintenance of jumbo C-5 transport aircraft, reducing repair time by 33%. This means that these monsters, which cost taxpayers $2.3 billion each, spend more time in the air and less time in the shop.
If Stephen keeps this up, we may see lots more press coverage.
Great Newsletter
The publishers of OR/MS Today (the membership magazine of INFORMS) have started an online and email newsletter. The first issue contains a large number of short, interesting tidbits from the world of (practical) OR. Feel free to subscribe so it shows up in your mailbox as soon as it is published.
Operations Research Job Prospects
Money Magazine and salary.com have a ranking of 166 job titles, based on salary and job prospects. I was happy to see “College Professor” as the second best job (good salary, good growth, lots of freedom). Having Operations Research Analyst mired in roughly 120th place (out of 166) was less fun to see. The salary for the field is good, but job growth was relatively low. Still, OR Analyst beat out mathematician, economist, physicist, librarian and many other seemingly appealing fields.
Descriptive versus Prescriptive
Working in a business school (the Tepper School at Carnegie Mellon), many of my colleagues are economists (or “financial economists” as many of my finance colleagues are titled). One of the big hurdles we have in communicating is a differing view of the purpose of models. For many economists, models are used to describe behavior. For instance, a model of certain types of incentives may lead to particular outcome behavior. If we see the outcome behavior, this suggests the model is a good one. If an economist does not see the outcome behavior, then there is a puzzle at best, and a bad model at worst.
For an ORer (a word I just made up, because OR person sound stilted), models are almost always prescriptive: they tell you what to do. For that same model, an ORer will, if happy with the model, not worry about whether the outcome behavior is happening. If not, then people are doing things wrong, and should smarten up and follow the OR prescription.
Articles like the one today in the New York Times (subscription required) make me feel happier about the OR approach. People, even reasonably sophisticated people, just don’t seem to make good decisions. The example is drawn from finance, but examples abound:
Operations Research and CIOs
United Airlines now has a CIO who is also responsible for operations research and other activities. This seems a natural, if somewhat unusual move (OR is often under manufacturing, operations or some other structure). OR is all about using information, and as firms realize the value of information (and CIOs) is in their ability to extract knowledge from information, more OR may be in the hands of the CIO.