There is nothing new under the sun…turn, turn, turn

What would it take to get “small box” stores to actually work?

If you didn’t see my earlier post regarding the potential for using just-in-time techniques to reduce store footprint, here’s an excerpt that I’ve shared elsewhere:

So in our just in time model, the chicken and Coke would be placed in the selling area at 3:00 on Friday afternoon, and would be sold out by 8:00 Friday evening. Walmart could then use the space to sell stuff that people would buy late on Friday night. (Use your imagination.) Then, probably around noon on Saturday, they’d start putting the beer in the selling space. The same space would be reused over and over again to sell different stuff.

The result?

The stores need a much smaller footprint, due to continuous reuse and repurposing of the space within the stores.

I admitted that we probably weren’t ready for this today, since the economics of grocery delivery don’t support the frequent trips to the store that would be required.

And Allen Firstenberg, both at the original post and at a Google Plus reshare, noted that a somewhat similar real-life example is decidedly not working.

The real life example is a company called Whole Foods. Perhaps you’ve heard of it. Before the Amazon acquisition, Whole Foods set out to reduce its back-of-store inventory. I didn’t account for this (which I should have, considering my familiarity with the Sears/Kmart allegations), but the Whole Foods theory was that if just-in-time practices were introduced, then warehouse deliveries could go straight to shelves, and not have to be held in freezers or bins in the back of the store. As Business Insider notes, the goal was to

help Whole Foods cut costs, better manage inventory, reduce waste, and clear out storage.

Of course, for the system to work properly, two things have to happen.

First, Whole Foods needs to be able to anticipate store demand. In my extremely simplified example in my prior post, I made some assumptions about when people would buy chicken and Coca Cola, and when they would buy beer. Whole Foods – especially since it’s now part of Amazon – would presumably have access to much better data.

Second, the delivery system needs to work. If the demand system anticipates a surge of product sales on Friday at 4pm, then that truck had better get to the store before that time.

In the case of Whole Foods, both assumptions failed.

…any unexpected increase in shopper demand or a product-shipment delay can result in out-of-stock items across every department, multiple employees said.

“If a truck breaks down and you don’t get a delivery, then you have empty shelves,” an assistant manager of a Chicago-area Whole Foods said.

An employee of a Texas Whole Foods store told Business Insider that stocking issues were “horrible” over the holidays and that the produce department “looked embarrassing.”

“I get constant and consistent complaints from customers for continuously being out of staple [products],” the Sacramento employee said. “It’s frustrating as an employee and also as a shopper.”

And if you go to the Business Insider post, you can see a ton of pictures of empty or near-empty Whole Foods shelves, many taken by angry customers.

But while Business Insider spent a lot of time diagnosing the problem, it didn’t suggest a solution. Even the article admits that the pre-JIT system led to overstocks in the back-of-store inventory, and spoilage of some of the food back there.

Hopefully Whole Foods and its corporate overlords are analyzing the supply issues, determining what is wrong with the ordering model, determining why some deliveries are delayed, and coming up with solutions to fix the whole thing.


What would it take to promote “small box” stores? (Just in time store reconfiguration)

I shared a pair of posts on two of my other blogs, Empoprise-BI and Empoprise-IE, regarding the latest round of Sears/Kmart store closures. In both posts, I shared a picture of a nearly empty Kmart that I had previously taken (this Kmart is one of the stores slated for closure).


Based upon this picture, and other pictures I had taken, I shared a throwaway observation:

I’m beginning to suspect that the members’ preferences for Sears’ physical store footprint is around zero.

Leave it to Jim Ulvog (a CPA by profession) to make a serious point regarding this.

Wonder what the compound shrinkage rate is. That would be something like a burn rate metric for physical capacity instead of cash. You comment that customer “preferences for Sears’ physical store footprint is around zero” is seems to be near correct.

Of course, any compound shrinkage rate could be influenced by a variety of factors, including the act of pulling inventory out of the stock room and putting it on the sales floor. This could be done in an effort to increase sales, or it could be done in an effort to dump inventory before a store closure. On the surface, you can’t tell which explanation is correct.

But Ulvog’s observations did get me thinking about the overall size of stores.

