Cobol - Re: OT - Re: Program templates as Object Classes

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Re: OT - Re: Program templates as Object Classes

Robert Wagner

2004-12-08, 3:55 am

On 7 Dec 2004 12:36:46 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>
>That seems to be another of your tin-foil hat theories.
>
>All of 'residential and commercial' consumption is around one third,
>all of 'industrial' is around one third (a bit more), all of
>transportation is around 'one third' (a bit less).
>
>There doesn't seem to be another 'one third' available.

Agriculture is the major component in industrial. In addition, meat
consumes small amounts under transportation and residential.

>In New Zealand meat production consumes almost _no_ energy. We do not
>raise animals on land irrigated by anything other than rain or diverted
>water sytems. There is no energy consumed at all.

That would be true if beef cattle fed on grass. The problem comes when
they are raised in feedlots, where energy is consumed indirectly
producing feed grains -- for irrigation, fertilizer and processing.

"The net contribution of irrigation to GDP at the farmgate is
estimated to be in the order of $920 million in 2002/03. This is over
and above GDP that would have been produced at the farmgate without
irrigation."
http://www.maf.govt.nz/mafnet/rural...mic-value02.htm

I don't know what percentage of NZ beef (by weight) comes from feedlot
vs. grass. It's definitely lower than the US. In the US, Europe and
China, well over 50% of beef comes from feedlots. Poultry and pork ALL
comes from the equivalent of feedlots. In addition, one third of US
corn feeds Asian cattle. That has to be included in meat production.

>Certainly the farmer drives a tractor (or rides a horse), and a truck
>will be used to take them to market, but so is a truck used to cart
>carrots around.

That's trivial. The big energy consumer is feed. To produce one pound
of usable meat, it takes 18 pounds of feed. Producing 18 points of
feed requires 2,000 gallons of water.

>I suspect that your 'information' comes from looneys who would
>calculate how much energy from the sun is used to grow the grass and
>then add that in as 'consumption'.

Economics are abstract to most people. Let's talk about cleanliness.
This is from sources who are not looneys.

Supreme Beef v. USDA

In December 2001, the Fifth Circuit Court of Appeals issued a decision
that some believe dealt a serious blow to the food safety reforms
instituted by the USDA in the wake of the 1993 West Coast E. coli
outbreak. The appeals court upheld a lower court ruling that the
Agriculture Department does not have the authority to shut down a
meat-processing plant that repeatedly failed tests for salmonella
contamination.

In 1998, the government unveiled a radically redesigned system of meat
inspection called Hazard Analysis and Critical Control Point Systems
(HACCP). Rather than relying on USDA inspectors to ensure that meat
and poultry coming out of the plants was safe to eat, the new system
required meat-processing plants to develop and implement their own
systems of controlling the levels of harmful bacteria in their plants.
As a way to determine whether the companies' plans were working, HACCP
regulations required microbial testing of salmonella levels in the
finished meat and poultry coming out of the plants. If a plant's
products repeatedly exceeded the salmonella limits imposed by the
regulations, the USDA could shut the plant down.

Supreme Beef Processors Inc. is a Texas-based meat processor and
grinder that at one point supplied millions of pounds of ground beef
to the public school system. In December 1999, a Supreme Beef plant
failed the USDA's salmonella tests three times in eight months; in one
test 47 percent of ground beef samples in the plant were contaminated
with salmonella. Pursuant to the HACCP regulations, the USDA notified
the company that it would pull federal inspectors out of the plant, an
action tantamount to shutting it down. The company immediately filed
suit against the USDA in federal district court. The same day, the
court granted a temporary restraining order forbidding the government
to remove the inspectors.

In the lawsuit, Supreme Beef claimed that the USDA did not have the
authority to set limits on the allowable levels of salmonella bacteria
in meat. They argued that because the bacteria is naturally occurring,
it is not an "adulterant" substance subject to regulation by the
government. Since beef may contain salmonella bacteria when it arrives
at the packing plant from the slaughterhouse, the company argued, the
level of salmonella in the finished, processed meat is not an adequate
indicator of the whether the pathogen control procedures employed in
the plant are being properly implemented. They also pointed out that
since salmonella bacteria is killed and rendered harmless when meat is
cooked properly, the presence of salmonella in the meat does not pose
a significant risk and struck down salmonella testing regulations.

The USDA appealed the case to the Fifth Circuit Court of Appeals,
which upheld the lower court decision. The court also allowed the
National Meat Association to intervene in the case, as representative
of the interests of other meat industry members.

The appeals court rejected the USDA's argument that the salmonella
tests could serve as a proxy measure for other contaminants because
measures taken to control salmonella would also likely reduce other
pathogens. The court found that since the presence of salmonella alone
does not render the product "injurious to health," the performance
standards were not within the USDA's enforcement authority.

The decision prompted vociferous protest from food-safety advocates
who believe that the elimination of the salmonella testing takes away
an important enforcement tool from the government. Carol Tucker
Foreman of the Consumer Federation of America says, "It is hard to
overrate the importance of the Supreme Beef decision. It could be
interpreted as saying there is no amount of disease causing bacteria
in raw meat or poultry that would ... violate the law." Without
objective testing standards, she fears, the new meat-inspection system
will have no teeth. And former Agriculture Secretary Dan Glickman told
FRONTLINE that he believes the decision was "a serious blow" to food
safety.

Others disagree, however. The USDA has said that it has no plans to
appeal the decision to the U.S. Supreme Court, and USDA Undersecretary
for Food Safety Elsa Murano denies that the decision diminishes the
power of USDA inspectors to ensure clean meat factories. She points
out that the USDA continues to test for salmonella, and uses the
results of the tests as indicators that there may be a problem in the
plant that needs investigation. All that has changed is the ability to
shut down a meat plant based solely on results of the salmonella
tests. "The Supreme Beef decision is one that, when we looked at it,
did not take away our authority to enforce our regulations," Murano
told FRONTLINE. "We still can shut down plants, and we have been since
the decision came out in December. ... We continue to test for
salmonella. But we use those results to point us to what we may have
to do in order to see what the plant may be missing in their
implementation of HACCP."

