jakit

Pizzametrics

An email exchange between myself and Greg Carson.

My initial email:

Imagine this.

You're the owner of a small pizza place. A new corporate place opens across the street. Their drivers are better trained and have faster cars. Plus, they have more cooks and faster ovens so the pizzas come out quicker.

Traditionally, you thought pizza delivery was all about the speed of the driver. But you can no longer compete on that level.

What can you do to compete?

The obvious answer is actual reality; the quickness of the run is affected mostly by; 1.) the quickest path taken between orders on the run and 2.) the sorting and allocating of orders for particular runs.
To put it simply, 1.) most people know the quickest route from Montclair Village to Snake and Skyline, but do they know the quickest route from Snake and Skyline to Mountain and Avoca? and 2.) If you take Snake with Colton and leave the Piedmont order for the other guy, the Piedmont order will get there quicker than if you take Snake and the Piedmont order and leave Colton for the other guy.

That seems too obvious to include as a revelation in the movie. So I was wondering if you could think of something else.

But I don't think I'll go that route anyway, because although it might be interesting in theory and on paper (trying to create the most efficient pizza delivery model... hey, that could be your Master's
thesis) it doesn't necessarily translate well to film.

I was just thinking about it because I'm reading Moneyball and that's what it's all about.

Actually, the way the screenplay is now, is quite the opposite of Moneyball. Whereas Moneyball favors strict analysis over "hunches", the film is more about listening to the voice inside (both in pizza delivery and love, as well as life in general)... you know, "use the force Luke" kind of stuff

The little pizza place that could up against the corporate chain who's drivers have GPS

Another idea I have, though, is instead of the corporate place moving across the street, I have the owner of the original pizza place hire a separate driving firm and outsource his drives jobs to that firm, which has much better technology, etc...

Greg's reply:

There is a hard core pizza case I have seen, but it was about leadership problems; the son of donato's owner was in the class ahead of me. But I have a much more elegant solution and one that you will like better.. Sabermetrics of pizza delivery if you will.. you will be hard pressed not to be tempted to use my strategery with your company..but you certainly will with pizza drivers.. but don't confuse the readers.. lol

It is all about the bottlenecks in the system and the marketing uniqueness.

I might focus my marketing in the more profitable or easier areas

The easiest way to compete though is the bottlenecks. Constraint theory: the drivers are usually the botleneck: getting faster smarter drivers is one way to do it, but then you have to rely on them. You could easily compete at a slightly smaller profit margin by having an extra 2 to 3 drivers in peak times.. Eliminating thew advantage. Since they are effectively var costs and not fixed there is little risk. You augment one or two good ones with a less experienced 2 young ones. You give them all of the easy close ones that are off cycle.  Here I can figure it out for you real quick.. you'll love this.

This eliminates the build up. Buffer ahead of the pickups.. Here is the equation for pizza wait time (in the buffer) T= time from order to delivery = expected Cooking time + Tq(waiting time)+p(delivery time

Tq= (p/m)*((u^(sqrt(2*(m+1)-1))/(1-u))*((CVa^2+CVp^2)/2)

U= utilization rate = p/am
p= Average Process time of a pizza delivery
a= average arrival time of a pizza from the cooks (take # of pizzas done by cooks in 1 hour divide divide into 60, and that is a)
m= number of pizza drivers.

CV = Coefficient of Variability, it is simply the Std dev/mean
Of CVa is Coef. Of Var for arrival times:  you need to make a best guess about how much variability is in a (I would guess it is pretty high, which makes CVa pretty low)
CVp is the Co. of Var for delivery times, I would guess this is moderate: I think you know what a std. deviation is, if you don't I can explain. But it is vary important to the equation, it is why adding drivers is SOOO important to the business in rush times.

There you go..

Set T = 25-30 min.. and you win the game..  and you will be more profitable too. ..  the reason is you will have increased your throughput.. this increases your profit per hour and increases customer satisfaction. It has other effects too.. like decreasing inventory levels and allowing for better managerial control: meaning better resource allocation:

Basically, if your bosses paid you a consulting fee (and you should get them too in ownership shares or something :) ) I would do this spread sheet for you, and you would know the optimum driver numbers per night.. and more importantly per hour per night.

