ENHANCING EFFICIENCY AND RELIABILITY
“PIGGLY WIGGLY.” For a supermarket the name was unusual. In 1916, its founder, Clarence Saunders, christened the first store in Memphis, Tennessee. People walked past a wooden turnstile, picked up baskets, collected groceries, and then paid for the goods at the cash register and left. This was radical. There were no white-aproned grocery clerks, and the store had far fewer employees than what was usual at that time. His store “cut out all the frills of merchandising,” Saunders crowed, and “every forty-eight seconds a customer leaves Piggly Wiggly with her purchase.”
Saunders was a portly man who had worked for a grocer as a teenager, making four bucks a week. “He liked to preach,” a journalist observed. “The evangelical strain was strong in him as in most rural Americans brought up on protracted meetings, revivals.” An autodidact, he became an engineer by practice, not formal training. Frustrated with the inefficiencies of traditional grocery stores, Saunders studied his own store’s operations from different angles to better understand its labor demands at various times of day. The shop might appear crowded from the front entrance, but looking down from the store’s gallery gave him a precise idea about bottlenecks in the process. In observing the store from this vantage point, he plausibly carried out a version of what engineers would call time and motion studies, which include techniques to improve the efficiency of an operation. The goal is to convert every motion of the worker—and the time associated with that motion—into useful work or revenue. The solutions were in front of Saunders. All he had to do was shift his perspective.
Saunders designed his stores to channel the customers in predetermined ways. All Piggly Wiggly stores had the same color scheme and typeface, and were kept punctiliously clean. Inside the store, he created a new way of organizing products. Consistent with modular systems thinking, Saunders divided his store into three distinct areas: lobby, salesroom, and stockroom.
The salesroom was the store’s linchpin. It was subdivided into aisles that featured different products; for example, perishable produce was separated from packaged foods and bathroom supplies. Saunders helped set up the fixtures and lighting system for each aisle. “Every item is plainly marked,” read one of Saunders’s advertisements. “No clerks to argue with you, trying to persuade you into buying what you don’t want to buy. You can wait on yourself in a hurry, or you can be as slow as you desire to be . . . nobody will ask you why you didn’t buy anything.”
This arrangement significantly improved the store’s efficiency: sales increased up to fourfold, declares a patent issued to Saunders. The store boasted of an overall stock with four times the variety of ordinary stores, and the prices were very competitive. “In his hand, Piggly Wiggly was never simply a store but a ‘person’ who was ‘going to be raised on a scientific basis, with a scientific diet for each meal,’ ” according to Mike Freeman, a biographer of Saunders. By 1923, the Piggly Wiggly chain had expanded to more than twelve hundred stores. Customers were empowered to shop for themselves, but importantly, they had an incentive to do so because lower store overhead meant lower product prices. The age of self-service was born.
Piggly Wiggly was a simple but extraordinary retail concept. By the late 1930s, mechanization and automatic-checkout counters had reinforced the growing practice of self-service. Efficiency was the goal. Grocery revenues climbed and distribution costs tumbled. With later developments in point-of-sale systems, bar codes, massive standardized layouts, and gargantuan parking lots, supermarkets came to be known as “category killers.” The nature of competition—and collaboration—among customers, stores, and product developers changed forever.
IKEA offers a modern-day take on Saunders’s basic concept. The company’s philosophy of minimalism, expressed in its modular products, treats all customers like production engineers, letting them assemble their own furniture. “IKEA is Legos for grownups, connecting the furniture of our adulthoods with the toys of our childhood,” writes Lauren Collins of the New Yorker. The IKEA catalogue “combines the voyeuristic pleasures of browsing albums on Facebook (peeping into other people’s houses) with the aspirational ones of Architectural Digest (we are all a $39.99 bookshelf away from being well-read Swedish architects). The IKEA catalogue is a self-help manual for a certain kind of life.”
In its subliminal form, self-service connects with our consciousness—an invisible GPS that’s navigating and modulating our desires amid neatly lined-up products screaming for attention. This effect, which Piggly Wiggly and IKEA achieved, can be understood from an engineer’s angle as a basic output of efficiency. Sam Walton, the founder of Wal-Mart, fully credited the concept of self-service as a powerful reason for his company’s success. As we’ll discuss in a bit, there was an unlikely beneficiary of this powerful concept.
It was a car company.
