New solutions for a new world
How a core analytics team changed decision making at Dow Chemical
In his 30-year career at The Dow Chemical Company, Chief Information Officer Dave Kepler has seen upheavals in technology, the chemical industry and global markets – and has helped the company successfully navigate these massive changes.
"If you think of the mega-trends impacting the chemical industry, the first is the customer, driven by their consumers – and that's shifting where our company needs to be positioned around the world. The need for new sustainable products is shifting our business focus as well," Kepler explains. "We're moving from a company that was really focused on execution around product to one that's engaged with the customer, looking at new solutions for them and therefore solving some of the big challenges of the world."
How they do it at Dow
Dow's 'Center of Excellence' approach
The company sponsors an Analytics Day each May to introduce Dow employees to some of the unit's projects. "We've had a noticeable increase in project requests since then," says Tim Rey, Director of Advanced Analytics.
That shift has helped the company grow to $53 billion in revenue, despite the lingering global financial doldrums. One of the keys to its success? "Analytics has really helped us in markets where we're trying to predict where the demand's going,'' says Kepler.
"Our historical patterns are changing. We need to use analytics to bring multiple variants in, aside from (historical) supply and demand patterns, to understand and predict demand,'' says Kepler, describing the company's tactical shift.
Becoming an analytical organization
"To me, that's what an analytical organization is: one that focuses on internal and external information – not just relying on the experience and history of the past," says Kepler. "Doing that in a few key areas showed the value of analytical tools and techniques, and created a base we could build on."
Out of those early analytical successes, Kepler built the Business Services Group; one of its attributes is a centralized group of analytic experts who are a resource for all of Dow. When any department at Dow has a complex problem in need of analysis, it comes to Business Services for answers.
How they do it at Dow
Don't get hung up on achieving a perfect data environment before engaging in analytics
"In addition to embedding individual analysts into business units across five portfolios, we built a core analytic group that can extend and enhance this expertise across all areas of the company – research, supply chain operations, manufacturing, marketing – bringing the right skills to help the business unit make better decisions," says Kepler.
"We ask questions like how big and complex is the information set you're working from? How much experience do people in this space have working with information? Sometimes modeling and other projects fail because you just don't understand holistically how to approach the problem. Most of analytics involves working with large sets of equations and data; you need to make sure collectively you get the right equations on the table to work on," he explains.
How they do it at Dow
Using analytics to model new products
Kepler's words of wisdom
In his years at Dow, Kepler observed that the success or failure of new technology was rarely attributed to the technology. More important was the way the technology was introduced. His advice to companies seeking to become more analytical, or introduce any new technology, is to focus on training, setting metrics for success and communicating what the new tools can do.
Kepler also has a list of criteria he applies to determine when new technology makes sense and when it doesn't. "There are four success factors. One, is there a clear strategic alignment with what the company's trying to do? Two, does senior leadership get it? Three, do you have the right program structure in terms of project managers, leadership, subject matter experts to implement it? And four, do you have a good benefit story that you're going to measure and track? If you've got those four components, you probably have a successful project."
As for next steps? Kepler affirms that Dow needs analytics to stay ahead. "The competitive advantage that companies are going to have going forward is making better decisions than other companies,'' says Kepler. "How you collect data and how you make decisions off that data is what's going to differentiate you from your competition. In the next 10 to 20 years, businesses that know how to harvest and use that information will be in the forefront. And we want to be at the forefront.''
This story appears in the First Quarter 2012 issue of