Queue theory can help manage retail queues

Queues are bad. Really bad. They literally cost you money. One of the principles of queue theory is that once a queue forms it has to be managed, which requires resources, then you need over capacity at some point, in order to reduce the length of the queue. Often the resource to manage the queue comes from the very thing serving the queue. This means the queue gets processed even more slowly than before the queue started and the queue gets longer. It doesn't start to get shorter until you have over capacity.

Retail queues cost money in all kinds of ways and often those costs are hidden, or at least not immediately apparent. Long queues lead to customer dissatisfaction and ultimately to lost customers. Losing customers obviously isn't a good thing and will cost you money in the long run, and it's in this respect that most people associate the cost of queueing. (Queueing, incidentally, is the only word in the English language to contain 5 consecutive vowels)

Some less obvious ways that queues cost money involve

o In a supermarket, the space kept clear between the checkouts and the start of the aisles is valuable space that is being used to manage queues instead of being used as shelf space.
o Two delivery lorries arriving at a store/depot at the same time cost money in waiting time.
o Or a more trivial example, taking a ticket at the meat counter involves the cost of the little yellow tickets and the dispenser

Understandably therefore, minimising queues is top priority, and as something that has big impact on customer dissatisfaction, it's something of a PR tool in the supermarket wars. The trade off is balancing the cost of resources used to prevent queues, vs the cost of the queue itself. Having all checkouts open all the time would go a long way to easing congestion in the store, but that has to weighed up against the retail wage budget, (the single biggest expense for a large retailer), used to pay all of those checkout operators required to ensure no queues.

Retailers understand this trade off and have developed complex systems to help them manage queues, something that the average shopper trying gauge whether aisle 19 (short queue, but inefficient operator) is better than aisle 20 (longer queue but smaller basket size) probably doesn't appreciate. (Fuzzy logic might help here!) Space in store is critical and the retail wage budget is massive, so what looks like large investment can be easily offset by the cost of real savings in either of those areas.

You might like to ponder this next time your stuck in a checkout queue, It's something I can't help myself doing... (My personal favourite is the Wilkinson's dot matrix receipt printer, which takes something like 15 seconds to print your receipt. Whilst laser printer are more expensive, the retail wage budget saving, at roughly a quarter to half a million pounds per second, I'm sure would massively outweigh the investment)

You can apply a queue theory equation in loads of different ways (another favourite of mine is NHS waiting lists). In a later post I'll talk about how I've used queue theory to revamp a large data warehouse batch schedule..

Green credentials : altruism or commercial interest?

I recently facilitated a Retail Business Intelligence Seminar, which was attended by many of the UK's leading retailers. The format of the day was a number of presentations and some round table discussions on topics that had been selected by the attendees in advance by way of a questionnaire. The Butler group presented on the leading topics of the day within business intelligence and we heard from Conchango's David Ellis, on web performance management.

Corporate Social Responsibility reporting, colloquially referred to as 'Green' reporting, was one of the latter topics of the day for the round table discussion. Green credentials are obviously top of the agenda at C-level of the top retailers and are filtering their way down the organisational hierarchy. IT departments haven't yet got to grips with this in any serious way although departments like Marketing are in full swing, which is why we're all familiar with stories about Marks and Spencer, who are soon to start charging for carrier bags as part of their Plan A initiative, but in the meantime have been giving away free 'Bags for Life'. Sainsbury's have dipped their toe in the 'free Bag for Life' water too. Tesco of course are in on the act with the Future Store initiative, check it out next time you're in Wick (!), and have installed, reputedly, the worlds largest solar panel roof at their Fresh and Easy distribution centre in the US.

The discussion at the table rounded very squarely at one point on 'Are they doing it for money or because they care for the planet?'. Unanimously, instantly, 'for the money!' was the response. Was I the only person slightly disappointed by this response? Or have I bought into the marketing message and believe they do care after all? Who knows? but later when I reflected back on this, I thought, 'If they are in it for the money, in what directions could they take it?'