JOHN SHEPHERD-BARRON was an old-fashioned Scotsman with a questioning mind. One afternoon in the mid-1960s—as the story goes—Shepherd-Barron was a few minutes late to the bank as it was closing for the weekend. He urgently needed cash. The manager refused to reopen the branch, despite his pleas.
A dyed-in-the-wool engineer, Shepherd-Barron thought he should have the freedom to withdraw cash anywhere and anytime from his bank account. He was the managing director of a currency instruments firm. He worked first on the printing side of the business, and then on the armored transportation side. His next step was to find a way to dispense money automatically. By inventing the automated teller machine (ATM), he completed the circle. How did he do it? “I hit upon the idea of a chocolate bar dispenser, but replacing chocolate with cash,” said Shepherd-Barron.
IF NECESSITY IS the mother of invention, then who’s the father? The idea of an ATM may seem to have arrived out of thin air, but perhaps not. Some cognitive psychologists use the grandiose term opportunistic assimilation to explain the nature of breakthrough insights. Having your mind prepared to exploit an opportunity is an important precursor to spotting one. This intellectual alchemy contains a subconscious association of life lessons and experiences.
For engineers like Shepherd-Barron, what truly comes in handy is the powerful notion of backward design—the ability to preimagine the desired outcome and work in reverse to achieve that goal. An epiphany, then, actually results from conscious, methodical planning that supports a confluence of ideas, experiences, and opportunities. Lehigh University’s Tom Peters has used the term matrix thinking—comparable to the moving around of ideas across the rows, columns, and diagonals of a conceptual matrix—to define an orderly process of spotting, incubating, and combining ideas from various walks of life, and then converting them into practical solutions.
Thomas Edison was incomparable in the ways he capitalized on matrix thinking. The concept, although unknown to him by that name, strongly influenced his attitude toward new opportunities. Technology historian Bernard Carlson has examined Edison’s processes as an inventor and notes that his sketches were a “nightmare to study.” For example, while developing his version of the telephone, Edison didn’t annotate any of his diagrams.
To make meaning out of the mess, Carlson took an approach similar to that of a paleontologist, treating each of Edison’s sketches as a fossil. He swept through Edison’s portfolio of patents and products, looking for connections and similarities—from superficial mechanical appearances to deeper operational inspirations—hoping to arrive at a “common mental model” to describe Edison’s thinking. It was clear to Carlson that Edison was not pursuing a single product, but approaching five lines of inquiry simultaneously. One example is how Edison tried to stimulate current flow by using sound waves to activate an electrical conductor in a magnetic field. Throughout his work, Edison demonstrated adeptness in interchanging ideas and tools, just like the cooperation between the evolutionary processes of variation and selection—a concept that resembles Gribeauval’s parameter variation. “These transfers were often like the grafts that plant breeders make, and for Edison they often resulted in improved performance in the telephone under study at any particular moment,” Carlson observes.
A key difference in this analogy is that evolution is not goal oriented, whereas engineering is. In that regard, Edison’s creations were more of an artificial selection than a natural selection. He exploited the most promising avenues for product development by being “not simply a breeder in the old-fashioned sense but actually more of a genetic engineer,” Carlson adds. “Unlike the traditional breeder who must work with the basic biochemical make-up of the plant or animal species, Edison was able to change substantially the make-up of a particular telephone.” Over time, Edison created new hybrid technologies, with each version of the telephone performing better than its predecessor. At an even higher level, Edison was branching out like a tree, at times, as demonstrated by dozens of concept sketches with clearly defined goals. “Edison was not simply investigating one kind of telephone,” Carlson concludes, “but rather a network of possibilities.”
Applying this sort of logic to the development of the ATM, we could say that goal-oriented thinking helped shape a highly focused function: a reliable way of dispensing cash. In imagining and parsing the system and modules of the ATM, from security to data storage, Shepherd-Barron could have worked entirely backward to form a framework for what we now call telematics—a system of systems that unites computing, telecommunication, and transportation technologies.
The first ATM was unveiled in 1967 by Barclays in North London. The four-digit PIN number—a global standard of brevity based on how much information people can effectively remember—was an idea from Shepherd-Barron’s wife. Before debit cards came into existence, ATMs processed only checks with carbon-14 radioactive encryption. Public trust in ATMs grew immensely after their reliability was demonstrated time and again around the world.
