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Cocktail capacity

Americans are drinking more hard liquor — particularly in fancy cocktails. If you run a bar, this is good news to the extent that mixed drinks typically sell for more than beer. But this is potentially also a problem. Mixing a complicated drink is more time-consuming than just drawing a beer so service slows down. Further, you need to have enough trained staff. If your bar is competing on offering a variety of fancy craft cocktails, you need to make sure you always have a competent mixologist behind the bar at all times.

But there are creative ways around this problem. According to the Wall Street Journal, bars are now putting some drinks on tap (Mixed Drinks on Tap: Faster Manhattans, Negronis and More, Sep 10).

As demand for creative craft cocktails shows no sign of slowing, bartenders have struggled with how to serve drinks quickly while preserving the taste. From small bars to hotel chains, they are making large batches of cocktails and connecting them to tap systems like those used for beer. And cocktails on tap, also called kegged or draft cocktails, make it easier to serve mixed drinks at large events.

“You can sell it with the speed of a draft beer. It’s the best of all possible worlds,” says Anthony Caporale, a cocktail consultant and representative for Drambuie, the whiskey liqueur that sponsors a competition for kegged cocktails.

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The history of manufacturing is to some extent the history of substituting capital for labor. Devising a way of making things that is more reliant on equipment (or an organizing principle like the Ford assembly line) allows workers to be more productive and generate more output per hour worked. But capital requires, you know, capital. Adding new equipment like robots requires an upfront investment and having that investment payoff depends on scale at which the business operates. Big firms like Roger-&-Me era GM can afford robots even if they have limited capabilities but smaller firms have a harder time taking the plunge. Until now that is, if the Wall Street Journal is to be believed (Robots Work Their Way Into Small Factories, Sep 17).

Robots have been on factory floors for decades. But they were mostly big machines that cost hundreds of thousands of dollars and had to be caged off to keep them from smashing into humans. Such machines could only do one thing over and over, albeit extremely fast and precisely. As a result, they were neither affordable nor practical for small businesses.

Collaborative robots can be set to do one task one day—such as picking pieces off an assembly line and putting them in a box—and a different task the next. …

Small businesses often need flexibility “because they’re not just packaging cookies endlessly,” says Dan Kara, a robotics expert at ABI research, a market-research firm in Oyster Bay, N.Y.

Here is a graphic of describing some of the machines discussed in the article.

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Radio frequency identification (RFID) chips are small chips that can convey information to a reader even if the reader does not have a direct line of sight to the chip. If a veterinarian ever convinced you to put a chip in your dog just in case Fido wandered off, you have in your house. In the retail industry, RFID chips have long been held up as a godsend — the fast track to more accurate inventory records updated in real time. Or at least they were ten years or so ago. But since then there have been challenges with costs as well as the underlying technology. Now, however, it appears a major retailer, Zara, is taking the plunge into RFID in a big way (Zara Builds Its Business Around RFID, Wall Street Journal, Sep 16).

By the end of this year, more than 1,000 of the 2,000 Zara stores will have the technology, with the rollout completed by 2016, Mr. Isla said.

The scale and speed of the project is drawing notice in the industry. The Spanish retailer says it bought 500 million RFID chips ahead of the rollout, or one of every six that apparel makers are expected to use globally this year, according to U.K.-based research firm IDtechEX. …

One benefit was on display on a recent morning, when store manager Graciela Martín supervised inventory-taking at one of Zara’s biggest outlets in Madrid. The task previously tied up a team of 40 employees for five hours, she said. That morning she and nine other workers sailed through the job in half the time, moving from floor to floor and waving pistol-shaped scanning devices that beeped almost continuously while detecting radio signals from each rack of clothing.

Before the chips were introduced, employees had to scan barcodes one at a time, Ms. Martín said, and these storewide inventories were performed once every six months. Because the chips save time, Zara carries out the inventories every six weeks, getting a more accurate picture of what fashions are selling well and any styles that are languishing.

This all raises the question of whether there is any reason to believe that it will be different this time. That is, is there any reason to believe that Zara’s implementation of RFID will be more successful than other big retailers who have gone done this road? Continue Reading »

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Marriott has been in the news this week for launching new program to prod its guests into leaving tips for its cleaning staffs. The hotel chain is not acting alone on this. It is working with Maria Shriver’s non-profit called A Woman’s Nation (AWN) to highlight the difficulties faced by hotel cleaning staff. Here is a bit from AWN’s website about the program.

A Woman’s Nation (AWN), together with Marriott International (NASDAQ: MAR), announced today that Marriott International will be the first partner in AWN’s The Envelope Please™ initiative, which is designed to encourage and enable hotel guests to express their gratitude by leaving tips and notes of thanks for hotel room attendants in designated envelopes provided in hotel rooms.

Hotel room attendants often go unnoticed, as they silently care for the millions of travelers who are on the road at any given time. Because hotel guests do not always see or interact with room attendants, their hard work is many times overlooked when it comes to tipping. The Envelope Please makes leaving them a gratuity simple and secure.

