It’s no surprise that we are TARTLE are big on data and using it to improve lives all over the world. By collecting and analyzing quality first party data processes can be refined and better decisions made.
One famous example of this is Domino’s Pizza. Years ago, the Michigan-based pizza giant was on the ropes. Once the leading name in pizza delivery, they were losing market share to others and getting bad reviews on their pizza and their delivery times. They went from the king of the mountain to sliding fast towards the valley.
What did they do? They realized they had to take a hard look at all of their processes and possibly make some very hard choices. To do this, they developed their pizza tracker program, tracking the whole process for each pizza from order to delivery. Looking at the data gained from that software, Dominos identified a number of inefficiencies, inefficiencies that they had to fix to get back on top. Altering their mentality to treat the pizza making process like a manufacturing process, the company completely revamped its business. The process was more efficient and they were able to deliver better, fresher pizzas faster than ever before. As a result, Domino’s is once again climbing the mountain and rebuilding its reputation.
That success story unfortunately isn’t every story. The other side of the coin is represented by an incident featuring America’s biggest big box store, Wal-Mart. Sam Walton’s company has been big on using data to optimize its profits for years. Because of this, they noticed that Vlassic pickles were selling remarkably well. What’s more, they figured that they would sell even better if they could get them down to a lower price point.
They contacted Vlassic to ask if it was possible and after the supplier crunched all their numbers based on their down data, they got close enough to make the bean counters at Wal-Mart happy and the order was placed. Everyone wins and we have another success story about the power of data analytics, right? Wrong. Instead of a raging success, this seemingly smart move was a disaster. Pickles indeed flew off the shelves, until they weren’t on the shelves anymore. What happened? The farmers that grow the cucumbers in the first place simply couldn’t keep up with the demand that was getting placed on them. With no pickles to put on the shelves the orders were cancelled or significantly reduced. That compounded problems for the farmers, especially those who would have bought new equipment and altered their own processes in order to meet the sudden increase in demand. Then all of a sudden that demand fell through the floor again, meaning that the farmers wouldn’t be able to recoup all those costs.
So what went wrong? Why did a reliance on data and the in depth analysis of it lead to success for one company and a major loss for another? It was a difference in approach. Domino’s didn’t just go over their procedures or have a couple teams demonstrate their process for the board. They went into many of their stores, working with the employees and analyzing how their pizzas were made. They also paid attention to their customers so they knew what it was they had to focus on improving. In short, they listened to everyone that mattered most in the process and worked with them to find the best possible solutions to everyone’s concerns.
Wal-Mart seemingly did the same thing. They knew what their customers wanted, knew they would be even happier with a lower price and worked with Vlassic to order more pickles at a lower price. But they forgot to talk to the real suppliers, the farmers that are pulling the product out of the ground in the first place. Granted, this need not always be a concern. A single store isn’t going to strain the system. However, given the number of stores Wal-Mart has and the volume of product they move, talking to the farmers is a necessary step.
What these two examples demonstrate is the necessity of remembering that even the most scientific data analysis has to be about people first and foremost. Keeping that in mind means you not only achieve financial success for yourself, you will improve the lives of others in the process. Forget that and you will do harm you never intended.
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