Another feature of the ATM is that it was not as much a design-based invention as it was a function-based invention. If Shepherd-Barron’s interest lay purely in the design, his possibilities would have been limitless. The ATM could have taken any shape or form or color. Under the constraints of his final objective—a chocolate bar dispenser that instead dispensed cash—a design-based approach would have been inefficient. A function-based approach would have made it easy to track progress toward the eventual goal. Testing and retesting of ATM functions anchored the core performance needs of reliability, privacy, and security.
Psychologist Gary Bradshaw has written about the importance of function-based design in the development of airplanes. Wilbur and Orville Wright took about four years to implement their first prototype of a flying machine. While their competitors focused on the design of wings, fuselage, and propulsion, the Wright brothers were devoted to getting the fundamental functions of lift, thrust, drag, and yaw correct. Consistent with the notion of modular thinking, they solved each puzzle at a subsystems level before they moved to the next layer of the assembly, and along the way they invented new instruments and measurement techniques.
Consider the following example among the many conceptual obstacles the Wright brothers faced. Most of their contemporaries thought that flight systems operated in a two-dimensional way, “as though an airplane were going to be a cart running on a road or a ship running on the sea,” explains Tom Crouch, a senior curator at the Smithsonian National Air and Space Museum and author of The Bishop’s Boys, a magisterial biography of the Wright brothers. Other developers thought “about the notion of an inherently stable flying machine—a flying machine that would, if it were struck by a gust, return itself to a stable position automatically.” The Wright brothers saw it as a completely different challenge. “From the beginning,” Crouch adds, “their goal was to devise a control system that would give them absolute command over the motion of a machine in every axis all the time.” Control superseded stability. “That’s not so surprising—they were cyclists, after all.”
The Wright brothers were also befuddled by another challenge. Their propeller performed well in practice, but not in theory, forcing them to discover a concept base. Their biggest breakthrough came, as Crouch points out, “when they stopped to think about the problem and said that essentially a propeller isn’t an air screw at all; it’s not like a screw going into wood. It’s much more like a wing; it’s developing lift. Rather than moving forward through the air, it’s rotating, and the lift becomes the thrust that moves the airplane forward.” This was the Wright brothers’ version of structured visual thinking: imagining the propeller as a rotary wing. “One literally has to ‘see’ the propeller as a wing moving in a spiral course to make this intellectual leap,” Crouch notes. Hurdles aside, the Wright brothers’ ultimate goal was reliable, flyable functionality.
The functional orientations of Shepherd-Barron and the Wright brothers (or Edison) have one thing in common. It’s what the Santa Fe Institute scholar Brian Arthur calls deep craft—the ability to know intimately the various functionalities and how to effectively combine them. “It consists in [knowing] what is likely not to work, what methods to use, whom to talk to, what theories to look to, and above all of how to manipulate phenomena that may be freshly discovered and poorly understood,” Arthur writes. Systems-engineering approaches that underlie the efficiency and reliability of low-failure-tolerance products like ATMs and airplanes have a strong connection to deep craft.
In contrast to Edison’s propensity for documenting and protecting his ideas, Shepherd-Barron’s greatest legacy was possibly that he didn’t patent his invention. He didn’t want to reveal information about the security-coding system protecting the bank accounts that might enable criminals to crack the code. He chose to keep it a trade secret so that the technology could grow unencumbered by patents. “The power of the ATM is in its simplicity that capitalizes on the much older social technology of cash itself that’s been around for 27 centuries,” says Michael Lee, CEO of the ATM Industry Association. “That’s why roughly every eight minutes, there’s a new ATM being installed somewhere in the world.” Paul Volcker, former chairman of the U.S. Federal Reserve, said it best: the ATM is the single most important innovation in the financial industry.
IN 1956, a small group of Toyota executives visited the United States to tour the operations of the Ford Motor Company. The delegation included Taiichi Ohno, a mechanical engineer. Ohno was on a “go and see” mission in the midst of a Japanese recession after the Second World War, a conflict that had crippled his country’s manufacturing sector.
Ohno was amazed by the colossus of Ford’s revolutionary assembly line manufacturing process but still found it inefficient. Why? Ford had excess inventory. And because the company produced more than consumer demand dictated, it had to heavily market its products to move them out. General Motors was in the same situation; its approach was also out of sync with customer needs.
Informed by his experiences in the hand-loom business in Japan, Ohno’s instincts ran contrary to Ford’s. Why overproduce, stock, and wait for customers’ orders? Ohno reported back to Eiji Toyoda, then a top executive who would eventually go on to become Toyota’s CEO. Eiji was a tough person, devoted to the doctrines of efficiency. With focus, one can squeeze water from a dry towel, he’s known to have said. This sentiment harked back to Sakichi Toyoda, the founder of the Toyota group of businesses.
