2009 INFORMS Practice Conference
INFORMS
April 26-28, 2009    Sheraton Phoenix Downtown   Phoenix, Arizona
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THE BEST OF APPLIED ANALYTICS

featuring
2009 Edelman Competition and Awards Gala
INFORMS Prize
Daniel H. Wagner Prize

Edelman Awards Ceremony & Banquet
This is your opportunity to salute the finalists and winners of three prestigious applied OR awards: The Edelman Award, the INFORMS Prize and the Daniel H. Wagner Prize. Admission to the ceremony and banquet is included in your registration fee.

Take a look at 2008 Edelman Award highlights.  »

2009 Edelman Competition
Sponsored by CPMS, the Practice Section of INFORMS
Thanks to our Sponsors
Georgia Institute of Technology       P&G      SAS
Edelman Competition

 

Six finalists will compete for the top prize in this “super bowl” of OR practice, showcasing analytics projects that had major impacts on their client organizations. The competition takes place on Monday and is open to all conference registrants. That evening, we honor the finalists and announce the 2009 winner at the gala awards ceremony and banquet. Admission to the ceremony and banquet is included in your registration fee. On Tuesday, the 2009 winning presentation will be reprised as a plenary session.

2009 Finalists:
• CSX Railways
• Hewlett-Packard Corp.

• IBM Corporation
• Marriott International

• Norske Skog
• Zara

Track 2, Monday
8:00am-9:00am
HP Transforms Product Portfolio Management with Operations Research
HP: Julie Ward, Bin Zhang, Shailendra Jain
Strategic Management Solutions, Chris Fry
HP: Thomas Olavson, Holger Mishal
Emeraldwise LLC: Jason Amaral
M-Factor, Inc.: Dirk Beyer
HP: Ann Brecht, Brian Cargille, Russ Chadinha, Kathy Chou, Gavin DeNyse
McCombs School of Business, Univ. of Texas at Austin: Qi Feng
HP: Cookie Padovani
DSApps, Inc.: Sesh Raj
HP: Kurt Sunderbruch, Robert Tarjan
Intuit: Krishna Venkatraman
HP: Joseph Woods
Belk College of Business, Univ. of North Carolina at Charlotte: Jing Zhou

HP offers a wide spectrum of innovative products to meet diverse customer needs. While this has helped the company achieve unparalleled market reach, it has come with significant costs and challenges. HP developed two powerful OR-based solutions for product variety management that address the diverse needs of its businesses throughout their products’ lifecycles. The first uses custom-built ROI calculators to evaluate each proposed new product before it is introduced. The second, HP’s Revenue Coverage Optimization (RCO) tool, is used to manage product variety after it has been introduced. By identifying a core portfolio of products most important to order coverage, RCO enables HP businesses to increase operational focus on the most critical products in their offerings. Using these tools, HP achieved over $500M in profit improvements across several business units since 2005. HP also streamlined its product offering, improved execution, achieved faster delivery performance, lowered overhead, and increased customer satisfaction and market share.

 

9:10am-10:00am
Marriott International Increases Revenue by Implementing a Group Pricing Optimizer

Marriott International: Sharon Hormby, Julia Morrison, Prashant Dave, Michele Meyers, Tim Tenca

Marriott has a 20-year history of successfully applying revenue management to individual bookings. Group Pricing Optimizer (GPO) represents a significant extension. GPO, a dynamic real-time pricing system, provides robust guidance to sales personnel as they negotiate pricing of hotel rooms for group customers. The system employs demand segmentation, price elasticity modeling and optimization techniques to recommend an optimal rate. In operation since late 2006, the system has improved revenue for hotels by an annual amount of at least $46m. It also has enhanced the sales process for both sales managers and customers. Contracted business that has been priced using GPO since its implementation is over $1B.

 

10:30am-11:20am
Norske Skog Improves Global Profitability Using Operations Research

Norske Skog Tasman: Graeme Everett
Norske Skog: Kjetil Vatn, Rune Gjessing
University of Auckland, Andy Philpott

Many businesses face uncertainty about demand in the face of economic recession. Global paper maker Norske Skog is familiar with this, as the company has experienced declining demand for its products due to electronic media replacing printed publications. OR models have become a vital part of the decision making process, helping the company to reduce costs and enabling senior managers to make difficult decisions. The suite of MIP-based decision tools at Norske Skog was developed to optimize manufacturing, distribution and sourcing of raw materials in Australasia. After becoming a part of Norske Skog in 2000, the methodology was further developed for use in global operations. The tactical use of the models resulted in savings of $8 million US and $10 million US annually in Australasia and Europe respectively. In 2008 the model was used to contribute to a strategic decision to close two paper mills and a paper machine, saving $100 million US annually.

