What Makes a Company Successful at Using AI?
This article originally appeared in Harvard Business Review on February 28, 2022.
Vistra, a major U.S. power producer, had a problem. For its plants to operate efficiently, workers had to continuously monitor hundreds of different indicators, tracking temperatures, pressures, oxygen levels, and pump and fan speeds — and they had to make adjustments in real time. The process involved a huge amount of complexity, and it was too much for even the most skilled operator to get right all the time. To address this challenge, the plant installed an AI-powered tool — a heat-rate optimizer — that analyzed hundreds of inputs and generated recommendations every 30 minutes. Result: a 1% increase in efficiency. That may not sound like much, but it translates into millions in savings as well as lower greenhouse gas emissions.
Companies in a wide range of industries are trying to integrate analytics and data to improve their operations. Wayfair, the e-commerce company, was an early mover in shifting its data to the cloud and investing in machine learning. When Covid-19 hit, and rapid changes to consumer demand followed, it was able to optimize container ship logistics, continually adjusting what goods were sent to which ports. Result: an astonishing 7.5% reduction in inbound logistics costs.
