Retail Inventory Control Operations - The 10 Second Rule - Part 2

Our retail inventory control operations happen in the back office -  typically far away from the public eye.  The general public never sees our software in operation.  Our enterprise clients typically have buyers huddled as a corporate team and receivers staffed in one or more warehouses around the country. In single property operations, the store manager usually has their workstation in the midst of  the store's back stock where they do both the buying and the stocking for their outlet. DataWorks end-users  are behind the scenes,  making the decisions and preforming the prep work that enable all of the front of the house operations to work.  They decide on the right mix of merchandise, the proper merchandise presentation, the target margin, and when product needs to be marked down and moved out.

They also have a sense of how long something should take to accomplish.  In our last post I talked about how the receiving function is the most heavily used feature of our software. I said that we strive to live within a  10 second rule for our inventory transactions;  yet, I admitted that this function typically takes much longer than 10 seconds to process.

In our home we use to live by the "5 Second Rule".  If you drop something on the kitchen floor, and it has been there for less than 5 seconds you can plop it back on your plate, splash it into your bowl, or drop it into you mouth. More than 5 seconds? Meet Mr. Garbage Can.

We now have three reasons that make this rule obsolete:

1. Our 3 year old son is not fond of washing his hands.
2. Our maid is a Roomba robot who is long on determination, but short on suction.
3. We have Ringo - the pet ferret - who was last seen headed behind the dishwasher with a naked barbie doll clenched in his jaws.

So, if ANYTHING touches the kitchen floor in our home it is walking down the long dark hallway for an interview with the garbage can.

On the opposite side of this plate is my culinary rule when camping. If  dinner drops to the dirt, I give it a brush, blow on it once, then eat it up,  grime, grit and a grin - regardless of  elapsed contact time with terra firma.

A person's sense of cleanliness or sense of urgency depends a great deal about where they are.  The context of "where" determines our expectations on how long is too long.

Put another way: walking down a dark alley is not the same as a stroll in the park.

Now that I have wandered off  topic and stumbled over my metaphors, it is time to loop back and pick up the post where I dropped my chain of thought...

Our inventory control operations happen in the back office, far away from the glare of the public.  But our point of sale partners are right out there in the public's line of fire.  When one of our bar-codes is scanned, the price is expected to "instantly" appear.  When the sale is totaled we  expect the tax  to "instantly" appear.

Besides being done in front of the public, the point of sale transactions has some other special distinctions about the end of the transaction that separate it from the completion of other inventory control operations. The point of sale transaction has one or more connections to mechanical devices that can mask the time it takes to save the transaction.

1. Printing of the sales receipt can mask the time to save the transaction to the database back-end.
2. Popping the cash drawer will absorb a second or two of transaction time.
3. Rolling coins down an automatic change dispenser chute will amuse patrons,  keep the cashiers hands clean, and certainly hide any digital needs with analog springs.
4. The prompting of a signature or the requirement of a PIN input by the customer puts a great deal of slack time into the transaction.
5. Verification of ID, with the inspection of a Driver License Number or Phone Number eat up enormous amounts of CPU clock cycles
6. The Credit Card authorization can absorb any residual transactional latency.

The credit card authorization really is a separate financial subroutine event that happens outside the inventory control transaction, but it holds the final keys to locking the transaction down.  When the credit card is swiped we expect the approval to occur in -- what?  Two seconds?  Five seconds? Ten Seconds?

My experience is that when any sales transaction takes over five seconds (credit card or no credit card) the clerk will utter the universal face saving, "the system has been slow all day" disclaimer. (The exception to this is the patient staff manning AT&T cell phone stores, their transactions always take somewhere north of  30 seconds - and they never blink until the 45 second mark is passed)

When the credit card authorization subroutine takes more than 10 seconds, I start fanning my wallet,  looking for cash or alternate slices of plastic because I figure that the credit card processing company is about to bingo my card - a big blue banner of  broadcasted unhappiness is about to scroll across the Verifone's display.

Exception to the anxiety index?  Black Friday or Christmas Eve - I expect to wait for the authorization subroutine to complete and the delay will always be the result of the extra demand being pushed into the system - it is never my problem on those days.

Consider this - our retail inventory control operations typically occur as solo events --  no one is around to share the moment with, no one else can hear the  "this takes too long" statement. Additionally,  there are no mechanical contraptions to print, pop, roll, amuse or distract us from the event. All we offer are thermometer bars that mark time to the rhythm of the saving records. With the lack of distraction,  I believe our inventory control transactions seem to take longer than point of sales transactions even when they take the same amount of time. Of course how many 100 line item POS transactions have you ever heard of?

