What Can Logisticians Learn from Emergency Room Doctors - The idea of "Thin Slicing"

I have read a lot about "control towers" and "big data" lately as I am sure many of you have.  This has led me to ask myself, "What will I do with all that data"?  More so, I also ask myself, "does more data really result in better decisions or does it get in the way  - create so much "noise" that I cannot even see what is really going on"?  In previous times we would ask ourselves if we could see the forest through the trees?

Back in 2011 I had actually wrote about the idea of control towers and said I was a big fan - as you can see my ideas and thoughts are "maturing".

As I thought about that question I was also, luckily, listening to the audiobook called Blink by Malcolm Gladwell ( of Tipping Point fame) and he talked about how too much information can, indeed, get in the way of good decisions.  In an example of the Cook County (Chicago) emergency room he talked about the idea of "thin slicing".  Thin slicing is the idea of taking just a few critical points of data and using those to make swift and accurate decisions.  Let's follow his example of the emergency room.

Before thin slicing, if a person came to the ER with chest pains (a very common issue in emergency rooms around the country) the doctors, nurses and technicians would run a battery of tests - height, weight, blood pressure, etc. etc.  Tons of tests and the idea was to get as much data as possible - Big data".  However, the success rate of diagnosing whether those chest pains were in fact a heart attack or were they just something else less important was not very good.

So they tried something different.  What they did is reduce the amount of data the doctor saw.  They realized most of the tests and the data coming from those tests were just noise and were not pertinent to the decision of whether the chest pain was a heart attack. In Gladwell's own words:

One of the stories I tell in "Blink" is about the Emergency Room doctors at Cook County Hospital in Chicago. That's the big public hospital in Chicago, and a few years ago they changed the way they diagnosed heart attacks. They instructed their doctors to gather less information on their patients: they encouraged them to zero in on just a few critical pieces of information about patients suffering from chest pain--like blood pressure and the ECG--while ignoring everything else, like the patient's age and weight and medical history. And what happened? Cook County is now one of the best places in the United States at diagnosing chest pain.

By reducing the amount of data provided, the doctors actually were able to make better decisions.

What does this have to do with logistics?  I am consistently inundated with requests and ideas on Big data, collecting tons of data, control towers to see "everything", full visibility etc. etc.  and I ask myself, do I really need all that data and if I had it what would I do with it?  Then I come back to this example above and see the real secret in all this is not big data but pertinent and actionable data.  In fact, I am starting to think big data may be a front for intellectual laziness.  Because a logistician can't figure out what they really need they just say "let's capture everything".  And, of course, software providers are quick to jump on as Big Data translates into Big Sales and Big profits (first few hits on google when I queried Big Data and logistics were from SAS and Oracle).

My lesson is this:  Take the time up front, a lot of time, to determine what you really need, what will really give you the signal you need to determine what is going on, and what you need to actually do something.  Take the rest of the data and throw it away - not only is it noise but because it is so noisy and full of static it will actually slow down your decision making rather than speed it up.  Big data may actually not only be a waste but it could actually be harmful.  So much data will drive you to be parallelized versus taking action.  The article I cited above about control towers brags about collecting "mountains of data". - I don't need mountains, I just need the vital few.

It turns out, we logisticians have a lot to learn from emergency room doctors.

Yet, Even More Supply Chain Predictions

It is that time of year again when the supply chain (and other) predictions come out.  The really smart people keep them broad enough so, like a fortune teller, they cannot possibly be wrong which is why I do not necessarily believe in this type of crystal ball.  However, as I said in my previous post on the IDC predictions, it is good to get all this into one area so as you build your 3-5 year strategies, you can incorporate these broad directional ideas.

Today, we get a guest column on Forbes.com from Mark Woodward who is the CEO of E2Open, entitled: 5 Supply Chain Predictions for 2013, The Year of The Network. Given he is a CEO of supply chain technology firm, you can expect his predictions to be both centered around technology and offering up technology as solutions to problems.  Nevertheless, this is a very good list and I reprint it here with some of my thoughts:

1. Fast Data Will Become The New Big Data -   I know I promised not to use the term "Big Data" anymore as it has become the most overused term in the fastest amount of time of any business buzzword I know.  However this is an interesting twist which is big and fast are critical elements of a successful data management plan.  The speed with which you share and collaborate using accurate data is at least as important (and maybe more) as just the shear volume of data.
   
2. The "Social Supply Chain" Will Transform How We Work - Don't confuse your view of "social media" (i.e., your experience with your kids on Facebook) with the social supply chain.  The social supply chain, as written about extensively by Adrian Gonzales (Quickly becoming "the" expert on this topic and wrote this great blog post about why companies were not using social media in their supply chain) is about open collaboration, problem solving and open source dialogue about issues relating to supply chains.  As stated in this article, demand sensing is really part of the idea of the social supply chain.
   
   The one concern here is if companies really do compete on supply chain efficiency as much as they do on the product then we have to ask ourselves how far collaboration will really go in the open social world.  Some firms, like Apple, which consistently get high remarks for their supply chain efficiency are notorious for being closed up like a vault when it comes to collaboration and sharing outside of their own supply chain ecosystem.  A quick posting on this idea of companies competing on supply chains can be found here at: Businesses Don't Compete: Supply Chains Compete.
   
3. Supply Chain Control Towers Will Transition from Concept to Adoption - This I completely agree with and the time is now for this type of operation.  Control towers are a requirement for really dynamic supply chains to adjust to ever changing market and environmental conditions.
   
   This does not have to be a complicated IT solution either.  A great control tower, using lean methods and the idea of visual management can consist of white boards, manual tracking and the use of forward indicators of data.
   
4. Dynamic Cost Will Transform Decision Making - The idea of a static standard cost which gets adjusted once per year is dead.  It is a relic of times gone past when that was all our systems could handle.  Costs and the macro economic environment change far to frequently and quickly to allow you to not have accurate, fast and transparent costs into your supply chain. Transparency of costs is critical to accurate decision making.  The next time a supply chain partner tells you that you do not have to worry about this I suggest you hold on to your wallet.  A true partner would want accurate and transparent cost data so you can make the right decisions quickly and accurately (notice the them on costing:  Fast, Transparent and Accurate).
   
5. Risk Management Will Move From Static to Dynamic - I have written about risk and resiliency a lot recently so I will not rehash it here however suffice it to say the same theme applies in terms of dynamic, fast and transparent.  

As with other predictions, I am not sure if "this is the year for... " or not, however the ideas set forth by Mr. Woodward are fantastic and clearly the ideas all supply chain executives should be thinking about and balancing as they work towards transforming their supply chains to meet 21st century challenges. 

Taking a Control Tower Approach - Article from Supply Chain Management Review

Taking a Control Tower Approach - Article from Supply Chain Management Review

I am a big fan of the "control tower" idea and think it is absolutely a necessity. Whether you outsource it or not is an entirely different question. Outsourcing is a decision concerning what the core competency of your company is and where you want to put your capital to work. A manufacturing company who has a core competency in manufacturing may choose to outsource logistics. A retailer who believes their competitive advantage is logistics may choose not to.

Either way, you should embrace this control tower concept. It is an idea which has seen many lives over my 20+ years of logistics experience and it keeps getting better with age and technology.