If you shop with a Tesco, and use your clubcard, then Tesco will know every item you buy. Tesco could therefore work out an individuals customers green credentials from the products they buy, assuming they work out individual product greenness, which surely is a first step. They'll already use some Fuzzy definition of greenness probably linked to a measure of ethicalness for segmentation purposes, but this will allow a whole new measure of granularity.

Doing this would of course give rise to opportunities to up-sell people to more 'green' products, that as well as espousing their green credentials, probably cost more and have a greater margin. This has profit implications but also huge customer satisfaction potential. Imagine how powerful Tesco online shopping could be if you could be presented with greener alternatives to those Kenyan strawberries, right there on the page? This has the added advantage of being applicable to all customers for as we have all heard, there are those vocal customer groups who shun the mighty clubcard for big brother reasons. For the many who carry one though, (13.5 Million), I wouldn't be surprised if they actually wanted Tesco to go this far. Why try and work out your own carbon footprint when someone else can do it for you?

As I stated above, 'Green' is big at C-level and has slowly started filtering down, at some point in the near future green credentials will filter it's way into mainstream BI. Expect more blogs on this in the future....

Selling houses with fuzzy logic

Isn't searching for a house online addictive?

You spend hours and hours at the computer, changing sites, varying search parameters, taking virtual tours etc. If your seriously moving then you do this every day so you can catch the latest properties. Is it addictive? Or does it just take hours because traditional house hunting search engines like Right Move, just don't work like we need them too? In my experience, In order to find that dream house, you need to enter parameters so wide that hundreds of properties are returned, almost all unsuitable and your left to trawl through each one looking for the one or two possibilities. In this day and age shouldn't the computer be doing that? Yes!

It's my belief that house hunting search engines are fundamentally flawed because they use boolean logic. Things are either true or false, 1 or 0. A house either has 4 bedrooms or it doesn't. It's priced under £400K or it isn't. But searching for a house isn't a true or false search. You may want 4 bedrooms, but a 3 bed house with room for an extension might be ok if the other factors were also strong. Boolean logic can't cope with this. Things get much worse when you add more and more search parameters in i.e. detached, 4 beds, 400K, Drive, Garage, study. Let's look at two approaches.

If you AND these factors together then only houses that have all 6 will be returned, unlikely.

If you OR these together and rank on number of matches (like a search engine) then you typically get hundreds of houses returned.

I think you'd get much better results if your search applied fuzzy logic. Fuzzy logic deals with degrees of truth, rather than absolutes. Rather than a yes or no, it's under 400K or not, yes or no. Its a 'yes, nearly, not quite, not really, no' type of thing. Rather than looking at criteria as pass or fail, 1 or 0, Fuzzy Logic scores them and come up with a holistic view. You score the search against the parameters and include near misses.

Estate agents would argue they been doing this for years, and given the increasing trend to do away with estate agents, they'd be wise to press this angle. If your estate agent is good you might get a call like this?

"Hello Mr Hanlon, its Laura from the Estate Agents. We've got a new property on the market that I think you may be interested in. It hasn't got the 4 beds that you wanted but it's in a really great location, large back garden, drive for 5 cars and the possibility to extend. I thought you might be interested. Give me a ring back when you can".

The estate agent here used fuzzy logic to judge that whilst this property didn't tick the boxes exactly, it scored highly across a number of categories to warrant looking at. How many people have ever given something 9.5 out of ten? or used a rule of thumb? All of these are examples of fuzzy logic in action. Our brains see things as shades of grey, rather than black or white. So how does this all relate to Business Intelligence? Well it's one reason why dashboard reporting can miss the mark.

OK but what do we learn from this.?

Estate agents could re-learn from retailers that's it's important to listen to your customer and give them what they want. They have the edge over search engines and they should work hard to exploit it.

Fuzzy logic is the way all things in the future will work. More of this later...

PS A friend of mine, Jamie Thompson, can also see the benefits of Fuzzy Logic, why not read some of his posts in his blog, SSIS Junkie.