Is Model Based Reasoning Right for You?

If you’ve never heard of Model Based Reasoning (MBR), your first thought might be: isn’t all reasoning “model based”? And on learning that MBR is a form of artificial intelligence, your second thought might be: who would trust AI to do a human job like “reasoning”?

MBR clearly has to cope with some unfortunate and confusing labels. But that hasn’t stopped service organizations around the world from using it, profiting from it, and vouching for it in impressive numbers. Every aftermarket service professional should know what it is, and how they stand to benefit.

Put simply, the desktop of a human mind is small and rickety. We may master a large body of knowledge, and may be able to recall most of its parts, given enough time and prompting. But given a few ambiguous symptoms, only the most capable and well-trained humans can summon all the relevant facts and principles, and make a sound inference in a short time. That’s precisely why Sherlock Holmes, and characters like him, seem superhuman. They think on a sprawling mental desktop, where information can be gathered, sorted, and assembled with astonishing speed.

Instead of a desktop, the rest of us have something like a writing slab in an old lecture hall. It’s barely large enough for a single notebook, and barely stable enough to take notes on. It can be expanded, but only with rare talent or expensive training. Otherwise, when making a diagnosis, we’re forced to scrutinize one possibility at a time. This is what leads to “linear reasoning” – an unreliable and slow approach, where the possible causes of each symptom are individually considered, usually in an arbitrary order. Service providers who rely on linear reasoning have to tolerate longer Mean Time to Repair, and absorb larger losses from device downtime.

Model Based Reasoning is a popular shortcut. With MBR, service experts can codify their knowledge, so that a program can apply all of the facts, in unison, to a set of symptoms. This “brute force” approach means a lot of work for the computer, but luckily that’s what computer are for, and so far they haven’t complained. With this “non-linear” technique, technicians can overcome the limitations of human memory and attention, quickly computing what the present symptoms mean, what the absent symptoms mean, and what possible malfunctions are left. MBR does the work of a large team of human workers through a single program, sifting through the possibility space, and leaving a small set of suspects for the technician to investigate.

Needless to say, MBR’s applications are varied, and its benefits widely recognized. MBR has proven invaluable in Guided Troubleshooting, Diagnose before Dispatch service, Remote Diagnosis, and Design for Service testing. Nearly all companies surveyed said that their use of MBR had reduced diagnostic time and improved service productivity. For aftermarket service professionals who deal with complex product failures, devote inordinate time to troubleshooting, have little service history on which to base diagnoses, work with frequently updated products, or conduct remote or automated diagnoses, MBR platforms may be just the ticket. To help you find an MBR platform for your aftermarket service needs, there’s always Blumberg Advisory Group. See our latest whitepaper on MBR, or schedule an appointment to decide what MBR solution is right for you.


What the Nobel Prizes Teach Us

STOCKHOLM: Nobel Prize Award Ceremony 2010.

The practicalities of running a business might seem worlds away from a black tie ceremony in Stockholm. But the top performers in any endeavor can teach us about success in all endeavors, and science is no exception. In science as in Aftermarket Service and Reverse Logistics, goals can be stifling, and curiosity can be the driving force for progress.

Why take cues from science? Simple: to do good science is to be a good manager, businessman, and collaborator. And business can’t thrive without an empirical foundation. Business may sound like the land of goals and agendas, and science the land of curiosity and tinkering. But scientists have to write proposals and give performance reports like anyone else, and the burden is on business professionals to say how they’ve gained an intellectual edge over the competition. Amid smart and driven competitors, the sheer desire to increase profits doesn’t cut it.

Even if you buy the comparison, you may not agree that curiosity is “the driving force” behind science and business. But many Nobel laureates would. Two of them, Steven Chu and Thomas Cech, just wrote an op-ed on the importance of federal research funding for basic science. Neither they nor many of their fellow honorees had lofty expectations for their prize-winning work. Many had those expectations for other projects that never bore fruit. All shared a readiness to pursue what looked interesting, despite their early instincts about what was important, and in the process stumbled on research programs that made them famous. Success in the Aftermarket Service and Logistics industry is little different. Game-changing insights rarely come from the search for game-changing insights. More often, they come from a desire to understand how the industry really works, and why.

Curiosity may not kill the cat, but can that really mean that goals are toxic? Who ever succeeded at anything without the desire to have an impact?

No one can object to broad aspirations; it’s when goals get specific that “tunnel vision” can form. For every success story based on curiosity and serendipity, there are countless forgotten efforts based on a rigid objective. The “funny stories” behind the discovery of DNA, the invention of antibiotics, and countless other modern breakthroughs stand in stark contrast to the “agenda driven” science that used to be the norm. For almost four millennia, alchemists struggled to turn lead into gold, and to brew drinks that could abolish aging. Given infinite time, they might have succeeded. But given only the better part of human history, millions of lively minds made essentially zero progress toward their all-consuming goals.

Without a willingness to change the subject, a healthy respect for theory and argument, and an interest in why old efforts failed, almost no problem is tractable. How many businesses have gone belly-up, despite their stated goal of dominating the industry? And how many pulled ahead because of their genuine interest in how the industry works? Idea-driven management may well be “how to succeed in business without really trying.”

Granted, “pulling ahead” is a tough objective, no matter how great the idea.  Those who succeed often have much more than just a good idea.  They have precise plans, blueprints and maps to help them get to where they need to go.  Still struggling with how you are going to pull ahead and achieve breakthrough results?  Try looking below the surface of the Aftermarket & Reverse Logistics Industry, and learn how things really work.  Schedule your strategy session today to see this wisdom in practice.


