"Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep." - Scott Adams
What do you think? Does data analysis crush creativity in logistics? We recently came across an article that prompted us to ask that exact question.
So, let's start simple. What is the definition of data analysis?
Business dictionary.com defines it as:
"The process of evaluating data using analytical and logical reasoning to examine each component of the data provided."
In the modern world of logistics and manufacturing, data analytics is king. Every book, article, webinar, and workshop prompts us to dig into the data.
"What does the data tell us?" becomes the mantra of the decision-maker.
Don't get us wrong! Data analytics is important, and has the potential to save companies millions of dollars. We live in the world of IoT. Everything is interconnected, and key correlations can be discovered by analzying data. But what if we become so analytical that we don't use creativity and intuition to make solid decisions and changes for the better?
Does data analytics crush creativity?
It's like Scott Adams' quote says: "Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep."
The root of data analytics is precision. But if you rely solely on what the data tells you, when do you have the opportunity to learn from your mistakes?
The analytical nature of logistics does not exclude creativity.
We came across this article by Matt Palmquist in Strategy-Business.com: For Innovators, a Drawback to Data Analytics.
The main point of the article can be summed up by this excerpt: "Number crunching can be valuable for firms exploiting their existing resources, but can backfire for companies seeking to branch out with new products or services."
Palmquist makes a good point. Data analytics in the logistical world is great for discovering areas in our processes that need improvement, as well as helping monitor our progress. The key in logistics is what we do with that analysis.
What kind of insight can we get from these analyses? In the end, it comes down to what we make of it.
Creativity comes into the equation as problem solving, and it's at the root of how we continue to improve our processes. As logistics professionals, we must never forget to be imaginative in our approach to problem solving, and data analysis technology is simply a tool to amplify the postive impact of our creativity.
Palmquist references a scientific study in his article, entitled How Do Data Skills Affect Firm Productivity: Evidence from Process-driven vs. Innovation-driven Practices, by Lynn Wu and Lorin Hitt from the University of Pennsylvania.
Wu and Hitt put companies into two catageories: companies that prized innovation and exploration (which they called innovation-oriented), and those that sought to streamline their production processes and exploit their existing resources (which they called process-oriented).
They discovered that companies that base their business models on incremental improvements to existing products or processes can find significant benefits to relying on data. However, innovative, forward-thinking companies should not rely as heavily on data analytics.
"Overall, the authors found, the level of number-crunching expertise in the workforce doesn’t seem to correlate with firm performance. But the use of analytics does help firms that have a process-oriented outlook."
The researchers found that a higher capacity for data analytics can actually reduce the performance of innovative companies. In other words, innovative companies should not always rely on the data if they have a strong intutaton for a decision on a breakthrough. If the company wants to make small incremental changes, however, it's a different story.
The authors did point out that data can be powerful for firms that focus on process-related decisions because the rationale for choices can be backed up by hard numbers.
Palmquist points out that the iPad would have never been created if Steve Jobs had trusted the market research that was placed in front of him. Until then, most consumers and media analysts were skeptical about the idea of tablet computers because, until that point, many attempts had failed. Sometimes people's perception of what's possible is dependent upon what they've experienced. Creativity allows us to see what is possible.
Data analytics can help us to see what is wrong in our supply chains and manufacturing, while creativity allows us to see how we can make it better.