The battle over the salmonella testing is now turned over to Congress.
In March 2002, Senator Tom Harkin (D-Iowa), chairman of the Senate
Agriculture Committee, introduced legislation he intended to undo some
of the damage he thinks the Supreme Beef decision wrought. His
proposed legislation would clarify the USDA's authority to shut down
plants based on failed salmonella tests. When introducing the
legislation, he voiced his concerns that the meat industry was trying
to undercut the USDA's power: "We have an industry that appears dead
set on striking down USDA's authority to enforce meat and poultry
pathogen standards. And

ly, we are now at the point where the
food-safety reforms USDA enacted in 1996 are on life support."

The American Meat Institute will oppose the proposed legislation.
"Senator Harkin's bill is a political effort to legislate what science
and the judicial system do not support and what Congress has rejected
twice before," said the AMI's J. Patrick Boyle in a statement.

Observers on Capitol Hill think the possibility for passage of the
Harkin legislation is slim.

http://www.pbs.org/wgbh/pages/front...upremebeef.html

Robert Wagner

2004-12-13, 3:56 pm

On Mon, 13 Dec 2004 14:56:34 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>
>On 8-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:
>
>
>Especially since the energy costs in transporting the food isn't at an 18:1
>ratio.

Food transportation is very inefficient. When I was in the food biz we
sponsored a bill that required railroads to provide the same level of
service they had in 1948. They cried foul, said it was impossible.
Railroad transport costs half as much as truck.

Nearly all US produce is shipped by cross-country truck. Next time
you're on the highway, note how many truck trailers have a 'reefer'
(refrigeration unit). They're hauling produce. On a SWAG, they're
about 30% of trucks on the road.

>I do believe that the biggest polluters are buildings, roads, and farms.
>(nothing grows on a highway).

Roads are way under one percent of US real estate. The total of all
developed land -- cities, towns and roads -- is only 12%.

>Grain-fed humans are less impactful than humans
>fed from grain-fed cattle. Of course, cattle doesn't have to be grain-fed, in
>which the 18:1 ratio isn't so meaningful.

Right. Grass energy and protein is almost free, considering most
grassland isn't good for anything else. But it still costs money to
raise animals on grass -- for land investment, taxes, growing silage
for winter feed -- and it takes 4-5 years vs. 1 year on grain. As a
result, it costs more to produce a pound of grass-fed beef than
grain-fed. The system rewards inefficiency.

Howard Brazee

2004-12-13, 3:56 pm

On 13-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:

>
> Roads are way under one percent of US real estate. The total of all
> developed land -- cities, towns and roads -- is only 12%.

So? What percentage would make these the biggest polluters?

Howard Brazee

2004-12-13, 8:55 pm

On 13-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:

> Right. Grass energy and protein is almost free, considering most
> grassland isn't good for anything else. But it still costs money to
> raise animals on grass -- for land investment, taxes, growing silage
> for winter feed -- and it takes 4-5 years vs. 1 year on grain. As a
> result, it costs more to produce a pound of grass-fed beef than
> grain-fed.

College trained pianists cost more than untrained pianists. But some people
like listening to them and are willing to pay for them.

> The system rewards inefficiency.

What system is this? Individual people pay for what they want. The reward
comes from the consumer and goes to the supplier. Systems are for central
governments who decide what people should want and remove the individual choice.

Elitists are all for deciding what are worthy ways for others to spend their
time and money.

Howard Brazee

2004-12-13, 8:55 pm

On 13-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:

> Food transportation is very inefficient. When I was in the food biz we
> sponsored a bill that required railroads to provide the same level of
> service they had in 1948. They cried foul, said it was impossible.
> Railroad transport costs half as much as truck.

Why do you think the Railroads don't want to get more business, and require
people like you to decide how their businesses should run?

Is it because of their obscene profits that result from not having any
competition from the trucking industry? Or do they believe that since they had
their turn, they should now gracefully step aside and let the truckers steal
from the public instead?

Richard

2004-12-14, 3:55 am

> People can only buy what's on the shelf.

> Think less like a consumer,

That first quote is you thinking entirely like a consumer.

If I want something then I tell the owner/manager, if they don't want
to get it for me I go elsewhere until someone will.

> Some foods that people buy ready-made are ridiculously easy to make
from scratch.
Excuse me, but are you trying to tell that to a New Zealander ?

Robert Wagner

2004-12-14, 8:55 pm

On Tue, 14 Dec 2004 15:46:13 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>
>On 13-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:
>
>
>Lots more choices are on the Supermarket shelves than were when I was a child.
> Not having more choices isn't a good business strategy.

When you were a child, the average supermarket covered 15K square
feet, carried 10K items and was one mile from your house. Today, the
average supermarket covers 40K square feet, carries 25K items and is
three miles from your house.

When you were a child, you may have lived near a downtown full of
mom-and-pop stores offering perhaps 10-15K items. Now, they've been
replaced by a Wal-Mart SuperCenter that carries 65K items.

On both cases, variety was the result of readily available
transportation and centralization.

Robert Wagner

2004-12-14, 8:55 pm

On Tue, 14 Dec 2004 15:50:31 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>
>On 13-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:
>
>
>Paid for by whom?

Guess. Governor Aaarnold has already approved the sale of bonds, I
believe. They've been planning it for six years. It will be
self-sustaining in 2020. Environmentalists are upset.

There is another in the works, to go from Portland to Seattle and
(maybe) on to Vancouver. Do you think Gates and Portland-resident Paul
Allen will sponsor it? If so, they could call it WinDozeTrailblazers
(after Allen's team). No, I've got it -- the Everyman's 959 (after the
ultimate Porsches they bought). Ad copy: Have YOU gone 220 mph without
leaving the ground?

