Application of the Shewhart Philosophy and Methodology to Create Insights from Analytics

• Activity Number: 2
• Type: Invited
• Date/Time: Sunday, July 29, 2012 : 2:00 PM to 3:50 PM
• Sponsor: SPAIG Committee
• Author(s): Chris H. Holloman*+ and Thomas A. Bishop and Wes Hunt
• Companies: The Ohio State University and The Ohio State University and Nationwide Insurance
• Keywords: Analytics ; Shewhart's theory of chance cause systems of variation ; Actionable insights

Abstract

A fundamental component of the Nationwide Mutual Insurance Company management strategy is the use of analytics to create insights which serve as a rational basis for action to positively affect future business investment decisions. Nationwide has partnered with the Ohio State University to develop a problem formulation and data analysis strategy based on the application of the theory of chance cause systems of variation created by Dr. Walter Shewhart and championed by Dr. W. Edwards Deming. Dr. Shewhart gave us a new lens with which to formulate business problems involving complex data based on the application of his concept of rational subgrouping. His problem formulation and analytic methodology are not mathematically complex, but are profound in terms of creating practical customer and operational insights and predictions leading to more timely and effective actions. In this session we describe how the Nationwide Center for Advanced Customer Insights at the Ohio State University and Nationwide have used this methodology for the efficient creation of actionable insights from complex data, and we illustrate the approach in several business applications.