Throughout the last 100 years, there has been a general move toward bigger and bigger stores. I grew up near an old-fashioned A&P store that only had four aisles. Today I live within driving distance of Super WalMarts, Super Targets, Costcos, Sam’s Clubs, and IKEAs.

These stores stock a lot of stuff meeting the needs of all of the people that flock to them. But when you think about it, a lot of stuff just sits there.

I’ll give you an example. My local Walmart offers a feature that allows me to place a grocery order via the Walmart app, and then go to the Walmart later in the day and pick it up.

Which begs the question – if you order milk at 8:00 in the morning and you pick it up at your local Walmart at 11:00 in the morning, when does the milk have to arrive at your local Walmart?

The answer: 10:59.

Not the day before, or the week before.

So theoretically, if Walmart knows that I won’t need that milk until 11:00, there’s no reason for it to be in the store at 8:00, taking up space. (Assume for the moment that data mining allows Walmart to predict the exact times when customers will buy stuff.) So Walmart could deliver the milk to the store at 10:00, and it would still be available for me to buy.

Presently the economics of retail does not support on-the-hour deliveries of goods from a warehouse to a retail store. But perhaps in the future grocery industry – or in some other industry – some of the “just in time” concepts that have been used in manufacturing could be applied to retailing.

Here’s a simplified example. Because it cares about us, Walmart promotes a standard dinner consisting of a hot roasted chicken and Coca-Cola. You obviously don’t need to buy such a dinner at 9:00 on Monday morning. In fact, for purposes of this example, let’s assume that you’d only buy it on weekday afternoons.

At the same time, Walmart sells beer. Assume for the moment that beer is bought for NFL football games. Now you wouldn’t need to buy that beer at 9:00 on Monday morning. And you wouldn’t need to buy it late Monday afternoon. You’d buy it on Saturday afternoon, before the Sunday NFL games.

So in our just in time model, the chicken and Coke would be placed in the selling area at 3:00 on Friday afternoon, and would be sold out by 8:00 Friday evening. Walmart could then use the space to sell stuff that people would buy late on Friday night. (Use your imagination.) Then, probably around noon on Saturday, they’d start putting the beer in the selling space. The same space would be reused over and over again to sell different stuff.

The result?

The stores need a much smaller footprint, due to continuous reuse and repurposing of the space within the stores.

Now we’re some way away from this today – as I noted, economics don’t currently support such frequent trips between the warehouse and the grocery store – but perhaps we’ll start to see this in some other industries. We already have pop-up stores, food trucks, and other selling avenues that occupy a small amount of physical space for a temporary period.

If a selling location can reconfigure itself on an hourly basis to meet the anticipated needs of the moment, we’ll need a lot less space devoted to selling.

And then shopping center owners would be faced with even more empty store space, and would have a REAL problem.

Driving is not a crime. (Yet.)

I am writing this on January 1, 2018 – which happens to be the day that recreational marijuana is being legalized in the state of California. Whatever you may think of this particular move, it’s worthwhile to note that at the same time that people are going to be lighting up, the state of California is getting people to NOT light up. And because government seeks to protect us from things that can harm us, there will be a point in which the recent move to legalize marijuana will be reversed.

But that’s not what I want to talk about.

I want to talk about making driving illegal.

Because of the recent reorganization of my employer, I’m looking a little more at driver’s licenses these days. And, of course, I’ve been looking at driverless cars in Tymshft for years.

So I was very interested in a recent National Review article that talked about a “war on driving.” And unlike the war on Christmas, the National Review writer proposes a Constitutional amendment to protect our way of life.

But why would anyone engage in a so-called war on driving?

Think about it.

While autonomous cars seem like a disaster waiting to happen, the truth is that human drivers are very accident-prone. Regardless of how you define the data measurement, tens of thousands of people die in automobile accidents every year. And why?

[D]rivers are concerned about safety. Some 83% of respondents said driving is a safety concern. But that hasn’t stopped many of them from speeding, texting, or driving while impaired by alcohol, prescription medication, or marijuana.

Whoops – there’s marijuana again. But the point being made is that autonomous driving algorithms, if designed correctly, will actually be safer than human drivers.

So what does this mean for the future? Back to National Review.