Richard

2004-12-14, 8:55 pm

> Every time they add a new item, they must delete another item to make
room for it.
> A w

earlier, the deleted item was considered 'what people want to
buy.'

Supermarkets keep a very careful eye on 'stock turn'. This is the
number of times the shelf space gets refilled and sold again. Those
with the lowest turn are deleted, ie what people are _not_ buying.

> Every w

they're denying people access to things they want.

If they want it and are buying it then it would have a high stock turn
and stay on the shelves. If just one wants it and buys it once a month
then they can get it from someone that cares about such things.

> The decision is often based on 'push' rather than 'pull'. They're
pushing
> items they _hope_ people will want .. not because it's better but
> because it has a higher profit margin.

And if they don't buy it then the space will be reused for something
else.

> How many consumers say 'I'd rather buy y than x because the store
> makes more money?' I do.

You are not demonstrating any expertise at all in how 'the store makes
more money'. Profit margin per item on the shelf is irrelevant. What
counts is profit on each basket load going out the checkout and that
requires the customer to put the item in the basket.

> If artisan pain au levain were priced for 60% gross profit,
supermarkets would overflow
> with it.

You seem to be quite clueless about economics. If there was a 60%
margin then either:

it is priced too high and no one will buy it
or

the buying price is too low and the supplier won't make it

Richard

2004-12-14, 8:55 pm

> If artisan pain au levain were priced for 60% gross profit,
supermarkets would overflow with it.

No. WRONG. If it were priced for 60% profit then either:

customers would not buy because it was far too expensive

or

suppliers would not make it because they would lose money if they
did.
When you understand economics 101 please do come back and play again.

Robert Wagner

2004-12-15, 3:55 am

On 14 Dec 2004 15:07:29 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>room for it.
>buy.'
>
>Supermarkets keep a very careful eye on 'stock turn'. This is the
>number of times the shelf space gets refilled and sold again. Those
>with the lowest turn are deleted, ie what people are _not_ buying.

That's what they tell people. In fact, they have no way of measuring
'turns' on a foot of shelf space. If you think they do, explain in
detail how it's done.

>
>If they want it and are buying it then it would have a high stock turn
>and stay on the shelves. If just one wants it and buys it once a month
>then they can get it from someone that cares about such things.

There are very few one-unit-per-month items on the shelf. The
difference between old and new items is much more subtle.

>You are not demonstrating any expertise at all in how 'the store makes
>more money'. Profit margin per item on the shelf is irrelevant. What
>counts is profit on each basket load going out the checkout and that
>requires the customer to put the item in the basket.

That somewhat contradicts what you said above. Items that don't move
wouldn't be on the shelf. It works like this: shelf time is
proportional to profit margin. A diamond in a jewelery store has a
shelf life of six months and fetches 50% profit. A bag of sugar has a
shelf life of one w

and fetches 10% profit. The reason WHY diamonds
command higher profit than sugar is because they move slower. If one
knew the 'velocity' of each item, as you claim above, he would know
the profit in baskets without looking at checkout data.

In the real world, we use a system called The Retail Method Of
Inventory Control to compute cost of sales and thus gross profit
(sales - cost of sales = gross profit). There are many components in
cost of sales -- base cost, ad losses, mark ups and mark downs,
inventory change, billing errors, 'pack errors' and finally shrink --
the unexplained difference, which they say is theft but is mostly
undetected or unreported errors elsewhere.

The Retail Method would work fine if there were no inventory change
for the period. When there is, it has fatal flaws in the way it
calculates numbers. It assumes the mix of products going out the door
(and coming in the back door) is the same as the mix of products on
the shelf. As I showed above (agreeing with you), product on the shelf
has a higher average margin than that going out the door.

>supermarkets would overflow with it.
>
>You seem to be quite clueless about economics.

<self-flagellation>

>If there was a 60% margin then either:
>
>it is priced too high and no one will buy it

No, they might buy it more because of perceived value. Your mistake is
assuming the market is rational.

>or the buying price is too low and the supplier won't make it

The premise is the supplier made it. Even Wal-Mart doesn't squeeze
suppliers that tight. If they did, their stores would be empty.

Chuck Stevens

2004-12-15, 3:55 pm

"Robert Wagner" <spamblocker-robert@wagner.net> wrote in message
news:8e7vr0ho6e51vb3jpev4r78aiusbibmi1d@
4ax.com...

> That somewhat contradicts what you said above. Items that don't move
> wouldn't be on the shelf. It works like this: shelf time is
> proportional to profit margin.

Maybe. Maybe the important relationship between the two factors is the
reverse.

> A diamond in a jewelery store has a
> shelf life of six months and fetches 50% profit. A bag of sugar has a
> shelf life of one w

and fetches 10% profit. The reason WHY diamonds
> command higher profit than sugar is because they move slower.

Another reason diamonds command higher profit than sugar is because the
market will pay whatever it costs to buy them. The market for this
particular commodity is *very* tightly controlled.

And there's profit at the retail level and profit at the
wholesale/distribution level. While the reason you cite might be *a*
downstream reason applicable at the retail level, the big reason diamonds
command higher profit than sugar is because firms like DeBeers SA have
decreed that's the way it's going to be if you're going to buy diamonds
wholesale, and the supply is limited (many say artificially) precisely to
ensure high profit.

So your "The reason WHY diamonds command higher profit ..." is really "A
reason ...". A bigger reason, I think, is "because consumers don't rebel at
the high prices and the high profit margins by refusing to buy, and because
suppliers conspire to keep the profit margins high by keeping supplies low."

