Tag: checkout

Counter staffing and service levels

I’m writing this from the international section of the Bangalore International Airport, as I wait to board my flight to Barcelona. It was a plan I’d made in October 2014 to “hibernate” for a few months in Barcelona during my wife’s last term of classes there, and this is the execution of the same plan.

There was a fairly long line at the passport control counters this morning, and it took me perhaps twenty minutes to cross it. When I joined the line, there were about 10 passport officers to say goodbye to Indian passport, so the line moved fairly quickly.

Presently, officers started getting up one by one, and going to one side to drink tea. I initially thought it was a tea break, but the officers drinking tea soon disappeared, leaving just four counters in operation, implying that the line moved much slowly thereafter. Some people were pissed off, but I soon got out.

It is not an uncommon occurrence to suddenly see a section of “servers” being closed. For example, you might go to the supermarket on a weekday afternoon to expect quick checkouts, but you might notice that only a fraction of the checkout counters are operational, leading to lines as long as on a weekend evening.

From the system of servers’ point of view, this is quite rational. While some customers might expect some kind of a moral obligation from the system of servers to keep all servers operational, the system of servers has no obligation to do so. All they have an obligation towards is in maintaining a certain service level.

So coming back to passport control at the Bangalore airport, maybe they have a service level of “an average of 30 minutes of waiting time for passengers”, and knowing that the number of international flights in late morning is lower than early morning, they know that the new demand can be met with a smaller number of servers.

The problem here is with the way that this gets implemented, which might piss off people – when half the servers summarily disappear, and waiting period suddenly goes up, people are bound to get pissed off. A superior strategy would be to do it in phases – giving a reasonable gap between each server going off. That smoothens the supply and waiting time, and people are far less likely to notice.

As the old Mirinda Lime advertisement went (#youremember), zor ka jhatka dheere se lage.

FDI in retail

I’m trying to figure why that is turning out to be a big deal. Given that we have over 5 years of history of “organized retail” in India, and that it hasn’t performed particularly well on a lot of factors, I don’t know how permitting FDI in multi-brand retail is going to make a difference.

In my personal experience, the performance of “modern retail” over the last 5 years has been underwhelming at best. I can’t recall a single time when I’ve gone to one of these chain stores (Big Bazaar/ Reliance Fresh / More) and come back without getting annoyed with the checkout staff. While the variety available at these stores is massive, which is why I go there at times, the stores are all staffed with a bunch of imbeciles. Yes, all of them. They have made an attempt to overcome the unskilled staff by means of “software systems” and that has only added to the problem, rather than helping solve it.

On countless occasions, staff at modern retail outlets have refused to sell me something that I wanted to buy because “the item code wasn’t found in the system”. The other day the customer in front of me wanted to cancel an item midway through checkout, and the checkout staff had to call the store manager to reverse the transaction. I don’t know why the systems have been designed so badly. The fundamental problem with most of these “modern retail” outlets is that the staff there have no real incentive to actually sell you stuff, and the impression one gets is that the only thing staff strive to do is to avoid mistakes. Perhaps their incentives are structured thus. I know of a case from some 4-5 years back, when a family-owned opened across the road from a More outlet and in the course of a year, the latter had shut down.

Given this lacklustre performance of modern retail, I don’t know how much of a difference permitting FDI in the sector will achieve. Yes, it is argued that if Walmart invests directly the “know-how” it has accumulated over the years will be introduced to India. However, there is no reason to believe that this “know-how” has not already been implemented. Major players in organized retail such as Reliance and the Aditya Birla Group (More) have demonstrated in other sectors of their willingness to acquire know-how from across the globe, and implement it better than their global counterparts. Then, most major management consultants in India have established retail practices, which is another route for “knowledge import”. It is also not an issue of capital – Indian investors in various sectors have time and again shown that they are willing to invest in companies with strong business practices.

The problem with modern retail lies not with either know-how or investment. The problem is one of implementation, and I don’t see how bringing in Walmart (who have little idea of Indian markets) can make a difference there. FDI in retail is not going to solve this problem.

The real problem lies in bottlenecks higher up the food supply chain. Various states are yet to repeal the archaic APMC Act which gives certain people monopoly over food trade in certain areas. There are various restrictions on movement of goods across states (though this should be lesser of a problem once the GST (Goods and Service Tax) Regime comes into play). Time and again, the government acts arbitrarily in changing the rules concerning movement, import, export and “support price” of commodities, and this creates uncertainty in the market and scares away investors.

It is reforms higher up the supply chain that are crucial in order to make the food supply chain more efficient and reduce wastage. The government would do well to put the topic of retail FDI on the backburner (especially since it’s controversial) and instead focus on enabling the rest of the supply chain to become more efficient.