At some point in the future, be it years, decades, or a century hence, the federal government will seek to ban driving.

This, I’m afraid, is an inevitability. It is inexorably heading our way. The dot sits now on the horizon. As is common, the measure will be sold in the name of public health. “Now that robots can do the work,” its bloodless advocates will explain, “there’s no need for human involvement.” And from then: On, the snowball will roll….

Our debate will rest largely upon charts. The American Medical Association will find “no compelling reason to permit the citizenry to drive,” and Vox will quote it daily. Concurring in this assessment will be The New England Journal of Medicine, the Center for American Progress, and the newly rechristened Mothers against Dangerous Driving, for which outfits “dangerous” will have become a lazily supplied synonym for “human.” Atop this endless statistical beat will be a steady stream of mawkish anecdotes. “Joey was just 17.” “Sarah had three kids.” “Not a day goes by in which . . . ”

Those who are familiar with National Review will realize that it opposes such measures as a threat to liberty and privacy, both from public and private entities. (Do you want the California Department of Public Health or Google or Tesla knowing where you are going…and trying to redirect you somewhere else?)

And as I previously noted, the National Review suggests a Constitutional amendment to remedy this frightening future. The exact wording isn’t important – frankly, I’d choose slightly different wording than the National Review did – but the point is that the freedom to go places is presented as a freedom that is just as important as the freedom to peaceably assemble.

After all, how can you peaceably assemble if you can’t get yourself to the place of peaceable assembly?

So the university studied about obsolescence

I was trying to trace down the origins of something shared by Mitch Wagner – namely, a tweet from Vala Afshar that included the following:

“Investor concern over the threat of new technologies is overstated”

—1999 Blockbuster analyst report

Today, our local Blockbuster Video is a Chase Bank.

When I first read the quote, I placed great emphasis on the fact that it was uttered by an analyst, not by Blockbuster itself. But then I read something that stated that the quote came from a report commissioned by Blockbuster itself.

The “something” that I read was in the Digital Communications Team Blog at the University of St. Andrews.


This blog post recorded the salient points from a lecture by Paul Boag, co-founder of digital consultancy Headscape and author of Digital Adaption. Apparently this lecture was given to staff at the University; I’m not sure if any students were present. However, as we shall see, Boag’s message was primarily to the staff.

The lecture was entitled “Digital Change.” Boag started by talking about the Blockbuster example, where the whole digital media movement passed the company by. Then he moved on to Kodak, another company that was so attached to the physical medium that it never really mastered the digital one.

After that, as Carley Hollis notes, Boag hit a little closer to home.

The inability to adapt to a world which is changing around us is one of the biggest risks to institutions today – and that includes the University of St Andrews.

What? A risk to a university? But people are always going to want to travel to an educational institution and read books, right?

We need to realise that if we do not work to meet the needs of these students – recognise that their needs are different to the need of students of even five years ago – then we will be failing them. And if we are failing students, we are at risk of failing as an institution.

The remainder of the post describes how the University’s digital communications team is seeking to render ITSELF obsolete. Until such time as “digital” is integrated into everything, though, the digital communications team is striving to help students and staff move forward.

A lifetime of memories, on a smaller scale

A recent news story on the Los Angeles CBS news radio station emphasized how time scales are different for many of us.

The story discussed damage from one of several fires that have plagued California in the last few weeks. It concentrated on the destruction to the Sylmar Independent Baseball League’s fields.


Sylmar Independent Baseball League

Fields that are used by young people.

One of these kids was quoted in the story:

“I played in this park since I was 3. I’ve never seen it like this, so I’m pretty bummed about it,” said one player.

They didn’t state the age of the player, but he was probably no more than ten years old, and possibly younger.

So his memories of the baseball field stretch back no more than seven years, but those memories span more than half of his lifetime.

This boy’s perspective of time is different than mine, because I’ve lived a little bit longer than him.

Seven years? Heck, that was only ONE corporate reorganization ago, and it was AFTER the groundbreaking NAS report was released. My daughter was just getting ready for her first year of college.

So what did things look half a lifetime ago for me? Well, the NAS report, or fingerprinting in general, wasn’t a concern of mine. My daughter wasn’t a concern of mine either; I wasn’t even married yet.

