Supermarket O.R. (2) Just in time
Every week, BBC Radio 4 broadcasts a programme about the food industry in one guise or another; it is called, without much originality, "The Food Programme". The most recent broadcast was concerned with the price of food, and why it is increasing. The interviewees talked about the way that some governments are starting to stockpile food for their citizens (the story of Joseph in Genesis!) and how others are buying land in allied countries to ensure a safe future supply of food, particularly the staples of rice and grain.
One section of the programme was devoted to the U.K. supermarket industry, which the commentators described as the most sophisticated in the world. In the course of the discussion, an interesting point was made, using the expression "Just in time", which encouraged me to concentrate on what was said, as "Just in time" has emerged from the Management Science/Operational Research/Industrial Engineering stable of work.
The point was made that the big four supermarkets now run their businesses on the "Just in time" philosophy. Most supermarket buildings have very little storage space -- the building is largely devoted to sales area. Therefore, the deliveries are carefully scheduled so that goods can be moved quickly from truck to shelves. (If you have ever cursed the staff moving large cages of goods around the aisles when you want to shop, it is because this is part of the "Just in time" principle.) In consequence, each supermarket is extremely dependent on a reliable supply via trucks. When there are interruptions, then the stock of goods at the supermarket suffers and shelves are empty, customers go elsewhere. This has been noted in the past, when there have been strikes by delivery drivers.
It is a very good model for operations, but the implication of the programme was that it has a downside. Operational Research has optimised the system for management, assuming that "Just in time" is the way to run the shops. But, the time may be coming, when this no longer applies. And then some -- or all -- of those companies may find that their whole management paradigm must shift, shift to a different way of managing the supply chain and having more space for stocks, which may mean expensive changes to the buildings. I am afraid that O.R. is not very strong on encouraging such major paradigm shifts, as we generally work within the constraints of the system as it is, not as it might be.
One section of the programme was devoted to the U.K. supermarket industry, which the commentators described as the most sophisticated in the world. In the course of the discussion, an interesting point was made, using the expression "Just in time", which encouraged me to concentrate on what was said, as "Just in time" has emerged from the Management Science/Operational Research/Industrial Engineering stable of work.
The point was made that the big four supermarkets now run their businesses on the "Just in time" philosophy. Most supermarket buildings have very little storage space -- the building is largely devoted to sales area. Therefore, the deliveries are carefully scheduled so that goods can be moved quickly from truck to shelves. (If you have ever cursed the staff moving large cages of goods around the aisles when you want to shop, it is because this is part of the "Just in time" principle.) In consequence, each supermarket is extremely dependent on a reliable supply via trucks. When there are interruptions, then the stock of goods at the supermarket suffers and shelves are empty, customers go elsewhere. This has been noted in the past, when there have been strikes by delivery drivers.
It is a very good model for operations, but the implication of the programme was that it has a downside. Operational Research has optimised the system for management, assuming that "Just in time" is the way to run the shops. But, the time may be coming, when this no longer applies. And then some -- or all -- of those companies may find that their whole management paradigm must shift, shift to a different way of managing the supply chain and having more space for stocks, which may mean expensive changes to the buildings. I am afraid that O.R. is not very strong on encouraging such major paradigm shifts, as we generally work within the constraints of the system as it is, not as it might be.
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