Business Technology: Time To Do More With Less
Nine months ago, we at InformationWeek launched a monthly magazine called Optimize that focuses on business strategy and execution (optimizemag.com). With articles written by subject-matter experts ranging from C.K. Prahalad and Mike Hammer to Clayton Christensen and Rob Carter, Optimize helps its 70,000 executive-level readers gain deeper insights into such fields as leadership, return on investment, marketing, finance, collaborative strategies, and others.
These days, the drive for optimal achievement is indeed everywhere: in cost-cutting, in operations, in sales-force deployment and behavior, in pricing, purchasing, positioning, negotiating, and more. Companies are looking to their business-technology leaders not only to help them do more, but also to do more of the right things -- often with less: fewer people, less spending, less time, less margin for error.
White PapersMore >>
One of the leading voices in the field is Mike Trick, a professor at the Graduate School of Industrial Administration at Carnegie Mellon University, president of the Carnegie Bosch Institute, and president of the Informs Association. An area of particular interest to operations research experts today, according to Trick, is revenue management, wherein companies try to maximize capacity and profitability by exploiting changing supply and demand curves. Airlines, for example, change prices as the time of the flight nears because once the doors close, any unfilled seat is valueless. Trick says revenue management is extending into other fields as well, for what business isn't interested in maximizing capacity and profitability by developing models that identify the best prices in a dynamic setting? Other fields employing this type of research include cruise ships and movie theatres; will it be long, Trick asks, before it also makes its way into areas such as university admissions, toll roads, and communications systems?
And for all of you who've experienced the joy of waiting at the airport for a couple of extra hours because the plane is there, and the passengers are there, but the crew is somewhere else, take heart: Operations research is hacking through the maze of obstacles presented by union rules, FAA regulations, individual preferences, training issues, and more. Looking ahead, Trick says even more progress can be made in the field of air travel through the efforts of a new type of research called robust optimization. "While operations research has been extremely successful in reducing crew costs for airlines, we're only at the beginning of creating solutions that react well to snowstorms, airport delays, and other common disruptions," Trick says. "The big question we're pursuing is, how can we develop optimization solutions that are robust to a changing environment?"
Other areas operations research is attacking include supply-chain optimization, financial engineering, natural-resource planning, and even the new frontier of ubiquitous optimization. "As algorithms get better and computing is even faster," he says, "optimization and operations research can be embedded in more places. An optimizing toaster, perhaps?"
Interested in learning more? Trick suggests the following resources: the journal Interfaces (interfaces.pubs.informs.org); OR/MS Today magazine (ormstoday.pubs.informs.org); links at www.informs.org/; read and post on Usenet group sci.op-research; and the Web site www.e-optimization.com. So don't procrastinize; get out and optimize.