Tuesday, April 23, 2013

Oysters are easier than rabbits

Recently scientists discovered that cooking pots dated some 15.000 year BCE, i.e. from the last Ice Age,  were used to cook fish.
Humans originated from Africa and spread all over the world, in various waves of interbreeding about which the scientists can endless debate. And my family spent many summers with the kids on the French Normandy coast. The connection is that it is easier to catch an oyster than it is to catch a rabbit.
While walking over the beaches and rocky stretches of the European coast line, it is possible to gather a lot of food with little effort, even for toddlers. Oysters, mussels, cockles, crab, fish, snails: they all live there in abundance and only need to be picked up. This is such an easy way of finding high value protein, that I dare say that our ancestors must have spread following the coastlines. People at that time did not have wasabi, lemons or soya sauce, but good fresh shell fish is tasty also without condiments.  The clay pot confirms the hypothesis: in the period when the world was being populated, people foraged the beaches and ate what they found.
I estimate, without any scientific proof, but based on many walks along the coats, that a group of hunter-gatherers consisting of a single family can find enough food along the European coast within a days’ walk. That means they cannot stay long at a single location, but have to keep moving. If I would have to do this I would walk north in spring and south in the fall, with the birds. European coasts have plenty of opportunity to do this. This must have stimulated a rapid spreading of humans over the fringes of the continent.  Only later the centers were populated, when hunting had been improved and people were able to catch rabbits, deer and wild pigs .
Interestingly, if we ignore some islands for a second, there is only one long European coast line: this must have been like a 2-way narrow Neolithic highway, on which bands of foragers constantly bumped into each other, trading, exchanging, fighting and intermarrying. The chance of meeting someone if you are both following the coast is 1000 times bigger than when you spread over the center of the continent. They all must have known each other... This could also be the reason that Neanderthalers were absorbed by incoming waves of new humans.
In stock and flow terms: the stock of humanity in Africa flowed into the Eurasian continent. The passage way were the coastal areas. The feeding capacity of the beaches determined their traveling speed. Bigger groups had to travel faster. Only when the beach highways became too crowded, and stocks of cockles, mussels and crab depleted, people had to move inland to forage.
According to the European committee, there is 89.000 km coastline in Europe.
Assuming a family eats 100 to 150 meter of coast line per day, and it takes 1 year to replenish the stock of crustaceans,  one family needs about 5 km coastline, permanent. This means that Pleistocene Europe could feed about 20.000 families, say 1 million people, on its beaches.

Monday, April 22, 2013

Target to create oscillation

In many industrial companies, December is a not a good month. The sales volume for these companies has an oscillating pattern over the whole year, with month-to-month differences that can be as big as 20%. Demand in December is the lowest of the year because of the Christmas holidays, and because in December demand is reduced by active de-stocking.
Managers have targets for running their business, and for many managers that includes a target  –strange enough if you look at it— to have a low level of working capital at the end of the year. The easiest way to achieve that target is to reduce the stocks.  The target is not to have a constant low working capital: it only needs to be low at the end of the year; This is obviously for reporting purposes: it looks good and tidy in the annual report.

A calculation example of the effect: If your customer on average has 60 days of stock, and the customer decides to reduce his working capital with ten percent,  in December he buys less product for the equivalent of 6 days' sales, creating an additional 20% (6 days divided by 30 days) dip in your already low December volume. 

As a result, in January stocks will be too low for normal operations and fast replenishments need to be ordered. This creates a hurried peak in January demand, often resulting again in lower February orders.  So the working capital target is responsible for a considerable part of the oscillating pattern: after a normal November, it creates a deep dip in December, a peak in January and again a dip in February.  The target thus contributes considerably to inefficiencies in the chain.  But you get what you ask: lower inventory.