Breaking the Knowledge Bank


There must be a special thrill in watching your ideas become cliché. Few could better speak to that thrill than Daniel Kahneman. In 2002, the legendary psychologist was honored with a Nobel Prize in Economics. His achievement: showing the world that economics has lost touch with the social realities that it claims to describe. (And they say the prizes are political.)

To his list of accomplishments, Kahneman can add the fact that many of his findings are now “obvious.” Someone who announced to a present-day board of executives that “Humans are inherently risk averse” might be greeted with nervous laughter and worried stares. Almost everyone knows that the statement is well-supported and universally accepted, and most know what it means. People are not rational optimizers of profit, because they would rather avoid a loss than pursue an equal (or greater) gain. If Deal A guarantees you $20, and Deal B gives you 80% odds of gaining $30 with 20% odds of losing $10, wouldn’t you take Deal A? If so, you’d be “predictably irrational”: deal B nets you $22 on average.

But what we know to be true doesn’t always touch our outlook. Our loathing of loss still distorts our perception of change. An executive faced with a market disruption and teetering profit margins might know that the loss is reversible, and still long for the bygone days of steady earnings. Strangely absent is his relief that the stagnant, limiting order of the status quo no longer applies, creating a rare window for mobility, and a fleeting chance to push performance higher than the old market would have allowed.

This bias can be conquered. The first step is to make a habit of internal disruption. If you play with each new practice and gadget on the horizon, you’ll soon see how each innovation reveals a new direction for growth. “How will we keep up with the people who use this?” becomes “How have we not been using this?” Once that instinct is developed, external disruptions will engage it too, and fear of decline will give way to relief at movement.

Yet all too often, companies that practice internal disruption mistake the part for the whole. They fixate on “information technology,” and equate innovation with new software, hardware, and devices. Information technology is far broader than that: it encompasses the systems, protocols, and practices that allow for the transmission of expertise. In short, it encompasses Knowledge Management (KM).

Anyone who thinks that KM is taken care of by language and writing doesn’t fully grasp the challenge. Language and writing are data compression systems, in which dense networks of causation are hacked apart, and arranged on the straight line of time. What we call “factual” knowledge, or “knowing that,” consists of segments on this line. “Procedural” knowledge, or “knowing how,” consists of reassembling those segments in conceptual space, and learning your way around the finished network. It is the difference, in short, between knowing that humans are naturally risk averse, and training yourself to be a human who isn’t. The second takes time, and doing it slowly may cost the economy billions.

When we come back, we’ll tell you how to pass on your knowledge network in a few fast, manageable chunks. When you make a habit of disruption, and learn to disrupt the way your knowledge is managed, your company will be prepared to seize the opportunity in each risk. (If you’re impatient, schedule a consultation today.)


3D Printing and You


You may be sick of hearing about technological “disruptions.” The coverage can sound like a paperboy selling ten-year-old headlines, and the forecasts can sound like shots in the dark. (Informed and accurate forecasts, of course, make no public sound at all.) It’s almost a Yogi Berra-ism that the real disruptions are the ones no one saw coming.

That said, you may want to make an exception for talk of 3D printing. It’s an old concept, but its disruptive potential is approaching a pivot point, and some high-performance models are poised to become standard household amenities. Whether 3D printing will really spark a new industrial revolution, reverse the tide of globalization, or pave the way for anarchy are open questions. That it will render many forms of manufacturing obsolete is barely in question. The real questions are “Which ones?” and “How should manufacturing, logistics, and service professionals adapt?”

Some might opt for denial. “Determined and clever individuals have been mass producing stuff for more than a century. 3D printing is just one extra tool.” Not exactly. With 3D printing, tricky and labor-intensive manufacturing processes become brainless and hands-off. The user doesn’t have to be determined or clever, and that could mean a lot of new users. Neither does the user have to care about producing just one item en masse. On a whim, they can make anything their printer permits – en masse, or just once. Traditional manufacturing is a Gutenberg press; 3D printing is an inkjet printer spitting out ebooks from “Project Gutenberg.” Denying this qualitative difference, where it applies, could have truly disastrous consequences.

This doesn’t mean that the future is altogether bleak for affected industries. “Subtractive” techniques, which carve and stamp new shapes from bulk material, often yield superior results, and the repertoire of printable materials is limited. Technical barriers on either front could relegate 3D printing to niche applications. Even in domains where 3D printing replaces traditional manufacturing, corporations could continue to turn a profit by selling and regulating blueprints – summoning intellectual property laws and adhering to the model of ebooks and online journals.

For service and logistics professionals, the future is even less predictable. Consumers who can make their own spare parts would presumably have less use for aftermarket service, and might forego troubleshooting and up-front screening for fully printable goods. But the challenges of production, assembly, and maintenance might demand a range of new services, and could transform the scope and toolkit of  screening, testing, and repair of returned goods, to say nothing of service and support for the printers themselves.

The effects of a 3D printing disruption will likely be unique to each affected industry – and unpredictable in all. As we’ve already suggested, game-changing events are more easily prepared for as a whole. Few important market disruptions can be planned for years in advance, but experience with the general phenomenon of disruption can help us respond adroitly to new ones. At Blumberg Advisory Group, our job is to bring our experience to bear on your aftermarket service and reverse logistics challenges – including those posed by 3D printing. Schedule a consultation today to see how we can add depth to your service supply chain strategy.