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Does big data deliver? Just ask Ford Motor Company

Posting in Technology

The idea of competing on analytics is a vision that has fascinated business leaders for years, but it's been challenging to determine the actual impact on their bottom lines. Now, there's proof beyond a shadow of doubt that a data-driven culture delivers -- a turnaround story from one of the world's biggest manufacturers.

Ford Motor Company, which scraped through the 2007-2009 recession, has become one of the world's largest and most most profitable automakers. A big piece of this amazing comeback is due to the company's judicious use of data.

In a recent ComputerWorld report, Julia King documents how Ford now lives, breathes, eats and sleeps data. As she describes it:

"Data and analytics permeate every business move that Ford makes, from forecasting the price of commodities to figuring out what consumers want, what the company will build, where it should source parts and how to power its lineup of cars and trucks."

Sometimes, management's back needs to be against the wall before it opens up to new ideas and approaches. Ford's team of 200 data scientists and analysts have had the ear of upper management since 2007, when the entire auto industry began its descent into the depths of despair. In the most recent quarter, Ford's revenues were up 12%, following a 15% boost in the previous quarter and 10% in the quarter before that. 

At the core of Ford's success over the past five years is the company's "Smart Inventory Management System," which bases analytics on multiple data streams, including cars sold, customer search preferences, and broad economic data such as employment and housing starts. Everything is measured to stay on top of market trends and preferences.

Areas of discovery for Ford from its data include ascertaining what customers want, managing vehicle complexity and delivering the right cars to dealerships, King writes. Data even comes in from an opt-in program among hybrid vehicle owners, which provides details on how the cars are used -- useful information in planning future models and features.

— By on December 8, 2013, 8:56 PM PST

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure