Big Brother & other forms of control

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You've got to know what is going on in your organization. Both in terms of measuring key performance indicators, and controlling assets such as cash and inventory.

Sheldon Cleaners has 30 retail locations, each staffed by minimum wage workers. Theft is an occasional, yet recurring problem. Both money and clothes are targets. An exact over or short deposit amount can get confusing when corrections to other mistakes are included in the daily deposit process. The key was to separate the procedural changes from the actual overages and shortages. The procedural changes tended to have/be a correcting entry for a matching entry and net to zero in a day or two. Now when you look at this information over time, both columns should net to zero, and it is easy to spot discrepancies.

The clothing dropped off for cleaning is also a target for theft. To detect clothing theft, and provide a visible office presence, a inventory control person visits each location and scans the bar code on each order, using a hand held scanner. That information is fed into the point of sale system and a detailed report of missing orders is printed. In addition to an accurate inventory, additional procedural monitoring helps maintain a tight ship.

Even with a good solution, it still takes people to make it work correctly. Keep on top of it and you know exactly where you stand at any given moment. Quit paying attention and you will soon have chaos. Sheldon Cleaners has found that it easier to stay on top of things, knowing exactly where you stand at a given moment, than be sloppy, and constantly trying to figure things out. Creating normalcy from chaos is a lengthy and time consuming process.

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Other forms of control include productivity and performance measurement. In the main plant, garment pressing counts by employee and garment type measure productivity and provide a detailed cost analysis that will support the ultimate goal of piece work. Just by refocusing attention on performance, numbers have improved.

Each garment is scanned as it passes through the inspection area. In addition to the counts at the end of the day, the software can see the large gaps of time that represent breaks, allowing for more accurate performance data. And everybody knows how long everybody else is going on break, a great deterrent.

Rather than an ad hoc reporting system, Sheldon Cleaners has a well defined reporting structure. The column labeled 'Sales' on the 'Labor Report' has a supporting report that takes several columns of more detailed information to explain exactly what 'Sales' is. Each report is a piece of an overall reporting structure, supported by, or supporting, some other part of the structure. When all of the pieces are put together, you have an accurate representation of Sheldon Cleaners.

hardware, software and people

The hardware part of the equation is getting easier and cheaper every year. Virtualization further leverages the hardware investment and provides a new level of flexibility. And a high-speed Internet connection allows you to eliminate some of the hardware all together and run your application software, as a service, hosted on a web server somewhere.

The hardware change at each Sheldon store location was dramatic. Large bulky monitors were replaced with flat panel displays. Slow, noisy dot matrix receipt printers were replaced by fast, quiet thermal printers. Large tower computers were replaced with Apple Mac Minis. Everything was simplified. The new setup was so easy, the owners were part of the initial deployment team. 

We did the majority of the cut over one Sunday in December of 2005. Multiple teams were sent out with 2-3 stores worth of computers, their mission was to rip out old equipment and install new, then come back for more. The weak link in the chain was getting data off the old server. Everything after that was practically instantaneous. The new hardware is incredible. 

As the teams returned from their first batch of installs, the proud look on their faces reminded me of the Iraqi voters proudly waving their dyed finger, having just voted for the first time in a long time. 

The biggest problem with software is that there are too many choices, and most packages have too many features. So it's a matter of sifting through a big pile, looking for the pieces that are meaningful to you. Software that affects multiple areas of an organization should not be selected without some formalized definition of requirements.

The choice for Sheldon Cleaners was custom software, designed to fit like a glove. The perfect match of business process and information technology. The biggest headaches became manageable tasks that required minimal supervision.
Employee theft is identified quickly
A clean track record makes abnormalities stick out like a sore thumb.
Bank Reconciliation is in auto pilot
Using electronic bank records, checks, deposits and credit cards reconcile automatically.
Accounting records are electronic
Money is saved every month because of the elimination of manual effort. Questions are reduced. I's are dotted, T's are crossed.

All of the systems were written in 4th Dimension (4D), a rapid application development environment. The database is tightly integrated with rich forms and reporting tools, expediting development. The Internet Communication tools made store to office communications easy.

The people part of the equation is undervalued and often neglected amongst flashy demos and impressive looking screens and reports. But ultimately, it's the people that make or break a project. Put great information in the hands of motivated people, and you've got a home run. Yet one person, at a key point, can be hazardous to your health.

Sheldon Cleaners has taken ownership of their information systems. They have taken a good solution and made it a great solution. They are in full control of their intranet, the most important communication tool since the copier. They watch the store's deposit every day, and inventory each store at least once a week. They have made tough decisions in order to bring labor costs down.

The people of Sheldon Cleaners have used the information from these systems to improve the bottom line. Plant productivity is up, labor as a percentage of sales is down. Theft is identified in days, rather than weeks or months. Lost garment claims are down, way down. And everybody is happier.

it's the network, stupid

A transformation is going to occur (if it hasn't already) that will significantly change the way your organization operates. You will be moving to the Internet. The Employee Handbook, work/vacation schedules, phone extension lists, project schedules, you name it. All of it on your intranet. Hyper links will logically organize all of your documents together in a structure defined and maintained by all members of the organization, not just a talented few. And this will be available to any geographic location, available to both you and your strategic partners, assuming proper security clearance, and a decent connection.