-Chuck Stevens

Robert Wagner

2004-12-15, 3:55 pm

Howard Brazee

2004-12-15, 8:55 pm

Richard

2004-12-15, 8:55 pm

Robert Wagner

2004-12-15, 8:55 pm

On Wed, 15 Dec 2004 08:44:18 -0800, "Chuck Stevens"
<charles.stevens@unisys.com> wrote:

>"Robert Wagner" <spamblocker-robert@wagner.net> wrote in message
> news:8e7vr0ho6e51vb3jpev4r78aiusbibmi1d@
4ax.com...
>
[color=darkred]
> So your "The reason WHY diamonds command higher profit ..." is really "A
>reason ...". A bigger reason, I think, is "because consumers don't rebel at
>the high prices and the high profit margins by refusing to buy, and because
>suppliers conspire to keep the profit margins high by keeping supplies low."

Diamonds were a poorly chosen example of a low-volume, high-profit
item. While in the supermarket today I noted a 12 foot facing (shelf
space) for 5lb bags of sugar vs. a 3 inch facing for these better
examples:

... A 1.5oz plastic bottle of oregano for $3.
One pound of high-quality oregano, not the cheap Mexican variety
they sell in supermarkets, *retails* for $5.50. The store paid less
than .50 for the bottle and .50 for the oregano. Gross profit: 67%

... A 4oz box of tapioca (cassava root) for $3.
One pound of tapioca retails for $2.50. The store paid less than .05
for the box and .45 for the tapioca. Gross profit: 83%

The reason WHY profit is so high is not because supply is manipulated,
it's because velocity is low. The items move slower than sugar per
inch of shelf space.

To compare prices between your neighborhood supermarkets, just go to
Yahoo/Financial, enter or lookup the symbol for a company, select
Income Statement, divide Gross Profit by Total Revenue. That's the
all-important gross profit percent. Average is 28%. If a chain is
higher, its prices are higher than others; if it's lower, its prices
are lower.

While we're on the topic, ordinary sugar is a marvel of purity. It is
99.98% sucrose, and half of the remaining .02% is water. Bottled
drinking water contains far more impurities. The only cleaner
substance available to the average consumer is distilled water, which
is 99.998% pure but is not commonly used for drinking.

Chuck Stevens

2004-12-15, 8:55 pm

"Robert Wagner" <spamblocker-robert@wagner.net> wrote in message
news:v7d1s098cuafsfd6ethrn1ehl57kf0ktf9@
4ax.com...

> Diamonds were a poorly chosen example of a low-volume, high-profit
> item.

Ummm... I don't think I'm the one that picked this example in the first
place.

> The reason WHY profit is so high is not because supply is manipulated,
> it's because velocity is low. The items move slower than sugar per
> inch of shelf space.

I can accept that "velocity is low" is a contributing reason. Given some
figures, if I cared, I might even be convinced that it is a *significant*
reason, perhaps even the *primary* reason. What I do not believe is that
there is absolutely *NO* possibility that any other reason other than
"because velocity is low" has *any* impact, however slight, on the margin of
profit of high-profit items.

-Chuck Stevens

Robert Wagner

2004-12-16, 3:55 am

On 15 Dec 2004 09:40:08 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>
>Geez, Robert, you claimed to work in a Supermarket.
>
>Each item is bar coded, as it goes out the counter it is recorded.
>Thus they know how many were sold each month.

Bzzzt, wrong. No store has 100% scan rate. I've seen some as low as
70%. If a checker can punch .99 Grocery, you've lost control of
inventory.

Thirty years ago, management was as gullible as you are. They thought
they could manage shelf inventory and "close the loop" by automating
purchases. It hasn't happened in any US supermarket company. General
merchandisers such as Wal-Mart have seen greater success, but still
not 100%.

> By recording how many
>fit on the allocated shelf space a simple calculation shows the average
>time the item is on the shelf.

How does the computer know about allocated shelf space? I've never
seen that in a database. Even if it was recorded on the initial 'set',
it would be invalid within months. Stores frequently 're-set' shelf
space without bothering to update a database.

>How hard is that ?

It's VERY hard in practice. It seems easy to bystanders who get their
'information' from popular press.

>
>No, they wouldn't be on the shelf because the supermarket removes them
>and puts something there that will generate profit. Dead space is no
>use.

There is no dead space in a supermarket. That's why I said every new
item requires that another be deleted. Most people have a hard time
accepting the concept.
>
>diamonds
>
>Reinforcing my view that you are clueless about supermarkets. Jewelery
>stores have nothing to do with supermarkets.

One supermarket chain I worked for had jewelry counters in the stores.
It also had gun departments. 'I'll take a rib-eye steak and .. one of
them Saturday Night Specials.'

The same principles apply to all retail stores. Saying jewelry had
"nothing to do with supermarkets" reveals your inability to think in
the abstract. You sound like those who say 'This business is unique.
It's not like any other business you've seen.' Yeah, right, only a
genius can understand it.

My reply to Chuck Stevens has updated comparisons.

>He knows the stock turn by capturing the checkout data.

I've never seen a system that even compared checkout data with
purchase data. That would be the easiest and first step one would
expect to see.

I've never seen a system that compared movement data from purchases OR
sales to shelf space allocation.

The marketplace isn't as efficient as people imagine.

>If one supermarket is full of your high priced product then shoppers
>will simply go elsewhere to get what _they_ want.

MY high-priced product? I worked for chains that ran 18% GP vs. the
industry norm of 28%. Shoppers did go elsewhere, to get the service
they deserved. Product selection was the same and prices were higher.