And Sylmar? The 1994 Northridge earthquake was still in Sylmar’s future.

But the Sylmar Independent Baseball League was around at that time.

And it probably will be 30 years from now.

When airport efficiency can potentially cause airports to LOSE revenue

Let’s start by getting all the disclosures out of the way. My employer, (presently) known as OT-Morpho, is very active in providing technological solutions for airports, and a former sister company (now independent) presently known as Smiths Detection is very active in this area also. These companies, their competitors, and others are actively seeking ways to make the airport experience less painless.

But this can have negative ramifications.

I like to get to airports early – two hours before my flight at a minimum. This allows me plenty of time to check in, walk to security, partially disrobe (just the shoes and the belt), go through security, put my clothes back on, and then wait for my flight. And if everything goes well, I’ll be waiting for a while.

But what if the airport experience becomes more seamless? What if I could walk into the airport, drop off my suitcase without stopping, and walk through security without stopping? It’s conceivable that present technologies could allow us to do away with all of the lines at airports without sacrificing security.

Well, one ramification is that rather than getting to the airport two hours before my flight, I might be able to get to the airport a half hour before my flight.

This set off the alarm bells for the Roland Berger consultancy:

New entrants and innovative offerings coming into the market could put airports at risk of losing significant revenues – potentially between USD 2.5 and 5 billion over the next five years unless airport operators take action to counter the threat. That translates into a 3 to 6 percent hit on their operating margin….

How would this happen? Well, there are two ways.

I don’t do it much any more, but I used to park my car at the airport for a few days when I went on a trip. But as mass transit routes link to airports and ridesharing services get permission to drop off and pick up at airports, fewer and fewer people are going to bother parking at the airport – and paying the airport those parking fees.

And it gets better. If you breeze through security so quickly that you delay your arrival at the airport, then you won’t be spending as much time there – and at the airport’s restaurants and shops. While I’ve ended my parking routine, I’ve retained some of my other airport routines. More often than not, I grab a bite to eat. (It’s included in the per diem, so why not?) And then I might get a fifteen-pack of gum and a Mounds bar before setting off on my most important airport task – finding a power outlet and decent wi-fi.

And if you’re spending less time in the airport, the airport takes a financial hit:

Passengers spent an average of $3.52 on news, gift and specialty retail and $6.32 on food and beverage per enplanement in 2015, compared to $3.45 and $6.30 respectively in 2014….

Airport data reported to the FAA showed that total revenue from terminal concessions (food, beverage, retail and services) was $1.9 billion in 2015. Revenue from food and beverage programs at U.S. airports represented 35 percent of the total 2015 terminal concessions revenue; retail represented 40 percent.

And if airports lose this revenue, they’re in a world of hurt.

Swiss rescue operations mix old and new

We’ve all heard about the Swiss dogs who venture forth in the Alps to rescue people.

Well, these days the dogs have a little bit of help.

Capo, a golden retriever wearing a bright orange rescue harness, runs with his handler in tow towards a body sprawled in the high grass as a giant drone whirrs overhead.

The scene was part of a simulated dog rescue operation this week aimed at highlighting the rapidly growing use of drones to help speed up and expand such searches in Switzerland.

The exercise took place on Wednesday, the same day as a massive landslide on the Piz Cengalo mountain in the Swiss Alps that left eight people missing and triggered a search-and-rescue mission where dogs and drones were deployed.

The article states that there are cooperation efforts between the dog people, represented by the Swiss Association for Search and Rescue Dogs (Redog), and the drone people, represented by the Swiss Federation of Civil Drones. (Almost sounds like ham radio there.)

In fact, one Redog person put it this way:

This allows us to have an eye in the air and a nose on the ground.

In which I hazard a guess regarding the future of (American) football

I recently ran across an article with two very significant data points. Here’s the first:

High school football enrollment is down 4.5 percent over the past decade, according to the National Federation of State High School Associations.

This is leading some high schools to disband their football teams – something that is shocking to the average American. The article cites several causes, including worries about concussions, as well as an increasing number of immigrant families for whom football (in the American sense) is not relevant.

While these may be the underlying causes for the decline of high school football participation, there’s another surface cause that affects things.