Also: I would hire people who could double. E.g. a back up cook or phone or manager that would act as a driver when the queue gets to be too long: U= too big..

There you go: Sabermetrics for pizza drivers..  see what 100K and a good GMAT score will get you!.

Gregory

By the way, ask any Harvard or Standford MBA this question and you'll get some lame ass leadership or innovation answer..

Pss you could add a sorter like you said.. but it wouldn't be as effective, because it is hard job and doesn't cover the variability problems, which is your true issue.

The iPod emails

A funny email exchange that took place one afternoon between myself, Chris Ferreira and Jason Parker. This happened on the day the iPod was first announced as a product.

It should be noted that Jason and I were both Mac people, while Ferreira was a PC guy.

My intial email:

http://www.apple.com/ipod/

Chris Ferreira's reply:

Christ almighty- Maybe if I win the lottery I could afford it. Or I could just buy the NOMAD which has more drive space, and has been out for a year + for less than half the price.-Barking up the wrong tree ya hippie! :)

My reply:

this also works as a 5 gb self-powered portable firewire drive that you can use with any files you like

plus it is less than half the size and weight of the Nomad

plus it automatically syncs with iTunes, thus keeping your portable totally matched to your desktop

yes, it costs more... but like Armani, the superior Apple products are worth it... but only if you demand the best

by the way... I bought Diablo II Battle Chest... let's go

Jason Parker adds his two cents:

Here here, Horvath! Amazing he ever owned an Apple to begin with. iPod is the clear winner for functionality, versatility and style.

I always choose the filet mignon over the cheeseburger, but not everyone has my taste. :-)

My response:

a camaro may have a bigger engine than a BMW, but i'll take the Ultimate Driving Machine thank you

Jason's response to that:

sure you can get a hoagie at 7-11, but I'll have the smoked turkey and Havarti on soft french with organic greens...

Me again:

i'm sure PC users would be perfectly satisfied having sex with a San Pablo street hooker (after all, they're used to settling for the cheap product) but as a Mac user, I'll take nothing less than a top o' the line Vegas call girl and her best-friend... hey, call me foolish, but I want the best, even if I have to pay for it

Jason again:

Speaking of "hookers," in the world of fishing, I'm sure a PC user wouldn't mind fastening string to a stick and pulling Crappies out o' the river, whereas as a Mac user, I wouldn't settle for anything less than deep sea fishing for Sockeye Salmon.

Call me crazy, but I'll go to great lengths for quality...

To which I respond:

once when i was staying at a fine hotel in London, i noticed that during rush-hour the autos on the street outside my window would create quite a cacophony of horns

i was quite bothered and, as a Mac user, demanded to be moved to another, more quiet hotel

and of course i was

however, i couldn't help but notice on my way out that the PC chap in the room next to me was sitting on his bed reading The Times and looking quite content

i do believe he was an American

poor fellow, doesn't know what he's missing

Jason then writes:

Funny you should mention the Times, my friend; it reminds me of the time I was in upstate New York, on a hunting expedition with an acquaintance from the south that I had met through a former business associate. He was a PC salesman and showed some interest in hunting, so I invited him along for the trip. I thought to myself, his choice in computers shouldn't effect his hunting Venison, should it?

Anyway, while stalking quietly through a crowded grove, my companion claimed he had seen "a big one." As is the rule in these situations, the one who spots the target claims the prize. I hung back as he slowly approached a clearing, just out of my view. After a few moments the report of his rifle echoed throughout the valley and he went to retrieve his bounty.

I stayed in my position until I could see him returning, dragging a seemingly small animal. I said, "my, that is a small one isn't it?" He brought it over and uncovered the animal and to my suprise, it was a Racoon!

"There'll be good eatin' for ma an' the chidren tonight!" he exclaimed.

In my horror, I slowly realized that his choice in computers certainly WAS an issue.

I then write:

It was about 10 years ago when I first uncovered my grandfathers travel diary in a dusty old Armoire up in the attic. Scanning the pages a found a chapter titled "The Final African Safari". My interest was peaked.

