Data Mining in Manufacturing & Process Industries

The use and application of Neural Networks (NN) has found a “home” in the domain of industrial process control. At the same time, NN is practically a core function in most popular data mining solutions. NN algorithms have been embedded in process control solutions, yet sometimes seen or even projected as a bit of a “black box” or “magic box”. Obviously, because of the complexity involved for most process control engineers to rationalize the output of an NN algorithm.

Root Cause Analysis (RCA) has traditionally been conducted by core statistical applications in order to identify cause of failure of plant equipment. RCA is classified based on the use or objectives as:

1. Safety-based RCA, which descends from the fields of accident analysis and occupational safety and health
2. Production-based RCA, which has its origins in the field of quality control for industrial manufacturing.
3. Process-based RCA, which is an “add-on” to production-based RCA, but with a scope that has been expanded to include business processes.
4. Failure-based RCA is rooted in the practice of failure analysis as employed in engineering and maintenance.
5. Systems-based RCA emerged as an amalgamation of the preceding uses, along with ideas taken from fields such as change management, risk management, and systems analysis.

More on Total Cost of Ownership for IT Systems

How to calculate TCO during a bid evaluation?
A TCO Index calculation method has been developed  using the adjacent figure. 
The model takes into account  all related costs to be accounted for in a bid evaluation. The model also considers Asset Lifecycle duration and management aspects.
The TCO Index is a normalized figure in order to ensure confidentiality of financial figures presented by bidders. 
There are two versions of the TCO Index calculation ... 
1) a detailed model, and 2) simplified version. 
A TCO Index example of 77.5 versus a base case of 100 for a lifecycle of 20 years is shown, in which lifecycle costs are allocated to CAPEX and OPEX types (e.g. acquisition, deployment, operation and support, retirement and replacement). 

The Total Cost of Ownership for IT Systems

The Total Cost of Ownership (TCO) for capital investments, as for example an IT system, is allocated to various cost components e.g. purchase/acquisition costs, operational costs, replacement costs, etc. 
Gartner and Forrester Research present some typical TCO figures as per the adjacent image. Both firms indicate the purchase cost being about >32% of the TCO. Given the asset lifespan period, the longer the lifespan, the higher the TCO in absolute figures, but the purchase cost as % of the TCO gets lower. That's why Life Cycle Management of IT assets is significant.
A key point of course is that the purchase/acquisition costs alone do not represent the most advantageous selection of a suppliers, from the financial point of view. It is the TCO Index. 
Calculating the TCO Index for each competitive bid in IT is quite analytical but worth the effort during evaluation of supplier proposals.  

RFM (Recency, Frequency and Monetary) KPIs can be key to any business for understanding customer behavior. Whether it is in the retail sector for tracking customer purchases, or in financial institutions tracking customer transactions, RFM scores and resulting KPIs can be the simplest, yet the most practical approach in getting more insight into customer analytics.
Generating RM scores versus RFM is even simpler and can be as sufficient in some cases, as this allows you to classify both customers and each transaction, purchase or customer visit individually.
Clustering of customers and transactions or purchases (see adjacent figure) can allow one to see significant patterns. RM can be specified as categorical or continuous, which, by itself, can contribute to different clusters identified.