In the frame of the master in logistic LOG2020, a brief presentation about BigData and its impacts on Supply Chains at IUAV. Topics and contents have been developed along the research for the MBA final dissertation at MIB School of Management.

1. 1 Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain

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…let’s start with what is not:
Gathering all the data generated
Storing all the data for years and years
Predicting the future (demand, offer, stocks,… and thus prices)
Necessarily so «BIG» (Lean IT approach)
Bold Titles: “BIG DATA = BIG MONEY” (Source: Yahoo Finance)
What does BigData mean?
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain

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5 Billion Mobile
Phones (2010)
$600 to buy a disk
drive that can store all
the world music
30 Billion
pieces/month of
content shared on
Facebook
$600 Billion potential annual
consumer surplus from using
personal data globally
40% year
projected growth
in global data
5% growth in IT
spending globally
60% potential increase
in retailers operating
margins
190.000 job
positions with deep
analytical skills
BigData Facts & Figures
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Source: McKinsey Global Institute
M & A
BIGDATA: Top Mislead
Tech Buzzword 2013!

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“Big data” is high-volume, -velocity and -variety information
assets that demand cost-effective, innovative forms of
information processing for enhanced insight and decision
making.” (Doug Laney – Gartner)
BigData: a definition
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Source: McKinsey Global Institute
“Big data” 3Vs
Volume
Variety
Velocity

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BigData 3V: Volume
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Key Facts:
every day are generated 2.5 10^12 bytes (trillion) of new data (…that
does not mean necessarily also new information: redundancies)
hourly transactions of Walmart generates a volume of data that is
equal to the data stored in the Library of Congress
cost of storing per gigabytes: from $1 billions (1980) to less than
$0,05 (2010)
Source: BCG's Perspectives, «How to get started with BigData»

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BigData Volume: a business
case
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
What? Time?
Positi-
-on?
DATA

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…it’s a question of “lead” time!
BigData 3V: Velocity
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain

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BigData 3V: Velocity
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Key Facts:
the “Same day delivery” battle between EBay andAmazon:
EBay doesn’t own warehouses like its competitor Amazon
…but, EBay has been able to provide to its customer a “same day of
delivery” service by establishing partnership with retailers and by
handling a network of retailers as a distributed inventory
AlsoWal-Mart and Google (Google Shopping) are developing such a
business model like EBay
Source: Reuters, «EBay expands same-day delivery in local battle with Amazon»

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Managing different data sources altogether (ERP, GPS
devices, RFIDs, social networks,…)
Structured Vs UN-structured data:
Structured: inventorying all the items in a warehouse or a vendor list
are structured data that can be handled by designing a data model
for a relational database (RDBMS)
UN-structured data coming from blogs and social network they need
database architectures that are not relational (NoSQL Databases)
BigData 3V: Variety
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
See: http://nosql-database.org/

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SEO: Search Engine Optimization (“semantic” search)
BigData: an example
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Content
(words)
Context
(NW)
SEO
Where IS the PROBLEM:
CONTENT or CONTEXT?
CANDIDATE?
Where IS…?
…A GOOGLE SEARCH: MIB?
Source: David Amerland,
«Google Semantic Search»

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BigData as a tool…
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
BigData
Analytics
DATA
INSIGHTS
PREDICTION
MODELS:
MA, AR,ARMA,
Kalman Filter,
Neural Networks,
Customized,…
Assumptions
Raw Materials
Products

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Data Science Pyramid
How to «BigData»?
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Visualization
Knowledge
Extraction
Feature Extraction
Cleaning Integration Storage
Data GatheringSelection
Ground Level: the Question?
Source: Data Community DC, «The Pyramid of Data Science»

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Common «S.L.I.P.S.»…
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
BIGDATA
4) PSYCHOLOGY
1) STATISTIC
2) LEARNING
3) INFORMATION
5) SOURCES
…when purchasing a B.I. tool!
BIGDATA
S.L.I.P.S