Howard Brazee

2004-12-16, 3:55 am

James J. Gavan

2004-12-16, 3:55 am

Robert Wagner wrote:
[color=darkred]
>On Wed, 15 Dec 2004 08:44:18 -0800, "Chuck Stevens"
><charles.stevens@unisys.com> wrote:
>
>
>
Robert, Robert,

This one does go on and on - Gross profit, gross profit per square foot,
shelf space, stock-turnover, Pareto analysis etc. Granted individual
products may have a high gross percentage, but unless the name of the
game has changed considerably over the decades, it used to be that
supermarkets made approximately 1% NET. The intermediary figures have
their place, but in the end what really matters : 1% NET = $xxx,xxx,xxx

Richard mentioned Sainsbury's and the pats of butter - must have been a
fair while ago, when he was about 5-10. A third or fourth-generation
family concern with an excellent reputation and bloody good quality
products. They were opening brand new buildings before I left in'75 even
sporting their own-label booze. Can't get that here in Alberta, although
I'm aware you can down in Montana. (Provincial regulations - must be a
separate building for booze - and that primarily is toadying to the
religious right, besides which we don't want all those drunken injibums
sprawling all over the supermarket floor),

Sainsbury's - latest generation in charge - didn't do too well.
Currently they now hold a minority stake and outsiders are running the
show. Latest CEO, or previous, introduced automatic warehousing - you
know the stuff, rollers, picking up cases etc., sending them to
transport points. Well appears the whole thing was one glorious IT mess
- no specific technical points quoted. So here they are with POS,
probably scanning for shelf replacement, or back room stock replacement
: a + b - c = d, i.e. "d" equals your order quantity, probably also
tuned to forecasting.

Net result you get zero of Product x - 'cos according to the system you
still have a shelf full. But the customers are looking at empty space.
Net result some 129 million pounds down the drain on IT and now
recruiting some 3,000 new retail staff who can visually check when a
customer says "There ain't any". What a way to design a computer system.

Sainsbury's are obviously striking a positive note in all this mess, but
the financial analysts aren't giving them much hope of pulling through.
When you think, if I steal four cans of Green Giant from the shelf, and
just how many cans they now have to sell to cover my pilferage, think of
the number of cans to cover the 129 million expense/loss ! .

Jimmy

Robert Wagner

2004-12-16, 3:55 am

On 15 Dec 2004 09:53:17 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>The relationship there is if it is overpriced then no one buys it and
>it stays on the shelf. The supermarket will notice this and 1) slash
>the price to get the stuff moving, 2) drop the product line and put
>something in that space that generates a profit.
>
>The problem with many mom&pop businesses is that they open a store full
>of new products, say furniture. Some sell, some do not. The ones that
>do not sell are because the shoppers don't want them, or at least not
>at that price. The stuff that sells is replaced, but eventually
>everyone that will buy that has one. After a time the shop is full of
>stuff that no one wants to buy.
>
>Supermakets work because they don't do that.

You're astute to see that dynamic. I see it most in clothing, where
the store buys an assortment of sizes recommended by the manufacturer.
The first batch has 5% extra small, 5% extra large and 90% between.
The medium sizes sell, the extremes don't, so the store orders another
batch of assorted sizes. After a few cycles, the shelf contains
nothing but extra small and extra large.

Management says 'That ABC crap isn't moving. Let's replace it with
DEF.' The bad guy here is the systems we provide. In the apparel biz,
SKUs are assigned to a style-color, not to a size. Whereas enlightened
inventory management looks at individual selling units rather than
product lines, that can't be done with clothing because the lexicon,
if you will, doesn't differentiate size.

I know that to be true because I recently worked for the largest
manufacturer of leisure clothing and shoes.

Robert Wagner

2004-12-16, 8:55 am

On Thu, 16 Dec 2004 02:55:35 GMT, "James J. Gavan" <jjgavan@shaw.ca>
wrote:

>Robert Wagner wrote:
>
>Robert, Robert,
>
>This one does go on and on - Gross profit, gross profit per square foot,
>shelf space, stock-turnover, Pareto analysis etc. Granted individual
>products may have a high gross percentage, but unless the name of the
>game has changed considerably over the decades, it used to be that
>supermarkets made approximately 1% NET. The intermediary figures have
>their place, but in the end what really matters : 1% NET = $xxx,xxx,xxx

It's true that supermarkets make about 1% net. One percent of a HUGE
sales number is a substantial profit. However, it works both ways.
Supermarkets that lose focus can and do show 1% net loss. Based on a
HUGE sales number, that's a substantial loss. I know because I've
worked for them.

>Richard mentioned Sainsbury's and the pats of butter - must have been a
>fair while ago, when he was about 5-10. A third or fourth-generation
>family concern with an excellent reputation and bloody good quality
>products. They were opening brand new buildings before I left in'75 even
>sporting their own-label booze. Can't get that here in Alberta, although
>I'm aware you can down in Montana. (Provincial regulations - must be a
>separate building for booze - and that primarily is toadying to the
>religious right, besides which we don't want all those drunken injibums
>sprawling all over the supermarket floor),

Having written the Texas Alcoholic Beverage Code, I understand why
separate buildings are required. It's not because of the religious
right, who make a convenient scapegoat; it's because retailers don't
want to work seven days a w

nor stay open till 2am.

The underlying concept is standalone liquor stores vs. mass
merchandisers. When that collapses, as it did in California in the
'60s, 'moral' objections to late-night and Sunday sales quickly
evaporate. It's not about morality, it's about commerce.

>Sainsbury's - latest generation in charge - didn't do too well.
>Currently they now hold a minority stake and outsiders are running the
>show. Latest CEO, or previous, introduced automatic warehousing - you
>know the stuff, rollers, picking up cases etc., sending them to
>transport points.

I know it well. I orchistrated it in the '70s and '80s.

> Well appears the whole thing was one glorious IT mess
>- no specific technical points quoted. So here they are with POS,
>probably scanning for shelf replacement, or back room stock replacement
>: a + b - c = d, i.e. "d" equals your order quantity, probably also
>tuned to forecasting.

That's all management-speak. In practice, automatic replacement has
never worked.

>Net result you get zero of Product x - 'cos according to the system you
>still have a shelf full. But the customers are looking at empty space.
>Net result some 129 million pounds down the drain on IT and now
>recruiting some 3,000 new retail staff who can visually check when a
>customer says "There ain't any". What a way to design a computer system.

That's what happens when management believes what they read in airline
magazines rather than dealing with reality.

>Sainsbury's are obviously striking a positive note in all this mess, but
>the financial analysts aren't giving them much hope of pulling through.
>When you think, if I steal four cans of Green Giant from the shelf, and
>just how many cans they now have to sell to cover my pilferage, think of
>the number of cans to cover the 129 million expense/loss ! .

Theft is trivial. The problem is mismanagement. Stupid ideas cost
owners/stockholders billions of dollars.

Robert Wagner

2004-12-16, 8:55 am

On Wed, 15 Dec 2004 16:23:09 -0800, "Chuck Stevens"
<charles.stevens@unisys.com> wrote:

>I can accept that "velocity is low" is a contributing reason. Given some
>figures, if I cared, I might even be convinced that it is a *significant*
>reason, perhaps even the *primary* reason. What I do not believe is that
>there is absolutely *NO* possibility that any other reason other than
>"because velocity is low" has *any* impact, however slight, on the margin of
>profit of high-profit items.

OK, there are market niches that attempt to manipulate prices. One of
them is spices. Two companies 'own' the market and think they can do
whatever they want. Their ownership is all based on marketing.
Independents sell the same spices based on cost-plus rather than 'what
the market will bear.' You can occasionally see the difference in the
ethnic or bulk sections of the supermarket.

Low-volume items such as tapioca are also captives of marketing.
Supermarkets cannot handle thousands of suppliers. They winnow it down
to a few dozen and live with the inefficiency and price-gouging that
produces.

Robert Wagner

2004-12-16, 8:55 am

On 15 Dec 2004 17:05:43 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>manipulated,
>
>No. The reason why it gets much less shelf space is because number of
>items sold is low, this brings the stock turn up (being ratio of items
>sold to space allocated).

Isn't that what I just said?

>Setting shelf space does _not_ manipulate supply, as you claim, If
>there is one on the shelf then supply is available.

By your theory, they should allocate shelf space for a one day supply
of everything.

>You are proposing a theory that supermarkets will raise the price of an
>item as the number of sales falls. This is bunkum. If they raise the
>price then fewer will sell.

Did I say that? It's more likely they'll replace it with an item they
hope will sell better.

>Or perhaps you imagine they can raise the profit margin _without_
>increasing the price.

That's not possible. Everyone pays the same cost .. except Wal-Mart.

>
>You just made that up.

No, I substantiated it with details that can be verified.

>than others; if it's lower, its prices are lower.
>
>That is crap. There is more to profit than just the price. There are
>overheads and volume. The most profitable supermarket around here is
>the 'Pak'N'Save' which has the lowest prices for most items.

I said that's how to measure prices from the consumer's point of view,
not how to measure profit for the stockholder's point of view.

James J. Gavan

2004-12-16, 3:55 pm

Robert Wagner wrote:

>On 15 Dec 2004 09:53:17 -0800, "Richard" <riplin@Azonic.co.nz> wrote:
>
>
>
>
>You're astute to see that dynamic. I see it most in clothing, where
>the store buys an assortment of sizes recommended by the manufacturer.
>The first batch has 5% extra small, 5% extra large and 90% between.
>The medium sizes sell, the extremes don't, so the store orders another
>batch of assorted sizes. After a few cycles, the shelf contains
>nothing but extra small and extra large.
>
>Management says 'That ABC crap isn't moving. Let's replace it with
>DEF.' The bad guy here is the systems we provide. In the apparel biz,
>SKUs are assigned to a style-color, not to a size. Whereas enlightened
>inventory management looks at individual selling units rather than
>product lines, that can't be done with clothing because the lexicon,
>if you will, doesn't differentiate size.
>
>I know that to be true because I recently worked for the largest
>manufacturer of leisure clothing and shoes.
>
>
Again because you worked at one place you state 'One system fits all'.
Back in 1967 we were using Kimball Tags (from Litton Industries) for
ladies fashions :-

1 - SKU #
2 - Colour
3 - Size

We didn't buy an assortment. At least in theory merchandisers worked on
a new fashion based on previous history for similar lines in the same
category, (bearing in mind this year's Spring fashions were displayed on
the catwalk perhaps some 12 months previous). On a w

-by-w

basis
sell quantities of Colour x and Size y - and that was what was
re-ordered, subject to the manufacturer either having stock or the
ability to make a further manufacturing run. If unavailable, look for a
similar line but using the same Colour/Size breakdown.

Jimmy

Richard

2004-12-16, 3:55 pm

RW >> The reason WHY profit is so high is not because supply is
RW >>manipulated, it's because velocity is low.

items[color=darkred]
[color=darkred]
> Isn't that what I just said?

No. You just said they put the price up (ie more profit margin).

> By your theory, they should allocate shelf space for a one day supply
> of everything.

That would be ideal, yes. However other factors apply, such as
suppliers paying for additional space so their product gets more
exposure. Also space cannot be allocated sensibly at less than one
item's width.

an[color=darkred]
[color=darkred]
>Did I say that?

Yes, you said they set the profit (and thus price) depending on
velocity (see top line).

> I said that's how to measure prices from the consumer's point of
view,

Yes, and I said you were wrong.

James J. Gavan

2004-12-16, 3:55 pm

Robert Wagner wrote:

>Theft is trivial. The problem is mismanagement. Stupid ideas cost
>owners/stockholders billions of dollars.
>
>
>
Probably true with regard to food - all customers going through
checkouts. If my memory serves me correctly, chains/department stores -
loss due to theft, somewhere around 3% of gross. Staff can be the major
contributors, but customers aren't far behind.

Even supermarkets - Caters in SE London which we bought out; again a
family concern like Sainsbury's, but the family members who were
directors were living off the hog. Having lunch with their Operations
Director, an old-time retailer. He related how he would visit stores in
Essex, doing spot check-ups. Walks up to an entrance where he sees a
customer walking out a manual lawn-mower, no tags or bags attached. When
he gets in the store he gives 'em hell for not putting some identifier
on the purchase. Response, "BUT, we haven't sold any lawn-mowers to-day !