Having just said that, I remember that back in the late 1980s and throughout the 1990's our SCO Xenix and MS-DOS applications were designed to begin a print job  immediately on the save of a transaction. As soon as the receiving event was told to process we would start printing out a "report" that would document the event for accounting and paper back up. The first step of our transaction would be to dump the contents of the transaction out to a Dot Matrix Printer.  The print command would take a half a second or two to push, and once completed we could continue with the work of quantity, cost, retail and accounting updates. The printer would take a good 30 -60 seconds to weave fan fold paper under its 32 character per second print head and when the printer ejected the paper up to the rip line, the transactional data was safely saved and waiting for the next transaction to begin.

We now design our back office inventory control operations to only print on demand. A document that can be printed to the screen, or emailed to a department, or published as a PDF file has taken away our ability to hide the transaction's save in the shadow of the printer. Plus we feel pretty good about our green policy and the fact that we are saving acres of pine forests from being bound into journals full of DataWorks documents.

Having just pulled those two decade memories up to my frontal lobe, it might be possible to design the receiving transaction to spool up the bar-code ticket printer at the beginning of the transaction with the need for hang tags or adhesive sticker stock.

I have done a fair bit of political back peddling on this post.  I declare that we have a 10 Second Rule and then do a great deal of mental pondering on modifiers to the rule. The 10 Second Rule is a design goal.  Whenever I hear there is a "Rule" in computer programming,  I start toward the fire exit,  looking to protect myself with a new software vendor. Rules are created by programmers, designers or companies who have either a mental block, a framework restriction or a language weakness that is preventing them from doing something better.

Hopefully,  I have painted a picture that our inventory processing time is indeed relative to the where and when it occurs. Both the "where" and the "when" have something to do with our sense of urgency and our expectations on system performance. The next post will be "when" you will not have to wait any longer on how DataWorks will deal with transactions that do take over 10 seconds.

Retail Inventory Control Operations - The 10 Second Rule - Part 1

Retail Inventory control operations have been DataWorks'  focus for the past 24 years. We design systems to assist buyers in creating purchase orders; receivers to process packing slips, auditors to review costs, and controllers to generate accounts payable invoices and credit memos.

One of our design tenets is that user input time on heavily-used-forms is very expensive - so we try to spend our CPU coin wisely.  If we can shave a half a second off a process, that half second gets multiplied by all our end-users doing the same process every single day.  A billion here, a billion there, pretty soon it adds up to whole lot of time for running reports, re-ordering fast movers, or dialing in a pizza.

Notice that our tenet has a condition - "Heavily-Used-Forms". If a form is used to launch a one time process or it is a rarely used configuration option, we don't spend our R&D budget on making the form into a high performance, code-injected hot rod.

Speed to save and process a transaction is of extreme importance. If a transaction takes over 10 seconds to save then the end-user's cranium shifts into idle and the neurons start filling their synaptic gaps with sudoku puzzles and we fail in our efforts to get more data for the price of one transaction.

The receiving transaction is the core of our inventory control operations -  It has a lots of moving parts and it generates a lot of transactional heat. When the receiver clicks on the process button, he or she is kicking off a big assembly line of linear processes:

1. Accommodate Units of Measure, Currency Rates, Terms Discounts, Freight Charges, Cost Changes and Vendor Allowances
2. Consider the employee's access rights and privileges
3. Update Inventory Quantity On Hand, Quantity Received, and Status
4. Flag an Item for the need to update the Stock Ledger *
5. Update a Purchase Orders' Quantity On Order and Back Order Status
6. Calculate Base Cost, Net Cost, and Landed Cost
7. Update a log for any shifts in cost or retail
8. If merchandise price tags are needed, generate a Ticket Batch
9. If a Packing Slip, generate a General Ledger journal entry to book the Asset and PO-Clearing accounts
10. If an Invoice, generate an Accounts payable Invoice with the appropriate distributions.
11. If  allocating to more than one outlet, generate one or more Transfer-Outs.
12. If Transfers are set to process in one step versus two, process one or more Transfer-Ins.

The bad news is this  gymnastic routine takes much longer than 10 seconds to stick. With large receipts of over a 100 SKUs just the calculation of new costs take longer than 10 seconds to execute.

By the way, the one thing that does not occur here is a posting to our Daily Inventory Summary system. Notice the special * above. We set a flag but we don't do any actual work. The summary table is a daily stock ledger that is used to track various pieces of information such as beginning on hand, net sales, discounts, receipts, returns, markdowns and shrink. We decided it would take too long to update the core of our analytical system. And since the stock ledger is not a requirement for daily operations we reasoned that it could wait and run at a later time.

This is actually a clue to our design thinking. Operational events are linear and need to occur in the users'  time frame;  analysis and data crunching are not time sensitive.  Analysis can run a minute, a hour,  a day or even be regenerated a year from now.

So how can we speed up operations but deal will the need for real time information?

That will be the subject of our next post.