Ford Motor Company has received the 2013 INFORMS Prize from the Institute for Operations Research and the Management Sciences. The award recognizes Ford’s long-running, company-wide effort to use data science and predictive analytics to improve overall operations and performance. Applying rigorous analytics, including machine learning, operations research, data mining and big data throughout the business has played a key role in the resurgence of Ford in the past seven years. When chief executive officer Alan Mulally came to Ford in 2006, he helped to expand and institutionalize data-driven decision making throughout all aspects of the company. “Analytics and operations research was a major enabler of our turnaround and our ongoing success as a data-driven company,” said Bob Shanks, Ford Motor Company executive vice president and chief financial officer.
Operations research and statistical control have a long history at Ford, dating back to just after World War II when Henry Ford II hired 10 young veterans of the U.S. Army Air Force’s Statistical Control Command. The group became known as the “Whiz Kids” and included Charles “Tex” Thornton, who founded Litton Industries; Robert McNamara, who rose to president of Ford before serving as U.S. Secretary of Defense under President John F. Kennedy; and J. “Ed” Lundy, who eventually became Ford’s chief financial officer. The team brought the lessons of organizing wartime logistics for the United States military to the problems of running a huge manufacturing enterprise.
In recent years Ford’s analytics initiatives have begun to incorporate big data and apply them to developing new vehicles. While developing the all-new 2013 Ford Escape, the vehicle engineering team made tens of thousands of decisions such as determining the liftgate configuration. Extensive analysis of customer satisfaction data was used to decide whether to retain the flip-glass system from the previous-generation Escape, adopt a power liftgate, or both.
“Social media and the vast amount of online conversation is helping us get a faster and more specific data set to help us make product decisions. We now use text-mining algorithms to formulate a more complete picture of what consumers want that is not available using traditional market research,” said Michael Cavaretta, Ford technical leader for predictive analytics and data mining.