Youth levels of football, leagues high schools lean on as feeder systems, saw a nearly 30 percent drop in participation between 2008 and 2013, according to data collected by the Sports & Fitness Industry Association.

That’s an even bigger drop, with ramifications for the future of high school football.

But that’s not what concerns me – and you. What should concern us is when we extrapolate these numbers.

After all, if a decline in youth football leads to a decline in high school football, what does that mean for the future of college football?

And the National Football League?

Will the ranks of football players be decimated, causing the NFL to reduce to four teams and for the television networks to only offer $4.99 to cover NFL games?

Perhaps not.

I don’t know about the youth football figures, but the high school football declines appear to be regional.

More schools are fielding football teams nationwide, albeit with fewer players, led by surges in such states as Oklahoma, Florida and Arkansas, which together have added 150 teams in the past five years. But other regions – namely the Midwest and Northeast – are shedding high school football programs at a significant rate. Michigan has seen a net loss of 57 teams in the past five years. Missouri has lost 24. Pennsylvania has lost 12.

So it could be that future NFL players will come from certain regions of the country. This is not shocking – your average Major League Baseball player is more likely to come from California than from New York.

And perhaps the NFL may end up doing what baseball has been doing for years – importing talent from other countries to do the jobs that Americans don’t want to do. This may be a tall order – the NFL’s attempts to establish professional teams in Europe haven’t worked out – but for the right money, it’s likely that third world ballplayers may be induced to participate in a sport that protective American parents won’t let their kids play.

And you also have to remember that the talent at the top level is limited. Even if youth football declines by 90%, the NFL will still be able to field 32 teams. And perhaps even in that dramatic instance, the quality of the pro game will not diminish significantly, since only the elite of the elite make it to the pros anyway.

What I said about the communications revolution…in 1991

Many years ago, when I was taking MBA courses at Cal State Fullerton, I wrote a paper for one of my classes. Some of the content was derived from research that I performed at the time, while other content came from books that I had lying around my apartment, such as the autobiographies of Jimmy Carter and John Sculley.

I guess the paper must have been OK, because after I wrote it, the professor, Brian Kleiner, approached me and said that he could get it published.

Why not? I thought.

So in 1991, an English journal called Industrial Management & Data Systems published a paper by John E. Bredehoft and Brian Kleiner entitled “Communications Revolution and its Impact on Managing Organisations Effectively.”

I’ve referred to this paper at times. You can find it on my LinkedIn profile. I’ve referred to it on Google Plus – twice. And I just mentioned it in an Empoprise-BI post.

But I haven’t actually READ the paper in decades. Oh, I was curious about reading it, but not thirty-two dollar curious.

But then I found a free copy of the article by searching. You can bet I downloaded it.


And now I’m looking at the paper, curious about what I thought about the communications revolution in 1991 – and how my thoughts relate to the present-day 2017 communications climate.

Now bear in mind that I wrote my original class paper over a quarter century ago, and I don’t really remember the details of its creation. And Kleiner obviously had a hand in the final printed article.

Having said that, our emphasis on three variables – the speed of business communications, the distance over which timely information can be transmitted, and the volume of business communications – was certainly on target.

If anything, “distance” has been removed as a variable. After I got my MBA, I was tangentially involved in discussions regarding how electronic data interchange (EDI) could send data from Walmart’s headquarters in Arkansas to my then-employer in Monterey Park, California. Today, the data for those transactions could be stored in Colorado, or in Europe, or in India, making concerns about distance minimal.

And volume? Um, kids, back when I was an MBA student in 1991, I couldn’t whip out my mobile phone and watch a movie. Come to think of it, I didn’t even have a mobile phone in 1991.

Needless to say, the passage of time has resulted in some amusement while re-reading the article today. Back in 1991, the editors of Industrial Management & Data Systems saw fit to call out this profound statement:

A person with a modem can “dial up” and solve a problem

The quote itself comes from a paragraph in which we assert that the technologies could allow people in different locations to work together to solve a problem. We even quoted from an article in Rural Sociology in which Don Dillman discussed “geographically unbounded interactions” and wondered how they would affect rural life.