 

11:30am-12:20am
Zara Uses Operations Research to Reengineer Its Global Distribution Process

UCLA Anderson School of Management: Felipe Caro
MIT Sloan School of Management: Jérémie Gallien,
Zara/Inditex S.A.: Miguel Díaz, Javier García, Jose Manuel Corredoira, Marcos Montes
Carrefour S.A.: José Antonio Ramos
Dell Inc.: Juan Correa

Zara is the world’s leading fast-fashion retailer. Overcoming significant technical difficulties, Zara recently deployed a new process relying extensively on sophisticated OR models to determine every single shipment of inventory it sends from its two central warehouses to its 1,500 stores worldwide. An innovative feature of the model implemented is the joint optimization of the shipments of individual sizes of the same article, reflecting size-related store display policies. Through a rigorous controlled field experiment, the authors estimate that this new process has increased sales by 3-4%, corresponding to an estimated realized impact of approximately $233M and $353M in additional revenues for 2007 and 2008, respectively.

 

2:00pm-2:50pm
CSX Railway Uses OR to Cash in on Optimized Equipment Distribution

University of Dayton, Michael F. Gorman
CSX Transportation: Dharma Acharya, David Sellers

Each day, CSX Railway allocates hundreds of empty railcars among hundreds of customer car orders. In 1997, CSX implemented the U.S. rail industry’s first real-time, fully integrated equipment distribution optimization system, the Dynamic Car Planning system (DCP). DCP allows the global perspective of OR modeling to be seamlessly integrated into the field communication process for the assignment of empty cars to customer car orders. CSX estimates it saves over $51 million annually from the DCP system, totaling $561 million since its implementation. Additionally, CSX was able to avoid $1.4 billion in capital expenditure on additional railcars required to support its business due to a more efficient allocation of cars. Fewer railcars yields improved return on assets and reduced congestion on the CSX rail network. Other railroads have benefited from subsequently implementing similar systems. Public benefits include an estimated $600 million through improved highway safety, reduced congestion, pollution and greenhouse gases, and reduced general tax-supported road maintenance.

 

3:30pm-4:20pm
Operations Research Improves Sales Force Productivity at IBM

IBM Corporation, IBM T.J. Watson Research Center: Rick Lawrence, Claudia Perlich, Saharon Rosset
IBM Corporation, Business Performance Initiatives and Strategy: Matt Callahan, Matt Collins, Alexey Ershov, Shiva Kumar

In 2004, IBM introduced a set of broad OR-based initiatives designed to improve the efficiency and productivity of its global sales force. The first solution, OnTARGET, provides a set of analytical models designed to identify new sales opportunities at existing IBM accounts as well as non-customer companies. The objective of the second solution, the Market Alignment Program (MAP), is to optimally allocate sales resources based on field-validated analytical estimates of future revenue opportunity in each operational market segment. The development of both sets of analytical models, as well as the underlying data models and web sites used to deliver the overall solutions, will be described. The combined initiatives have resulted in a revenue impact estimated to be in the hundreds of millions of dollars annually.

 

INFORMS Prize
This prize is awarded annually to the company that effectively integrates analytics into organizational decision-making, and has repeatedly applied OR/MS principles in pioneering, novel and lasting ways. The 2009 winner will be announced at the Edelman Award Ceremony on Monday evening. On Tuesday, in the “Theories of Practice” track, representatives from the winning company will describe the analytics work that earned them this prestigious award. Previous winners include General Electric Global Research Center, Schneider National, Air Products and Chemicals, Procter & Gamble, UPS and other leading companies.

 

Daniel H. Wagner Prize for Excellence in Operations Research Practice
Sponsored by CPMS, the Practice Section of INFORMS
This prize emphasizes the quality and coherence of the analysis used in practice. Dr. Wagner strove for strong mathematics applied to practical problems, supported by clear and intelligible writing. The Wagner Prize recognizes those principles by emphasizing good writing, strong analytical content and verifiable practice successes. The competition is held and the winner is announced at the INFORMS Annual Meeting in the Fall. The 2008 winning presentation will be reprised at the Practice Conference on Tuesday, in a Methodology Tutorial presentation by Sean Willems, of Optiant and Boston University.

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