Feeds:
Posts
Comments

Posts Tagged ‘pooling’

Queuing has been in the news lately. First, the Wall Street Journal’s most recent The Numbers column was on queuing theory (The Science of Standing in Line, Oct 7). The story is in someways disappointing since it emphasizes the history of queuing over its current applications or general insights. However, it does feature this rather spiffy graphic contrasting service systems in which several servers pull from a common queue as opposed to each server having a separate line.

na-cl845_number_16u_20161006202714

(more…)

Read Full Post »

Have you finished your Christmas shopping yet? You apparently are not alone in procrastinating.  Shoppers are buying later and that is causing problems for firms trying to make sure they can get the right items to the right markets. Take, for example, toy maker Lego (Predicting Holiday Sales Poses Issues for Lego, Dec 13, Wall Street Journal).

The Christmas shopping season is getting trickier to navigate as buyers are waiting longer to purchase holiday gifts, Lego’s chief financial officer said Friday, and the trend is creating a need to get more immediate buying data from retailers, particularly in the U.S. …

In a telephone interview, John Goodwin said “this year is going to be the greatest stress test we have ever had.” While a late Thanksgiving contributes to the stress, “people are pushing off their gift buying later and later into their calendars.” …

[A]ccurately tracking buying patterns during the December shopping rush is of critical importance to a company such as Lego, which holds out as long as possible to package its bricks for shipping to individual markets. Many of Lego’s basic bricks are the same, but buyer tastes rapidly change, Mr. Goodwin said. So the company waits to decide what volumes of specific play sets to assemble.

“It increases the importance of getting very good data, so we can supply the retailers with the right products at the right time. We have to be as close to the ultimate purchase as possible in order to respond…nobody wants a disappointed child on Christmas.”

(more…)

Read Full Post »

We have given considerable coverage to the attempts made by Macy’s and Nordstrom to virtually pool their inventory.  The idea is that while these firms need to carry inventory in a decentralized manner, in their brick and mortar stores as well as their main warehouses, they can still manage the inventory in a centralized manner. So, if an order is made online and the item is stocked out at the main warehouse, it can be sent to the customer from the nearby stores. The same idea applies when a customer places an order at a brick and mortar store that does not have a sufficient quantity.

During our penultimate class in the operations management course, I was discussing the benefits of such inventory pooling, and illustrating them using our recent posts. One of the students, Ryan Orr (h/t) mentioned that he recently placed an order at the Macy’s stores in Oakbrook for 10 identical ties for an important event. The store had only a limited number of ties, and agreed to order the rest of the quantity from nearby stores, and ship them directly to Ryan. As you see in the photo, Ryan got 10 ties, with 4 different patterns from 6 different stores (all in the Midwest). We blurred the receipt’s, but confirmed that all ties had the same UPC code, which means that this was not a mistake of the store in Oakbrook, the employee or the stores that the delivered the product. They all thought that they deliver the product that Ryan wanted.

Tiesblur1

Several explanations are possible:

(1) This is not a fast selling item (sorry Ryan), so over time the UPC number has transitioned from one pattern to another. Some stores carried the newer item, while other still carried the older one.

(2) It is possible that some of these stores were not originally Macy’s stores. It is possible that some of these were Marshal Field’s stores, for example, and still carried UPCs that were based on their legacy systems. We could not confirm this explanation.

(3) Loose quality control on Macy’s side. It is possible that someone accepted a shipment from a supplier to Macy’s without confirming that the shipment indeed included the right pattern.  All of these are green ties, but is it possible that someone did not notice the difference in patterns. Unlikely (?)

If anyone at Macy’s is reading and has a better (and maybe the right) explanation, we will be happy to post it.

Read Full Post »

How do you grow a service business when growing means adding locations? That’s always been one of my favorite topics in service operations. It poses interesting challenges on what must be standardized and where flexibility should be maintained. The Globe and Mail has an interesting profile of  Toronto entrepreneur who has had to grapple with these issues as he has expanded his takeout restaurant from one location to four (Restaurateur creates winning recipe to manage multiple locations, Mar 8). They’ve gone the emphasize-standardization route.

Over the next seven years, Mr. Ross opened up three more Veda locations, two in buildings on the main University of Toronto campus, in 2007 and 2009, and one this past summer at University and Dundas, close to a group of hospitals. To manage across these locations, he pays close attention to as much standardizing as possible.

Since Mr. Ross believes food consistency to be critical, all the cooking is done in a central location. This means not only that food in all of Veda restaurants is cooked using the same recipes, but that it all comes from the same batch. The cooking takes place in the original, flagship Yorkville location and is distributed to the other locations each morning.

To ensure that the right food is at the right place at the right time, Mr. Ross needs to be able to estimate demand at each location on each day of the week. He has systems in place that allow him to predict that, and to tweak the prediction if there are events, such as large conferences, in the area. As well, he has a driver on call at all times who can deliver food to a location within 10 minutes if there is unexpected demand and something is running out.

(more…)

Read Full Post »

Emergency cash

Of all the questions that have been asked in the wake of Hurricane Sandy, I bet you have not asked yourself, “But how has this affected the banks?” I’m not talking about the big investment firms that had two unexpected days without trading. Rather I am thinking about retail branches and ATMs. Money doesn’t go on trees and it turns out to be hard to get without reliable electricity. At the same time, merchants have a limited ability to take credit cards if the power is out or phone lines are balky. Thus, while New York City hasn’t been reduced to a barter economy, the Wall Street Journal reports that it is more dependent on cash than usual (Scramble for Cash In Sandy’s Wake, Nov 2)

Bank of America Corp., Wells Fargo  and J.P. Morgan Chase deployed temporary ATMs to parts of New York and New Jersey as they worked to get branches reopened, though in some cases they were delayed by signal problems and other storm-related woes.

In some areas, it was hard for banks to keep up, as people seemed to be withdrawing more cash than usual.

A Chase ATM housed in a Duane Reade pharmacy in Brooklyn, N.Y., ran out of cash at 11:30 p.m. Wednesday, according to store manager Elizabeth Almonte, who described the lines for the machine since the storm as “insane.”

On a typical day, she said, there are generally about four people waiting in line for the ATM. Sunday, she said, lines snaked across the pharmacy and out the doors. She said Chase had said it would put more money in the ATM on Monday but by midday Thursday she hadn’t heard from the bank. Customers “understood but were annoyed,” she said.

This is an interesting operational challenge. Getting anything delivered in New York right now is a hassle but the logistics of cash is particularly tricky. Movement of moolah requires special trucks and all sorts of bookkeeping at either end. Given that, there is a question of what is the best way to deploy limited resources.

(more…)

Read Full Post »

%d bloggers like this: