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I have become increasingly taken with the question of what constitutes a good job. Various parts of operations in many industries have become automated over time and that trend will continue. But firms will still need people. Some production steps will be sufficiently nuanced or require too much dexterity that using a robot is (at least for now) impossible. Other setting like retail will favor resources who can move more or less seamlessly between restocking shelves to checking out customers. So what do these jobs look like? Unfortunately, the answer can be fairly grim.

The Atlantic has an article written by an ex-Politico reporter who lost his job and ended up (mostly out of desperation) working at sporting goods store (My Life as a Retail Worker: Nasty, Brutish, and Poor, Mar 11) and found the experience rather dehumanizing.

Of course, I had no idea what a modern retail job demanded. I didn’t realize the stamina that would be necessary, the extra, unpaid duties that would be tacked on, or the required disregard for one’s own self-esteem. I had landed in an alien environment obsessed with theft, where sitting down is all but forbidden, and loyalty is a one-sided proposition. For a paycheck that barely covered my expenses, I’d relinquish my privacy, making myself subject to constant searches.

“If you go outside or leave the store on your break, me or another manager have to look in your backpack and see the bottom,” Stretch explained. “And winter’s coming—if you’re wearing a hoodie or a big jacket, we’ll just have to pat you down. It’s pretty simple.”

When he outlined that particular requirement, my civil-rights brain—the one that was outraged at New York Mayor Michael Bloomberg’s stop-and-frisk policy and wounded from being stopped by police because of my skin color—was furious. …

I’m not sure why—perhaps out of middle-class disbelief or maybe a reporter’s curiosity—I pressed the issue. Seriously: I have to get searched? Even if I’m just going across the street for a soda, with no more than lint in my pockets? Even if you don’t think I stole anything?

Stretch shrugged, unconcerned. Clearly he’d been living with this one for a while.

“Yeah, it’s pretty simple. Just get me or one of the other managers to pat you down before you leave.” Continue Reading »

What exactly constitutes manufacturing? There are some settings that are very clear. If you work at an assembly plant building cars, you are in manufacturing. If you work at a university that educates students and produces research, then you ain’t. But there are other situations that are not as clean cut. Check out this example from the Wall Street Journal (U.S. Agencies Consider Redefining Manufacturing, Mar 14).

“If someone asks me at a party, I say we make binoculars,” said the president of Carson Optical Inc., a small company tucked in an industrial park in this New York City suburb, adding, “It’s a little bit more vague than saying we manufacture them.” …

A stroll through Carson Optical shows why companies like these can be hard to label. Mr. Cameron, a former banker, started the firm 23 years ago after a stint working in Asia, where he saw the potential to import optical goods from Japan.

But the firm today has evolved far beyond just importing the things that others create. In a conference room near the front, the walls are lined with products Carson’s three-person engineering team has designed, including a hand-held microscope used by medical-marijuana growers to study their plants and an anti-reflective lens device that can be clamped onto binoculars and gun sights.

Carson holds 94 U.S. and overseas patents. The company closely monitors how its goods are made, in some cases buying materials needed to make them and sending them to the factories in Asia.

And the evolution continues. Mr. Cameron is shopping for his first computer-guided production machine and is preparing to move to a bigger nearby building to accommodate his growing design and development operation. He plans to use the new machine to make better prototypes but doesn’t rule out someday making some of his own goods.

So is this manufacturing? On the one hand, they are not doing the nitty-gritty tasks of molding parts or fastening them together. On the other, they are doing most of the high value work like product design as well as sourcing material and setting quality standards. Carson Optical may fail a Potter Stewart I-know-it-when-I-see-it test, but it is holding onto the parts of modern manufacturing that create meaningful value.

Why does this matter? Because the federal government is reconsidering how to define manufacturing and more specifically wrestling with the likes of Carson Optical. Continue Reading »

Check out this spiffy graphic from Automotive News on the evolution of auto assembly in Mexico (Japanese automakers march into Mexico, set up export base, Mar 10).

0310-MEXICO-MAP

That expansion has to a large extent come at the expense of the rest of the North American industry as this graph from the Chicago Federal Reserve demonstrates.

AOS-Chart-1

Note that overall assembly capacity has declined. That’s not too surprising. The industry was generally seen as being overcapacitated, and the Big Three took the never-let-a-crisis-go-to-waste route to reduce the number of factories and resize their business. But Mexico clearly gained and it is forecasted to gain even more. Here’s another graph from the Chicago Fed.

AOS-Chart-2

It should be noted that this growth is driven by Japanese brands. GM is the only US or European firm to open a new plant following NAFTA. All the action lately has been due to the likes of Honda, Mazda and Nissan. Given this growth in capacity, it is not too surprising that Mexico is expected to pass Japan this year and Canada next year to become the top source of imported cars in the US. But why has there been such a rush invest there? Continue Reading »

Having an accurate forecast of store traffic is an important part of setting staff levels. This is particularly true when converting store visits into sales depends heavily on consulting with in-store personnel. But how can a store build a good forecast? According to Businessweek, satellite imaging is a possible tool (The Most Powerful Sales Tool at Lowe’s: Satellites, Feb 26).