Sakichi was a self-reliant man. He read and reread Self-Help, an 1859 book by Scottish reformer Samuel Smiles. As a loom machinist, Sakichi had rigged a weaving machine that would stop if a thread broke. This improvement opened up the possibility for automation. One person could oversee a large number of looms. Sakichi’s business prospered.
In the early 1920s, Japan was struggling to expand its economy. A cruel 7.9-magnitude earthquake had devastated the country’s Kantō Plain. Tens of thousands of people had died. The railroad system was shredded and the rest of the transportation infrastructure was equally damaged. In the face of destruction, the Japanese people embraced self-help and optimism. This mantra inspired their businesses.
Sakichi’s son Kiichiro Toyoda took reign of the family business in the 1930s. Kiichiro applied his experiences from hand looms to start a small car company. From this modest beginning, how did Toyota ascend to become a top leader in auto products?
One critical moment over the years was Ohno’s visit to Piggly Wiggly when he was in the United States to visit Ford.
SELF-SERVICE WAS just in time. Self-help meant efficiency. At Piggly Wiggly it was a common streamlining practice to restock only after customers had purchased the products. Beyond the realm of engineering, this folk approach seems to have helped the legendary nineteenth-century French chef Georges Auguste Escoffier, who—as culinary journalist Bee Wilson highlights—“organized the kitchen into separate sections for sauces, meats, pastries.” As a result, Escoffier helped dramatically transform restaurant cooking, and also create “a certain philosophy about what food should be.”
The tried-and-true, just-in-time logic of Piggly Wiggly inspired Toyota to minimize the overstocking of parts and tools on the production floor. The official Toyota Production System led to prolific triumphs. Subsequent goals of this approach, such as low-defect manufacturing, ruthlessly focused on continuous improvements to production efficiency. This was called concurrent engineering.
“In systems thinking it is an axiom that every influence is both cause and effect,” as engineering and management consultant Peter Senge puts it in The Fifth Discipline. “Nothing is ever influenced in just one direction.” A prerequisite for enhancing efficiency is to recognize the exposed and hidden paths in a process, and their patterns and relationships within a system. Using the metaphor of seawater level, researchers Yuji Yamamoto and Monica Bellgran from Sweden note that in the Toyota model, “when the water level is high, the objects are hidden under the water. By reducing the water level, the objects are brought up to the surface.” Concurrent engineering helped expose manufacturing defects, and every challenge had to be addressed with a “sense of urgency.”
In recent years, Toyota’s approach to waste reduction has captivated the airline industry. Commercial airlines have adapted their own versions of a “systems approach” to make across-the-board cuts in aircraft weight and fuel consumption. The results include creating cheap, lightweight alternatives, even reducing the size of cutlery to save a few grams on each spoon, knife, and fork.
A trick to improving efficiency, Ohno writes in his book Toyota Production System, begins by asking a simple question: Why? Repeating that question five times takes you close to the root cause of any particular problem in a process. Here’s a sequence of questions, for example, in Ohno’s words:
1. Why did the machine stop?
There was an overload and the fuse blew.
2. Why was there an overload?
The bearing was not sufficiently lubricated.
3. Why was it not lubricated sufficiently?
The lubrication pump was not pumping sufficiently.
4. Why was it not pumping sufficiently?
The shaft of the pump was worn and rattling.
5. Why was the shaft worn out?
There was no strainer attached and metal scrap got in.
Senge might see this reasoning process as an effort in understanding “circles of causality” linking to the notion of multiple influences on a system. In a broader sense, thanks to Toyota, concurrent engineering served as a core transmitter of an idea that grew from a production protocol into a useful management philosophy. Concurrent engineering invigorated various manufacturing sectors, enabled new service protocols, started a work-flow revolution, and opened new pathways for the spread of technologies.
ATMS OFFER US a three-way extension: an extension in time by keeping banking open beyond branch hours, an extension in space by taking banking beyond branch locations, and an extension in convenience, enabling cardholders to withdraw cash anytime and anywhere in the world, which was Shepherd-Barron’s original vision.