(Yet people still insist on living in Silicon Valley. Go figure.)

And, I’m sorry to say, there is one instance in which we got it plain wrong. I’ll take the blame for this one; I doubt Kleiner originated this idea.

Because of the technology advances, we can gather much more accurate information than we could previously.

Yes, I wrote that.

And I thought I had a compelling case. I talked about the use of grocery checkout scanners and how it allowed the Ontario Alpha Beta (I lived near the Ontario Alpha Beta in 1991; it’s now a 99 Cents Only Store) could give really, really precise information about purchases.

Boy, was I stupid.

I made the assumption that the scanners were providing correct information, and that there were no malfunctions in the scanners or in the systems tabulating the data from the scanners. More importantly, if you’ve been paying attention to the recent news, I also made the assumption that any reports of this data were completely accurate, and that no one had falsified any of the data. To be fair, this paper was published several years before Enron’s collapse, and a couple of decades before automobile companies were caught falsifying emission data.

On the whole, though, while some of the details ended up being skewed over time, our paper clearly emphasized the importance of communications in 1991, and the continuing importance of communications today.

Now I just have to find an online source for the other publication that I cited on LinkedIn – my undergraduate thesis on the Land and Water Conservation Fund. That’ll be a hoot, even if it is written in American rather than English.

How the home game Pong started in a bar

Retroist recently ran a photo showing two boys sitting on a living room floor, staring at a large screen in front of them. The black and white screen showed a dotted vertical line separating the screen into two halves. Numbers (in this case “3” and “2”) appeared on each side of the screen, and if you looked very closely, you could see a short vertical line on each edge of the screen.

The two boys are staring at this boring black and white screen, acting like it was showing something riveting.

Actually, the screen WAS riveting.

If you haven’t looked at the picture – or even if you have – you might not realize that the television screen in the picture is showing the game of Pong. All revolutions have to start somewhere, and the move from traditional pinball games to video games was accelerated by Pong.

But before Pong became a home game, it was an arcade game. And the whole idea of bringing an arcade game into the home was a terrifying thought in the early 1970s. This article (which I’ve cited before) describes the seedy reputation of arcades, pre-Pong.

The invention of the flipper by Gottlieb in 1947 helped to launch pinball more firmly into the “game of skill” category, and manufacturers began to aggressively pursue a family-friendly image. Of course, that didn’t matter to much of the country where pinball was illegal, forcing machines into even seedier locations like porn shops and dive bars. New York City’s Greenwich Village neighborhood became a haven for backroom pinball machines. Like so many things which are illicit, though, the attraction of pinball only increased in the prohibition years following World War II, and, by the 1950s, the quickest route to proving your rebel status in America was to be seen within a few feet of a pinball machine.

But these smoky pinball machine havens were about to see a new type of video game. Video games themselves had been around in some form or another for a decade, but they weren’t the types of things that you’d bring into a bar.

Andy Capp’s Tavern in Sunnyvale, California, wasn’t the kind of place where fights would break out every night. But the hole, named for the surly British comic-strip slacker, was shadowy and dark. Cigarette smoke swirled so thick that it rivaled the fog that rolled in over the Santa Cruz Mountains. You might bring your girlfriend to Andy Capp’s, but not on a first date.

But three former Ampex employees, Nolan Bushnell, Allan Alcorn, and Ted Dabney chose this Sunnyvale bar to test their company Atari’s new game Pong. While the initial success of the game at the bar may have been exaggerated (did the bar patrons fill the game with too many quarters, or did Bushnell?), the game did become successful at bars throughout the country and eventually around the world.

By Bumm13 [2] (Originally upload at en.wikipedia.org [1]) [Public domain], via Wikimedia Commons

And why not? Compared to pinball machines of the day, Pong WAS revolutionary and mesmerizing. No moving parts on the play board, a deceptively simple – and addicting – game. As competitors improved on Atari’s game – and as Magnavox took Atari to court alleging the Pong infringed on an earlier Magnavox game – the entire industry worked at creating games better than Pong, ushering in a golden era for video games.

Much has happened since then – you can now play Pong on your iPhone, and Andy Capp’s Tavern is now a comedy club – but Pong has undeniably changed the entire gaming industry.

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