Or as a headline in New York magazine summarized the program: Multi-Billion-Dollar Hotel Chain Encourages You to Tip Its Workers

There is a no question in my mind that being a hotel maid is a hard way to make a living — particularly at nicer hotels like the typical Marriott. Guests want their room serviced on their schedule; management wants workers to be efficient and service rooms as quickly as possible; and if all goes well, the room attendant gets no real recognition. Combine that with low entry requirements (basically a clean background check and the ability to do physical work), and you get low pay. Tips then would be much appreciated. Even if a maid only gets two dollars per room and services just two rooms an hour, that extra four bucks would be a significant percentage increase. According to the Washington Post, “maids and housekeepers earned a median salary of $19,780, or approximately $9.51 per hour, according to the U.S. Bureau of Labor Statistics.

But is tipping room attendants a good idea? Continue Reading »

When was the last time you called a business number, got put on hold and heard dead silence? In all likelihood it was some time ago. So why play music when customers are forced to wait? It’s not like anyone really enjoys hearing pabulum played at the highest fidelity permitted your phone’s speaker so there is a real question here for why firms should go through the effort. Slate has an article that tries to get at this question (Your Call Is Important to Us, Sep 8). If you prefer to listen instead of read, here is an NPR interview with the article’s author.

The first thing to recognize is that playing something for callers placed on hold aimed to solve a practical problem: If all you here is nothing, how do you know that the call is still connected?

But in the spring of 1962, an application appeared in the U.S. Patent Office, humbly titled “Telephone Hold Program System.” “In the course of receiving telephone calls,” it began, a bit grandly, before settling into the problem at hand: What to do about that dead silence the caller endured while calls were transferred, their respective parties chased down? Operators were supposed to check in again on callers who had been waiting; but what if they got busy? “In any event,” the application went on, “listening to a completely unresponsive instrument is tedious and calls often are abandoned altogether or remade which leads to annoyance and a waste of time and money.”

So the thought was that using music could improve customer service and operation efficiency. People would be more willing to hang on the line and thus would not need to call back later. Does that actually work? Continue Reading »

Airlines compete, in part, by offering lots of origin-destination pairs. Not matter in which backwater burg you reside, they strive to get you to every equally lonely outpost. That might overstate the case, but most airlines try to offer options that connect most reasonably sized cities. Most airlines consequently favor hub-and-spoke configurations for their networks that funnel passengers from all over into a limited set of points (like Chicago and Houston) before heading back out to a range of cities.

But how should an airline arrange its flight into a hub? One option is to bunch arrivals closely together so that departures can similarly be bunched together. Call that peaked scheduling. Alternatively, the airline can have a smoother flow of planes coming in. Arrivals to a hub are spread across the morning as opposed to, say, having a large number of planes land between 9:00 and 10:00.

Peaked scheduling was used by most airlines for many years but has been on the outs for the last decade or so. Now, however, it is making a comeback (Airlines Create Rush Hours, Crowds and Full Flights, Sep 10, Wall Street Journal).

Instead of spacing flights evenly throughout the day, American in August started bunching them together. The change restores an old format of “peak” scheduling, grouping flights into busy flying times followed by lulls when gates are nearly empty. After Miami International, American next year will “re-peak” schedules at its largest hubs in Chicago and Dallas-Fort Worth. …

In Miami on a typical weekday, 42 flights depart between 9 and 10 a.m. Then between 10 and 11 a.m., only a handful are scheduled to take off. The process repeats during the day with 10 “banks” of flights that fill about 45 gates at a time.

The interesting part of this is that a peaked versus non-peaked schedule is really a trade off between customer service and operating cost. Continue Reading »

It’s been a long time since we’ve posted about the roll of allocation schemes in supply chains, but they remain one of my favorite topics. Allocation schemes involve a pretty simple issue: Suppose a supplier is selling to multiple retailers and at some point gets more orders than it has capacity to fulfill. How should the supplier dole out its limited capacity to its retailers? At one time or another, this has been relevant for high tech goods, luxury items and a number of other industries. But one place this almost always comes up is automobiles — newly released vehicles in particular. A hot new release is going to sell at its full sticker price (and maybe more) so allocating new cars is like passing out thousand dollar bills. So how should an automaker approach this problem?

Here is how Dodge is approaching this for its new Challenger SRT Hellcat — a muscle car with more horsepower than a Lamborghini (Dodge Challenger Hellcat dealer ordering begins — with a catch, Sep 9).

Dodge will base Hellcat dealer allocation on the total number of Dodge vehicles a dealer has sold within the last 180 days, including everything from Dart to Durango to Viper, brand head Tim Kuniskis said.

In December, a second allocation calculation will be made based on the previous 90-days’ sales performance, as well as a traditional 30-day inventory turn.

The dealer allocation for the Challenger Hellcat rewards the dealers “that are selling the Dodge brand,” Kuniskis said. “You sell a lot of Darts for me, Journeys for me, Durangos for me, I’m going to give you the rights to this one, too, because this is a halo of the brand.”

After the initial allocation, Dodge will also begin to measure the Hellcat’s days-on-lot and use it as a factor to determine the number of Challenger SRT Hellcats a dealer will get, Kuniskis said.

The longer a Hellcat sits without being sold — as it might if it were to have a $10,000 or $20,000 market adjustment on it — relative to those on other dealer lots, the fewer future Hellcat vehicles a dealer will receive, the Dodge brand boss explained.

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