The operating principles of ATMs—let alone automobiles—are based on reliability. ATM failure rates have significantly declined over the past several years, thanks to concurrent error detection algorithms in the software that processes transactions, and to redundancies in the ATM network. The security features of ATMs have improved enormously. Our transactions are secure and ultrafast, even if an ATM has to query a group of connected systems that may not be anywhere near the machine we’re using.
Now imagine how a huge financial corporation must be dealing with risks that surround it. “We are gigantic systems operators,” says Chad Holliday, chairman of Bank of America and former CEO of DuPont. Information security is extraordinarily crucial for dealing with any form of cyber threat. These solutions need to be stable and flexible, requiring the highest level of security and several layers of backup. “If these systems were ever to be compromised—say, all the money in people’s accounts was wiped, you can imagine the panic. So everything has to be done right,” Holliday adds. Whether it’s a theme park ride or a bank account, the general principles of safety are the same. As a design requirement, engineers always need to take extra precautions, include failsafe options, factor in backups, and establish redundancies. Indeed, as one joke goes, that’s probably why engineers wear both belts and suspenders.
A technical disaster could include a number of malfunctions, but good engineers focus on finding and fixing the root cause. Each failure has a destiny of its own and provides a lesson for future generations. The sinking of the RMS Titanic was a grave human tragedy with its root cause in flawed bulkheads that succumbed to the onslaught of the Atlantic Ocean during the ship’s maiden voyage in 1912. Further, in the name of silly cosmetics (namely, not wanting to clutter the view from the deck), blended with the arrogant and destructive attitude that the Titanic was “unsinkable,” the number of lifeboats on board was woefully inadequate. The result was a colossal systems failure.
These were deliberate, if not fatal, design choices—what engineers would call aggressive trade-offs—where several other factors overrode safety as a top priority. In contrast, the opposite concept—conservative trade-offs—helped tremendously improve the safety features of successive naval systems, and even larger cruise and container ships. Failure is inevitable, but keeping a system as safe as possible is, at best, what any machine or human can do.
For a sports car enthusiast, safety may be expressly traded off a bit with an eye toward performance gains in horsepower. This doesn’t mean that aggressive trade-offs are a negative design strategy and conservative trade-offs are the most prudent ones. Several hybrid engineering principles—between aggressive and conservative trade-offs—feed into automobiles designed to meet various customer preferences. Their overarching goal is ideally the same: avoid failure in the best possible way.
In the business of manufacturing spacecraft, for example, “you don’t get recalls like in Detroit,” says Norman Augustine, retired CEO of Lockheed Martin. “If there’s a problem, you can recall six million cars, which is terrible, but in our business, if the damn thing blows up, you don’t recall anybody.” He was talking about how the aerospace industry lives and breathes the concept of reliability. “There’s a certain amount of hand waving with most things in business that you can get away with. With Mother Nature, you can’t do that. If you get it wrong, you’ll pay for it and you’ll pay for it every time,” Augustine said matter-of-factly. “As an engineer you’ll be judged honestly.”
There’s a relentless pressure on engineers to get everything right when human lives are at risk. Whether driving on a bridge or relying on a medical device, the last thing we want is a moment of unreliability. “When I used to live in Texas, they had chili contests,” Augustine said. “The judges would like your chili and not someone else’s. I mean . . . for goodness’ sake!” he grumbled. “In the aerospace business, maybe everyone in this world likes your rocket but if Mother Nature doesn’t, it’s all over. You are doomed.”
Ensuring reliability is a tricky business, since uncertainties permeate our lives. All an engineer can do is consider all sources of uncertainties and try to minimize them while keeping an eye on last-minute lessons. “You eventually have to push the button to launch your rocket,” Augustine says. “You can’t wait until every uncertainty is resolved.” It’s like going to the moon for the first time; you don’t want to land on a boulder, but in the 1960s there was no technical solution for knowing where the rocks were. Reliability of a solution is as critical as the solution itself, and along with efficiency, it’s a critical ingredient in the social trust of engineering.
MOST ENGINEERING products are in the form of High Tech and High Touch—as physicist Michio Kaku has described—complementing human desires and needs. With the ATM, Shepherd-Barron effectively engineered aspects of both High Tech and High Touch in one product. High Tech is the incredible global network of ATM systems—or the seamless banking infrastructure that Chad Holliday was alluding to—that enables us to carry out our financial transactions on virtually any ATM. High Touch relates to the satisfaction of withdrawing cash and putting it in your pocket. Insert your card, enter your PIN, take your cash, and walk away. You’re done in a matter of seconds. Now that’s efficiency and reliability.