Monday, March 10, 2014

A New Voting System: Issues, Not Parties

What was hardest for me in last election was that there was hardly any meat to chew.  Very few issues were addressed by the campaigns and in the debates, and those that were addressed were not addressed directly or properly.  I used to vote based on the issues I'm most concerned about, and where each candidate stood on those issues.  I had next to nothing to go on this time around.  Instead of having to pick from the lesser of two (or more) evils, I think we should do away with the party system entirely.  Instead, Americans should be presented a list of issues, and the voting would have three parts: (1) rank the issues that are most important to each person, (2) vote what action or direction should be taken on each issue, and (3) decide who you want to put in charge.  Then the leaders would be tasked with executing America's decisions, based on the most highly ranked issues, regardless of their own personal beliefs or partisan stances.  The politicians can be graded on whether or not they accomplished the goals America asked them to work on, and thus potentially earn re-election if successful.  That would be a true Democracy!

Every election year, there's talk of whether or not the electoral college is still relevant.  On the one hand, it is an antiquated system created when we just didn't have the ability to get accurate information to all parts of the country.  On the other hand, a popular vote alone might lead to under-representation.  I think this debate hints at something much greater and deeper: that the voting scheme we use today was made for the days when people were uneducated and uninformed.  Now, many more Americans have access to decent education and higher education, and we have information overload through the Internet and other media.  If a business model was made for the 18th century and isn't working today, you'd do away with it.  Why would we run our country any different? 

So often, I find that I full-heartedly agree with a candidate on several issues, but am completely disgusted with their stances on others.  Do I vote for that candidate, or find someone more palatable overall?  We should not have to make these kinds of split-hair decisions.  It gets worse, too.  Often, the candidates I could agree with most easily overall have weaker stances on each issue, and are third party candidates.   So then I have to decide if I want to vote for a candidate not all that likely to win, because he/she does not have an R or a D after his/her name.  On the off chance he/she does win, we will have to deal with the consequences of a perhaps less-experienced politician with inadequate defenses.

Maybe now is not the right time to completely revamp our political system, with the fiscal cliff looming and unemployment painfully high.  But if and when we get out of this financial mess, I'd like to see a group of politicians from both sides get together to develop and propose how a government in the 21st century could run.  We need fresh ideas to change the course of this country, not infighting and bazillion dollar campaigns.  Scrap tradition and disregard the nuances and tactics our founders established; imagine how a newly founded country in these times could be built and structured.  I'm not saying do away with the values or our rights, just think out of the box to look for new ways to preserve and protect our values and rights.  The good news is, creativity is a strength of America, and we have a wealth of intelligent people that could envision a new democratic process and make it happen. 

Friday, March 7, 2014

Pizza Delivery Supply Chain Improvement: The World's First Culinary 3PL

Don't ask me what made me think of this, I really don't know.  But somewhere between reducing capacity concerns at a liquid hand soap co-packer and refilling my cup of water, I got the whiff of a ridiculous idea for fast pizza delivery - or maybe it was the pizza being pushed by me as I made my way back from the water cooler.  Whatever it was, I think I'm on to something, or at least, its amusing to think about.

First, some background for non-supply-chain people.  The products you buy in stores are considered make-to-stock products.  Make-to-stock supply chain models are best suited for products that are low in value, like commodity items, have long shelf lives and have long lead times on the raw materials or manufacturing processes (or both).  Products that are high in value, like fancy computers and cars, are often make-to-order rather than make-to-stock.  Products with very short lead times and short shelf lives, like pizza or sandwiches, are generally make-to-order as well.  Make-to-stock supply chains require demand forecasting (and forecasts are almost never correct, they can be too high or too low), production planning (which either makes too much or too little, depending on the forecast and lot size factors), and materials planning which can wreck havoc on an otherwise perfectly planned production plan if the materials are not available.  When too much is produced and not sold, it becomes inventory which carries a cost.  When too little is produced, customers get upset and service levels tank.  It is easy to see why supply chain folks love make-to-order, because there is much less risk involved; you generally get payment up front, you have firm orders from real customers instead of forecasts, and all you have to do is produce it.  

Manufacturing companies also have a lot of logistics problems to work through on both sides of their operations: getting the raw materials or components needed to make what they make, and getting their finished products out the customers.  That is where 3PLs often come in.  3PL stands for third party logistics provider, and they are a unique kind of company that specializes in those logistical nightmares that manufacturing companies tend to struggle with.  My own experience with 3PLs has proven gains in efficiency, inventory accuracy, and service to our production lines and to our customers.  

