The value of mathematical optimization

We are launching Optimization4All, an optimization expertise hub designed to empower professionals and organizations with the expertise and resources they need to succeed in optimization.

Mathematical optimization (MO) plays a critical but unrecognized role in present societies. It drives transportation, schedules, pricing, logistics and supply chains behind the scenes. It is the backbone for optimized decision-making at companies, government institutions and other organisations. Although its impact is undeniable, it often goes unnoticed, leading to a lack of adoption. 

MO tools are like street lanterns. They illuminate our path, although we don’t realize it. Only when they stop working do we notice their importance. 

MO has brought tangible value for decades, yet has to receive the attention focused on more flashy technology like Generative AI (GenAI), self-driving cars and space travel. As long as MO remains an obscure niche, significant opportunities to increase efficiency across society remain untapped.

Optimization4All is an initiative that is aimed to increase awareness of the power of MO methods. With the launch of our online MO expertise hub, we create a space where businesses, academics, professionals, students, policy-makers and enthusiasts can meet to collaborate, learn and share knowledge. We are reinventing MO through collective innovation.

Market gap

Mathematical optimization has brought value to various industries but has yet to receive broad attention. In this section, we illustrate MO’s potential with numbers. Note that research often references the related and better-known field of Operations Research (OR).

1. From the 2023 PwC Digital Trends report: 53 % of Operations and Supply Chain Officers consider improving the speed and quality of decision-making necessary.

2. From the PwC 2023 Digital Trends report: 83% of Executives consider their supply chain investments not to have delivered expected results which is a key area to benefit from MO innovation. In 2024, this percentage was 69%.

3. From the PwC 2023 Digital Trends report: The most commonly cited challenges to integrating ESG into company supply chains were employees' lack of digital skills (80%) and the availability of data on digital tools (73%). This also illustrates the need for high-quality, open-source MO and OR tools.

4. The USA Bureau of Labour Statistics: OR Analyst is one of the top 20 growing professions in the US, with a projected growth rate of 23 %.

5. A McKinsey article states that optimisation techniques can increase throughput (by 10-15%), reduce costs (by 5-10%), and reduce CO2 emissions (by 10-15%).

6. The Supply Chain 50/50: Next Generation Talent report by Boom found that mentoring is the most independently sought-after resource for respondents.

The reason for the market gap

Understanding the market gap between MO’s potential and its adoption rate is essential to bridging it. We recognize various obstacles to increasing MO’s usage:

1. The two bridges which need better functioning:

   1. Between theory and practice: the gap between academia and industry prevents them from benefiting from each other.

   2. Between business and technical: the unclear communication due to a lack of common language between implementation teams and stakeholders is a major obstacle to the success of OR projects using MO.

      
      

2. The entry level to MO is high because its usage is highly complex.

   1. You cannot learn MO in a boot camp, as MO is more complex and time-consuming than data-driven AI methods. Where data-driven AI methods require large quantities of high-quality data, MO requires precise problem definition. Defining a problem and structuring it for a computer to understand is a complex process, requiring both a mathematical foundation and understanding of the problem in its business context. Illustrative is Gurobi’s 2024 report, which found that MO practitioners are highly educated (82% have at least an MSc), demonstrating MO's high entry-level.

   2. Adversity towards and fear of adopting MO solutions exist because their output is often counterintuitive. This contrasts with AI solutions, which create a sense of familiarity, as they tend to mimic human processes.

      
      

3. MO resources are hard to access.

   1. There is a lack of open-source software and tools. Available open-source software and tools would enhance the usability and accessibility of MO solutions. Still, it wouldn’t make it as accessible as ML, because MO always requires a stronger technical foundation.

   2. Expert knowledge is dispersed over various subfields and application areas. There are no centralized knowledge banks or large open MO libraries.

      
      

4. MO is difficult to market. Other tech fields have seen massive investments and media coverage. Statistics show MO deserves similar attention, but it is a hard-to-market field.

   1. MO's complexity makes it scary and unfamiliar. Its solutions can be counterintuitive and often require companies to make structural changes. MO offers no flashy products with quick outputs like GenAI does. However, where GenAI’s added value is still uncertain, MO brings long-term benefits. 

   2. MO is an ambiguous term. Various terms relate to the same or related areas, such as decision intelligence, planning AI,  OR, metaheuristics, decision AI, and constraint-based optimization.
      Furthermore, MO is often confused with Data Science and AI. Although MO can be grouped under these terms, it entails different tools and methods.

The solution

With our initiative, we aim to tackle the obstacles that MO faces to attain its full potential. Our online expertise hub, Optimization4All, will provide:

1. A knowledge base where hand-picked resources, such as software, books, recommended media,, coding challenges, case studies, and master classes, are gathered in a central place.

2. Tailor-made learning paths for different personae, like business professionals, students, practitioners, policy-makers, entrepreneurs and freelancers.

3. A community space to gather, learn and share with the broader MO and OR ecosystem, including networking events, mentoring opportunities and conferences. 

4. A voice for the MO community. Besides experts, we are content creators who strive to increase MO awareness. We work towards the recognition our field deserves by making MO’s power accessible to a broad audience, advocating for more investments in MO and educating the next generation of MO experts.

5. Education in the broader sense. Through optimisation, we advertise the joy of mathematics to young generations. We aim to spark curiosity and demonstrate its real-world applications. With relatable examples, we show how mathematics is not just a series of abstract concepts but a powerful tool that can solve complex problems. Through our efforts, we hope to inspire the next generation of innovators and leaders to use their mathematical knowledge to impact the world positively.

With the Optimization4All launch, we reach our first milestone. The website is built and funded by and for the community. This is where we stand today. Where we go from here depends on you as well. Each of us holds a piece of the puzzle. We offer a structure and a foundation for your personal MO journey and hope that one day you’ll pave the way for others.

Optimizatiol4All is an educational project and it is built on 4 values: community, creativity, curiosity and knowledge. We are a group of volunteers always looking for helping hands who want to join us. To stay informed on opportunities, events and new content, you can sign up for our newsletter.

Written by Cristina Radu and Leon Inglese.