That would require a fairly large number of Green Giant sales to
replace the loss. :-)

You have to have the balls to do it - but thieves will walk into the Bay
here (department store), looking 'officious' as though they were a
supplier's reps and brazenly walk out of the exit pushing a whole rack
of fashions on a metal display stand mounted on wheels !

Jimmy

Robert Wagner

2004-12-16, 8:55 pm

On Wed, 15 Dec 2004 15:14:04 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>
>How?

How overcome The Human Condition defies solution. Some think
aboriginals and american indians lived in harmony with nature and each
other. Not so. They too had pathological predators such as Commanche
and Apache. They too fouled their own nests.

The Jerry Springer Show reveals the human condition brilliantly. Its
premise is entertainment, not remediation. Maybe that's the closest we
can get to a solution.

Robert Wagner

2004-12-16, 8:55 pm

On Wed, 15 Dec 2004 15:20:51 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>Groceries have a special need to have most *everything* consumers want. So
>they stock some items that aren't profitable for them just to make sure that
>customers are comfortable that they will find what they want without going to a
>different grocery.

Basically right but some of them lose focus, especially upscale
supermarkets. When I shopped at Kings (New Jersey), I always had to go
to ShopRite for three or four items that Kings didn't carry. I've
developed some quick tests:

... Barley. If it's in the soup aisle rather than grains, deduct half a
point. If they have only Quick-Cooking, deduct a full point. If they
don't have it at all, deduct five points.

... Arizona Tea in gallons. If they sell 12oz bottles (for $1.50) but
no gallons, deduct a full point. If they sell high-profit foo-foo tea
instead of Arizona, deduct five points.

>Every once in a while, some guy comes by and demands a discount on the loss
>leaders - this person believes everybody is a scammer and he wins by scamming
>better than everybody else. Often he gets the discount just to get rid of him.

It's a lot more common for manufacturers to demand a discount via
coupons. Some of that coupon discount is passed back to retailers.

> This is a cost to the store, not a profit. Don't worry, it makes the profit
>from ordinary shoppers who pass by the lentils and buy prepared dinners.

Management deprecates the intelligence of customers, then panders to
it by offering Idiot Food. They can't seem to decide whether they love
or hate customers.

Someone should point out they have a terrific business concept, if
only they could purge the system of Customers.

Robert Wagner

2004-12-16, 8:55 pm

On 16 Dec 2004 00:17:35 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>
>Every supermarket I use here has 100% scan rate and has done so for
>years. When I worked on modifying Supermarket systems 20 years ago it
>was 100% scanning. This includes fruit and veg. How hard is it for
>you ?

'100% scanning' means every item has a bar code or Price LookUp (PLU).
We've had that for well over 20 years. '100% scan rate' means every
item scans correctly. It means there are no Department Keys on the
keyboard. The clerk cannot enter a price.

It's especially hard for Direct Store Delivery (DSD) merchandise.
Manufacturers introduce new items without following procedures, or
they give the case code instead of the item code.

If you hear calls for 'Price Check on aisle 3', the store does not
have 100% scan rate.

>And how could your self-checkout work if it is not 100% scan ?

An attendent with a keyboard oversees the checkout stations. She can
key a price for 'no scan' items.

Fruits & vegs are not pre-packaged. The customer must navigate menus
to identify the item. If it's a new item not pictured .. that's a
problem.

>
>How difficult is it ? In the UK the Supermarkets are 100% scan.

It's not difficult but it's too expensive. To achieve 100% scan rate,
the store must scan every item BEFORE it is put on the shelf. That
means after the truck arrives and before the stuff is put up, line
them up in the back room and scan one of each with a handheld scanner.
When the DSD vendor arrives, scan one of each BEFORE he goes to the
shelf. For produce, someone must key a valid PLU and verify the price.

If the store manager thinks he can get by with catching 'not on file'
at the checkout, the store will NOT have 100% scan rate.

>
>Yes. Not only that, but in this part of the world (mainly Aus)
>supermarkets _sell_ some of the shelf space to suppliers. They don't
>get product on shelves without paying for it.

That's common in the US as well. Small local suppliers sometimes
refuse to pay. As a result, customers can't buy their products.

>
>What a surprise, there are things you haven't seen.

Store layout people usually use CAD systems that don't interface with
other databases.

Richard

2004-12-17, 3:55 am

> That means after the truck arrives and before the stuff is put up,
line
> them up in the back room and scan one of each with a handheld
scanner.

You may not understand this part of the business, but they actually do
record deliveries into the system. Between coming off the truck and
being put on the shelves the stock receival process is done. If the
item isn't in the system it can't be received. They don't just take it
off the truck and stick it on the sheves as you imply.

Robert Wagner

2004-12-17, 3:55 am

On Thu, 16 Dec 2004 18:27:10 GMT, "James J. Gavan" <jjgavan@shaw.ca>
wrote:

>Robert Wagner wrote:
>
>Probably true with regard to food - all customers going through
>checkouts. If my memory serves me correctly, chains/department stores -
>loss due to theft, somewhere around 3% of gross. Staff can be the major
>contributors, but customers aren't far behind.

Theft is less than half of one percent of sales .. unless the store is
in a ghetto.

>Even supermarkets - Caters in SE London which we bought out; again a
>family concern like Sainsbury's, but the family members who were
>directors were living off the hog. Having lunch with their Operations
>Director, an old-time retailer. He related how he would visit stores in
>Essex, doing spot check-ups. Walks up to an entrance where he sees a
>customer walking out a manual lawn-mower, no tags or bags attached. When
>he gets in the store he gives 'em hell for not putting some identifier
>on the purchase. Response, "BUT, we haven't sold any lawn-mowers to-day !