So now that we have our basics, let's get back to my blasphemous or radically innovative idea I came to write about.  I started wondering what would happen if there was a 3PL managing pizza delivery.  On the one hand, sales forecasts are more accurate the more aggregated they are, so by removing the luxury of large warehouses, a 3PL might seem impractical.  On the other hand, lean methodologies tell us that a lot size of as low as 1 can still be efficient if the processes around it support lean principles.  

Let's imagine a densely populated neighborhood which orders on average 25 pizzas for dinner per night:  6 cheese pizzas, 13 pepperoni pizzas, 4 sausage pizzas and 2 special order pizzas.  Let's say the standard deviation is 1 pizza in each category except pepperoni, where the standard deviation is 3 pizzas.  The orders are placed between the hours of 5:30 pm and 8 pm and are normally distributed.  Would it be possible to set up a micro-delivery station in that neighborhood and other neighborhoods like it, where the pizzas could be made based on a forecasting system and delivered within minutes of the order, without losing too much freshness?  Imagine Jimmy John's delivery speed applied to pizza - if quality and freshness were comparable, it would blow away the pizza delivery market!  

It wouldn't be that hard, assuming, of course, that the demand is steady enough to warrant such a setup and and high enough to be profitable.  Some pizzas would be discarded at the end of each night (taken home by the delivery boys as a bonus), and special orders would still take a little bit longer.  But even special orders could be semi-baked the time the order comes in; if the order is for a pepperoni and sausage pizza, just throw some sausage on a semi-baked pepperoni pizza, right? In fact, I could imagine these little micro-franchises could be run by a person living in the neighborhood, and the pizza could be delivered by bike rather than car.  A teenager could do it after school, or a stay-at-home mom could run the dinner business when her husband comes home.  The possibilities are pretty neat when you make it so tiny anyone can do it.  And if there's no separate facility, there's no overhead.  Just materials (cardboard boxes) and ingredients, which pay for themselves when the customers pay for their pizza.  The only upfront cost would be a commercial oven, assuming that the conventional ovens at home are not large enough to support even this kind of demand.

I have another twist, too.  I believe the very near future will include self-driving, autonomous vehicles in the marketplace.  Now, pizza delivery boys are not known to drive the nicest of cars, but let's imagine if the company provided the vehicles in order to support their business model.  With an autonomous delivery vehicle, an oven a mini-kitchen can be installed, and the delivery boy can be your cook as well.  He literally would let the vehicle drive him around as orders pop up (there would have to be some algorithm to deploy delivery boys based on location and availability, not unlike a taxi service today) and he would prepare the pizza on the way there.  When it finishes cooking, he boxes it up and brings it to your doorstep.  Now THAT'S fresh pizza!

So, until we have self-driving cars with pizza ovens in them (and the legislation to allow autonomous cars to be driven without the driver being attentive), I suppose the only issue is whether or not a neighborhood or small geographic area could have the volume and reliability of demand to support such a business.  Validating it prior to opening up shop could be difficult, as there are a lot of different pizza delivery companies, who are not likely to share their data with you.  I suppose you could set up cameras and watch for pizzas to be delivered; the good news is that its pretty obvious how many pizzas are being delivered visually.  In addition, the value proposition of impossibly quick pizza delivery is different than regular pizza deliveries.  In fact, it could increase demand for pizza delivery.  Borrowing a model I've heard for other startups, one way to validate it would be to set up a website to take orders, and when the orders come in, apologize to your would-be customers for not being able to deliver, and offer them a chance to sign up to find out when you actually are open.  This seems like it could turn people off though, and I would be afraid of the damage it would do.  Unless, of course, you did it in a different but similar geographic region then the one you plan to actually open up shop in.  Alternatively, coupons for future purchases might alleviate some of the "burned" feeling of your customers.  

Perhaps a good way to start is by making a few pizzas tonight and open up a preliminary shop (not yet equipped with commercial ovens), but limit the ordering process on the website to only take the first few orders with the 5 minute delivery time, and the rest to promise a more reasonable delivery time.  You'll know pretty quickly what your demand looks like.  You could even get friends and family who live nearby to pitch in their help for the first few opening nights in order to keep as many 5-minute delivery times as possible.  

That's about as far as I got.  I'm not all that interested in being in food service myself, but I think its an interesting proposition for someone looking to start perhaps the world's first culinary 3PL.  Anyone hungry yet?