Lowe’s said on Wednesday that it has been gauging traffic at its almost 1,900 stores from space, scanning satellite images of its parking lots to find out how many shoppers it can expect at every hour of every day. It has also started syncing its parking lot observations with actual transaction counts to see how many people drove away without making a purchase.

The space snooping is a particularly great way for Lowe’s to manage its workforce, scheduling surges in floor staff when parking spaces are about to become hard to come by.

Continue Reading »

This blog has covered many different topics over the years. We have talked about everything from managing hospital emergency departments to supply chain risk to baseball. But we have so far ignored hard liquor. That ends today. We are going to talk about bourbon. Corn whiskey has been an industry in the US for a long, long time (remember the Whiskey Rebellion?) but, as Fortune tells it, the industry is incredibly hot right now (The billion-dollar bourbon boom, Feb 6).

In absolute numbers, the bourbon industry’s $8 billion in global sales is relatively modest. (The Coca-Cola company alone has 16 drink brands with annual sales above $1 billion.) What’s extraordinary is the growth—and the fact that bourbon’s popularity appears to have come out of nowhere. According to Euromonitor, domestic whiskey sales have soared by 40% in the past five years—NASCAR-fast numbers in a sector where good growth often means 2% or 3% a year, and a revolution for a spirit whose sales declined almost without a break for 30 years. Things are even better abroad. In 2002, American distillers exported just $376 million in whiskey; by 2013 that number had almost tripled, to $1 billion, according to numbers released this month by the Distilled Spirits Council of the United States.

Growth is particularly strong in the so-called super-premium category—that is, the brands that cost about $30 or more, like Maker’s Mark—where sales were up 14.4% in 2012 alone, according to the Distilled Spirits Council. “We have trouble keeping bourbon in stock that’s over $50,” says David Othenin-Girard, a spirits buyer for California’s K&L Wines. “It’s just flying off the shelves.”

Just what is behind the growth is open to speculation. Don Draper knocking back Manhattans on Mad Men helps as does marketing that emphasizes an “authentic” American product. However, there is a problem. Producers cannot simply flip a switch and produce more.

Whiskey is unlike most spirits—or most any consumer good, for that matter—in that production cycles are measured in years, not days or weeks. No matter how efficiently a distillery mills its grain or ferments its mash, a four-year-old bourbon has to sit in a barrel for at least four years. That means production levels are based on projections far into the future. …

“We only have as much [10-year-old bourbon] available as we made 10 years ago,” says Comstock. “We’ll continue to make more, but it won’t help today.”

Continue Reading »

Has Wal-Mart figured out how to do same day delivery? The Wall Street Journal seems to think so — at least within their Mexican operations (Mexico Delivers for Wal-Mart, Feb 20).

Has Wal-Mart really figured this all out? I have my doubts. Continue Reading »

Imagine that you are a service provider and you have two ways of reaching customers. One way has you selling directly to customer while the other goes through a middleman and requires paying a commission. If you have a limited capacity, how much should you allocate to one channel over the other? What if you have to sell though the channel requiring a commission first so you cannot easily reallocate capacity between the channels?

That is the challenge facing many restaurants who offer reservations through OpenTable. Many restauranteurs game the system and may be less than honest on OpenTable about available capacity. Here is how MainStreet explains the issue (How to Tell if the Restaurant Is Lying to You, Feb 10).

Longtime OpenTable user Marcy Schackne offers testimonial validation. She checked OpenTable to book at the Palm steakhouse in Bal Harbour, Fla; it showed up full, but when she called and asked for a table, she was promptly given a reservation.

Precisely the same happens at hundreds of restaurants every night.

What gives? Dennis Lombardi, executive vice president for food services strategies at retail consulting firm WD, said that for many restaurants, the $1 per diner they pay OpenTable for a booking – on top of a fixed monthly fee – “rankles.”

They think they can book diners more cheaply themselves,” he said.

Adi Bittan, CEO of feedback service OwnerListens, with many restaurant clients, added: “For times when they expect to be full based on past experience, they do not want or need to take the OpenTable reservation. They’re taking a gamble, because they could end up with empty tables — and then the diner will walk by and see it — but it’s a calculated gamble based on probability. Since most of us, restaurant managers included, are not economists or mathematicians, we understand this dynamic intuitively but will often get those exact probabilities wrong.”

Meaning the restaurant bets that it doesn’t need OpenTable, but the empty chairs it winds up with make a mockery of their inductive capabilities.

I’m not really an economist nor a mathematician, but I have thought about this problem. Continue Reading »

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