I read the story as my grandfather told it of his trips through the jungles of the Dark Continent. He was a doctor and he was searching for a rare plant that could perhaps provide a cure for the dreadful Smallpox disease, which was currently devastating Western Europe.

He was joined on his expedition by a fellow doctor named Jenkins and the two of them hired a crew of natives to lead them on their journey.

It was after a week of canoeing down the river when my grandfather awoke one morning to discover the crew slaughtered and he and Jenkins tied up in a crude bamboo cage. Surrounding them was a hoard of frenzied tribesmen pumping their spears in the air.

And beyond them he noticed a large black pot boiling over a open fire, just large enough to fit the bodies of two foreign doctors.

Before my grandfather could react the tribesmen pulled he and Jenkins out of the cage and carried them to the large black pot. The tribesmen hoisted them in order to throw them in when suddenly my grandfathers pocket watch fell out of his coat and onto the dirt in front of everyone.

The tribesmen reacted in awe to the shiny new object and one brave soul picked it up to examine it more closely. After seeing it was safe the Chief of the lot approached the poor fellow and snatched from his hands. He himself then gave it a closer look and smiled.

The Chief walked up to my grandfather and searched his pocket for more shiny objects but found nothing. He then grabbed my relative by the neck and started screaming in his face. It was obvious that the Chief wanted more and my grandfather realized this could be his only opportunity to somehow survive this ordeal.

In a crude but effective way, my father's father managed to communicate to the Chief of the Tribe that there were even better goods he could provide him if he were to receive, in return, the Chief's promise that he and Jenkins should be set free.

But without the promise, he would never reveal the location of the coveted objects.

The Chief then replied, again in a crude but effective manner, that he and Jenkins would be allowed to return to their camp and  each retrieve a gift to present to the Chief. If the gift was deemed worthy, then that particular doctor would be allowed to leave. If not, then they were to be dinner.

So, with a small regiment of guards the two doctors were led back to their camp and allowed to go into their tents to obtain the Chiefs presents. Inside the tent the two began frantically searching for
something worthy.

Suddenly my grandfather remembered the two Gold compasses that were given to he and Jenkins by the Chancellor of the University before they embarked on their voyage. One was encrusted with an Emerald and the other with a Ruby.

Though these were treasures the two doctors hoped to keep forever, my grandfather knew it was their best chance of survival. He pulled them out of their bag and showed them to Jenkins.

Jenkins was skeptical. These were barbarians, he said, surely anything modern or technological would be enough. Jenkins suggested instead they give them their pots and pans and keep the compasses for themselves.

My grandfather disagreed and so the two of them approached the Chief with their separate gifts. They laid them down on the ground in front of the Tribes leader and he looked at them. Before my Grandfather could gauge the Chief's reaction he was clubbed from behind and fell un-conscience.

When he awoke, he was very much alive and lying in a grassy field about a mile or so away from a little village. He entered the town and was greeted by the friendly people who offered him food and water.

After eating, he inquired if anyone had perhaps seen his fellow doctor. No one had.

For the next five months my grandfather searched and searched for Jenkins, but to no avail. He eventually returned home and broke the sad news to Jenkins wife and son. He told them that mhe was sorry that he could not tell them more, but he was unsure as to the fate of their husband and father.

He then returned to his normal life of a doctor and never spoke of the African adventure again.

...

Several years after I read this story, I was in the library at my College when I noticed a guy sitting next to me typing a report on his laptop. On the top of his page was the name "Jenkins."

I asked his if he was perhaps related to the famous doctor who died in Africa and it turned out that he was his grandson. I told him who I was and the two of us engaged in a wonderful conversation discussing the lives of our elders.

After an hour or so, I asked him if he ever found out how his grandfather had died. He replied that he didn't. He asked if I knew, and I told him that I had not a clue.

But upon walking away, after saying good-bye, I couldn't help but notice the Microsoft Windows logo lying there on the bottom of his computer screen. It was then that it became clear to me... that cheap bastard Jenkins got what he deserved.

I'm still waiting for Jason's response.