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Mislead Correlation with Causation
Discovering correlations among variables doesn’t
necessarily imply a cause-effect relation
Mathematically speaking, correlation is a
necessary but not sufficient condition for a
cause-effect relationship
BigData SLIP N.1: Statistic
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Key Aspects:
Correlation among data: must be estimated and verified
Representativeness of the data used for estimating
correlationcausation relationship. (statistical inference)

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A cause-effect relationship exists:
Validation: which modelalgorithm to chose in order to describe the
relationship?
A model validation is not valid “forever”: constantly monitor and
measure the error of prediction = estimated – actual value
Choosing a model implies making assumptions: be open to
break them
BigData SLIP N.2: Learning
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Key Aspects:
The modelalgorithm used by the prediction tool (Assumptions)
Error of prediction (learning)

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What information actually is?
BigData SLIP N.3: Information
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
DATA
(Facts)
Assumptions
(Culture, Mindset)
Information
Case Study: how a western say
YES or NOT in India by moving
the head and viceversa

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BigData SLIP N.3: Information
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Key Aspects:
Which is the data that is relevant in order to provide (the) Information?
Information is the answer to the question (the base of the data science
pyramid)
Relevant data: 1) What + 2) Time + 3) GEO Position and… that’s it!
Information is an interpretation of data (facts): are the assumptions
behind information constantly verified?
…and thus be able to learn (break assumption)

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What about Sentiment Analysis?
Key Aspects (issues):
eco-chamber effects
social influence: social media might amplify irrational behaviors.
individuals base its decisions also on the actions of those who act before
them (influencers)
negative and positive SEO tactics
sentimenters: treat them carefully. The risk is to gather
datainformation intrinsically biased
BigData SLIP N.4: Psychology
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain

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Handling different Sources (remember the “V” Variety)
What about the reliability of the sources of data for the
analysis?
There is always a bias that can not be eliminated: the variance of the
data sample
How to improve predictionanalysis reliability? By gathering data from
different (independent) sources and weight them accordingly to its
“quality”: the variance (e.g.: MIMO antennas array)
BigData SLIP N.5: Sources
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Key Aspects:
Variance as a measure of the quality of data
Data redundancy (variety of sources) is not useless. A lot of high
volatile data from independent sources might be together a good
source of data (low variance)

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Thanks to conversation with experts…
A Golden Role from Data Scientist
K.Borne
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
SEO & Semantic
AuthorExpert
Data Scientist
1° BigData
influencer
“Semantic” SEO
SEO = CONTENT + CONTEXT
ASSUMPTION: NO BIASES
Source: D. Amerland, K. Borne and I.Gruer, Twitter conversation

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The Double Side of IT..
BigData, IT and the value
chain…
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
NEEDS
BigData
(IT)
1- Automation
(Effinciency)
2-Value Creation
(Effectiveness)

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An Example How BigData
Changes Business’ Models
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
How ZipCar’s changed car sharing Business Model
Source: MIT Sloan: Management Review, «Video: What DigitalTransformation Means for Business»

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Value Chains Network and…
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
RISK:
New Disruptive Business Model = A Disrupted
Supply Chain

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A BigData initiative method to
anticipate things…
…how to survive from disruptions?
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
NEEDS
BigData
(IT)1- Automation
(Effinciency)
2-Value Creation
(Effectiveness)
Why NOT NPD?
PUGH Matrix QFD Matrix KJ Method
New Product Development
Source: I.Gruer, «IT and Procurement: Opportunities and Implementation of
New analytics thecnology fro BigData»

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Is «BigData» different from Business Intelligence tools? (‘90s)
What has changed in the economic enviroment (technology)
from ‘90s to present?
BigData & Supply Chain… So What?
Fuel for Innovation: Data, Information and ICT Tools in the Supply Chain
Contact Info
Mail: ivan.gruer@gmail.com
it.linkedin.com/in/ivangruer/

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