Data Mining Goes Mainstream

A NYTimes Money article talks about data mining going mainstream, also mentions Tom Davenport's recent book: "Competing on Analytics: The New Science of Winning", previously mentioned here. The book also briefly mentions P&G's use of analytical methods. Good overview with some useful examples, though nothing about managing the risk involved.

" ... The entry barrier, he says, "is no longer technology, but whether you have executives who understand this." There are plenty who do. Big retailers like Wal-Mart Stores and Kohl's use today's advanced computing and math to more accurately predict what sizes of clothes should go to what stores. Harrah's and other casinos decipher slot-machine results to optimize customer traffic and profits, and they use face-recognition software to identify people with criminal records. And Stockholm and other cities use traffic data and patterns to determine "congestion pricing." ...

" In the last year or so, Whirlpool, the appliance maker, has begun using new analytics software to automatically scan warranty reports as well as manufacturing, supplier, sales and service data to try to further trim its warranty costs and improve quality. That is no small task, since it sells an average of 25,000 washing machines a day, for example. "A human being cannot see and detect all those trends," says John Kerr, the general manager for global quality.

With the new computing tools, Whirlpool has trimmed by 30 to 90 days the time required to detect and fix parts or manufacturing problems that cause defects. "The math is astounding," Mr. Kerr says ... "