This week’s Economist magazine has a special report on the “the data deluge.” The report points out:
“According to one estimate, mankind created 150 exabytes (billion gigabytes) of data in 2005. This year, it will create 1,2000 exabytes. Merely keeping up with this flood, and storing the bits that might be useful, is difficult enough. Analysing it, to spot patterns and extract useful information, is harder still. Even so, the data deluge is already starting to transform business…”
The article notes that the retailers are one of the leaders in amassing this data. For example:
“Wal-Mart, a retail giant, handles more than 1m customer transactions every hour, feeding databases estimated at more than 2.5 petabytes.” (A petabyte is 1m gigabytes)
Of course, this article fits nicely within IBM’s Smarter Planter. Smarter Planet’s big ideas are that the world’s systems will be instrumented, interconnected, and intelligent.
In IBM, the group behind this blog works on solutions to help firms make more intelligent decisions with this data. Often, due to the number of possible choices, optimization-based technology is the only way to get value from the information you’ve collected.
For example, for retailers we’ve worked with, they have taken advantage of the data in a variety of ways:
1. Determining what items should be stocked at a store, how the store should be laid out, and where the SKU’s should be on the shelf—this helps retailers increase store revenue and profitability.
2. Determining how the warehouses and stores should best be replenished, how the workforce should be scheduled, how products should flow through the supply chain, locating the warehouses, and routing trucks--- this helps retailers take costs of their supply chain.
In each of these cases, simply analyzing the data was not going to be good enough to extract value from it to give the retailer a strategic advantage.