Your story evokes fond memories of a British manual lawn mower I used
in West Texas. It was expensive, about $150. I could have bought a
power mower for less. It was a marvel of precision and so easy to
push.

>You have to have the balls to do it - but thieves will walk into the Bay
>here (department store), looking 'officious' as though they were a
>supplier's reps and brazenly walk out of the exit pushing a whole rack
>of fashions on a metal display stand mounted on wheels !

They'd be easy to spot. Just look for the ones wearing garish clothes.
Didn't Monty Python do a skit about this?

Howard Brazee

2004-12-17, 8:55 am

Howard Brazee

2004-12-18, 12:46 pm

Groceries have a special need to have most *everything* consumers want. So
they stock some items that aren't profitable for them just to make sure that
customers are comfortable that they will find what they want without going to a
different grocery.

It's sort of like casinos making sure they have cheap food - keeping hungry
gamblers from leaving the premises.

Every once in a while, some guy comes by and demands a discount on the loss
leaders - this person believes everybody is a scammer and he wins by scamming
better than everybody else. Often he gets the discount just to get rid of him.
This is a cost to the store, not a profit. Don't worry, it makes the profit
from ordinary shoppers who pass by the lentils and buy prepared dinners.

Robert Wagner

2004-12-18, 12:46 pm

On 14 Dec 2004 14:49:29 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>items and is
>
>The Supermarket that _I_ go to is 7K sqft and I cycle to it.

I can't believe the tiny supermarkets outside the US. I used to work
for German supermarket operators Liebbrand and Tanglemann, whose
average size was 15K square feet. Customers expected to wait in line
30 minutes. They gave us freezers to put by the checkout, then had to
explain their function -- to hold customers' frozen food while
waiting. We laughed. Nobody waits longer than 10 minutes.

Now we have self-checkout. You scan your own. It's done with voice
prompts, animation and touch-screen. Tendering (payment) is especially
slick automation. It accepts bills, coins, credit and debit cards.
Wait time is usually zero.

>mom-and-pop stores
>
>I still do.

We too have towns like that. They're promoted as tourist attractions
on polished Web pages. The locals are a bit corrupted by the process.
They're now selling overpriced crafts and $3 cups of latte to the
yuppies.

Robert Wagner

2004-12-18, 12:46 pm

Robert Wagner

2004-12-18, 12:46 pm

On 17 Dec 2004 11:51:55 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>you imply.
>
>That's expensive. Low-cost retailers don't think it's necessary.
>
>Excuse me but what is "expensive and not necessary" ?
>
>Recording deliveries ?
>Having the item in the system ?
>
>Do you imagine anyone just 'takes stuff off the truck and puts it on
>the shelf' ? Without counting the boxes, without checking the
>documentation, without recording it in the system ?

Buying and receiving deal with cases. That doesn't guarantee that the
SKU (retail unit) will scan.

Robert Wagner

2004-12-18, 12:46 pm

On Fri, 17 Dec 2004 15:27:52 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>
>On 17-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:
>
>
>Why would they want to use coupons in before scanning? RFID is primarily used
>on pallets, not individual items - exceptions are expensive items that aren't
>groceries. I'm not aware that RFID is intended for use on the customer side
>of retail stores.

RFID tags are not used for retail because they cost .50. In the future
they might cost .05 or even .01 (using organic rather than
electronic).

>
>Do supermarkets buy loose produce that is not packaged up?

Yes.

>Does loose produce have scan codes? I've seen clerks type in the code for
>these.

They're called PLUs (Price LookUp). They can be used for fast food
and other items that don't scan. For instance, I've used them for
individual pencils

Howard Brazee

2004-12-18, 12:46 pm

Robert Wagner

2004-12-18, 12:46 pm

Robert Wagner

2004-12-18, 12:46 pm

Chuck Stevens

2004-12-18, 12:46 pm

Robert Wagner

2004-12-18, 12:46 pm

Robert Wagner

2004-12-18, 12:46 pm

James J. Gavan

2004-12-18, 8:55 pm

-by-w

Robert Wagner

2004-12-20, 3:55 am

Robert Wagner

2004-12-20, 3:55 pm

Robert Wagner

2004-12-20, 3:55 pm

Robert Wagner

2004-12-22, 8:55 am

James J. Gavan

2004-12-22, 8:55 am

-by-w

Richard

2004-12-22, 8:55 am

Richard

2004-12-22, 8:55 am

Robert Wagner

2004-12-22, 8:55 am

On 16 Dec 2004 18:02:11 -0800, "Richard" <riplin@Azonic.co.nz> wrote:

>line
>scanner.
>
>You may not understand this part of the business

Oh that I weren't so stupid.

>record deliveries into the system. Between coming off the truck and
>being put on the shelves the stock receival process is done. If the
>item isn't in the system it can't be received. They don't just take it
>off the truck and stick it on the sheves as you imply.

That's expensive. Low-cost retailers don't think it's necessary.

Robert Wagner

2004-12-22, 8:55 am

On Fri, 17 Dec 2004 14:39:34 GMT, "Howard Brazee" <howard@brazee.net>
wrote:

>Before scanning each item is expensive - RFID will probably suffice.
>
>If someone enters the code manually, it isn't scanned - but the computer still
>keeps track of it just the same.

They can't put RFID on a coupon. They can't put it on loose produce.

Howard Brazee

2004-12-22, 8:55 am

On 17-Dec-2004, Robert Wagner <spamblocker-robert@wagner.net> wrote:

>
> They can't put RFID on a coupon.

Why would they want to use coupons in before scanning? RFID is primarily used
on pallets, not individual items - exceptions are expensive items that aren't
groceries. I'm not aware that RFID is intended for use on the customer side
of retail stores.

> They can't put it on loose produce.

Do supermarkets buy loose produce that is not packaged up?

Does loose produce have scan codes? I've seen clerks type in the code for
these.

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