The intranet site at Sheldon Cleaners is maintained by office personal with no prior training and little prior experience. With the basic tools available as free ware and shareware on the Internet, they are in full control of their web site and doing a great job. The site is heavily used by store clerks and actively maintained by multiple office workers. It is a better informed workforce, and the office is far more productive. Gone are outdated and missing documents at the store. Now the most current copy, the only copy, is on the intranet, just a few of clicks away.

A valuable feature of the Sheldon Cleaners intranet is helping to return lost garments to the proper owner. Each garment is tagged upon receipt at a store, identifying it to the system. All clothes are cleaned at the main plant and returned to the proper store. If a garment loses its tag in the plant, the garment is lost. Enter the intranet.

The first thing to do is get a digital picture and load it on the computer. Then the image needs to be 'right sized' for the intranet and a thumbnail made, a tricky task the first time, but ingrained knowledge by now. Then the item gets added to the 'Lost Garments' web page for all to see. Store clerks can match the picture to their incomplete orders, and if they need help, they can even show the picture to the customer.

My contribution to the intranet was the technology to make it all work over the existing telephone line at each store, which is also shared with the credit card machine and voice calls. Telecommunication choices available to all 30 locations was limited. The trick was to maintain a copy of the web site at each store, syncing with the main site when instructed to do so by the office. Updates take just a few seconds because only recent changes are transmitted. Files are deleted, as well as added and changed. After that, each store accesses the intranet from their local disk, no phone connection necessary. Performance is better than high speed cable.


Any good system will expedite the recording of business transactions and provide meaningful reports. A really good system will transform information into ways that were not possible, or practical, and will provide the most accurate view possible.

Automated Data Processing (ADP) provides payroll services for Sheldon Cleaners. Payroll and employee information is captured with each payroll and transformed into the Human Resources system, albeit a limited one. The only data entry at the office is setting up and maintaining employee information in ADP. All time records are electronic. Employee and department/store payroll, detail and totals are captured, as well as other employee information. Payroll and store sales are transformed into the 'Labor Report'.

The Sheldon Cleaners 'Labor Report' goes back the late 1980's. Started originally to help schedule counter clerks, the then 'Counter Labor Report', compared payroll with sales, to determine a labor percentage. How many people you can afford to put in a store depends on sales volume. In recent years, the plant has been included as well, using separate totals for shirt laundry and dry cleaning. Fine tuned over time, the current version is a very accurate measure of performance, giving managers the ability to schedule people effectively. The people have learned how to interpret the results and make better decisions. In both store and plant operations, labor as a percentage of sales was significantly reduced when the people paid attention to this report.

The boring task of bank reconciliation was a key transformation for Sheldon Cleaners. Reconciling credit card deposits was a sloppy process and identifying problems was difficult. Many times it was the customer who identified the problem; not good for business. I developed a Checkbook application that reconciles store sales and accounts payable information automatically with electronic bank records.

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Checks and daily store deposits reconcile easily, matching check numbers and deposit amounts. Credit card deposits reconcile in bunches, as the bank recording of credit card deposits is much different than ours. Groups of numbers are totaled until both sides match. There is a manual reconciliation function that turns out to be a brain teaser game of matching different number combinations. The automatic reconciliation takes care of the majority of the volume of the transactions. What's left is the small list of things that really do need attention.

An outside accounting firm provides financial services for Sheldon Cleaners. All of the data above, coded with the proper account and other financial information, is formatted to the specifications of their software, and electronically captured by their system. Manual effort is virtually eliminated. There are fewer questions. Money is saved each and every month.

A critical transformation is the ability to rebuild a store computer as quickly as possible. A disk, with a pre-configuration operating system, is cloned to a new computer. Once connected to the office network, the point of sale server delivers current store data. Now you're a store. The hardware allows this to happen quickly, and the software assures data integrity. All at a time when you need it most.

This next transformation can only truly be appreciated by me and Roger Roelofs, the original developer of the point of sale system. The good parts of the existing system were salvaged, and the bad parts were thrown away. Perhaps the best part was the pricing engine, basically a mini language Roger had written to deal with the pricing structure of a dry cleaners. My time was spent on the user interface. It's now much easier for new clerks to learn because of the visual clues and ease of operation. Price list maintenance has a very advanced interface that makes changes and updates easy. The price list is as complex as it is important. The barrier to entry has been dramatically reduced because of a better interface. I could afford to spend time here because of the solid engine underneath me. Thanks to Roger.

Allow me to digress for a moment. The point of sale system is now at version 3. Version 3's have always meant something to me. Microsoft didn't get Windows right until version 3. Alright, 3.11. In version 1 of this system, the pricing routine only ran at the end of the order, due to speed considerations. In version 2, it ran after each line was updated, but was slow, and had issues. By version 3, the pricing routine is more complicated, but quick. It runs all the time, without thought. The hardware finally caught up to the business problem. The quality of version 3 was significantly enhanced by the efforts of Bill Heydenburg, now Office Manager, who diligently chased down bug, after bug, after bug. And I fixed them all. I have never developed software of this quality before. And Bill is an expert in all aspects of the system.

The ultimate transformation is in the people. They have embraced these new tools and achieved things not previously attainable. They instinctively think differently about things. Yesterday's problems don't exist because people are acting, not reacting. A few people, like Bill, have transformed themselves into new positions of responsibility. A reward for the additional contribution they are making to the company. And everybody is happier.