In the global, wired economy, it’s hardly unusual for companies to set up reservation offices or telephone help desks in far-flung cities, even foreign countries. But JetBlue, based at New York’s Kennedy airport, is unusual in its commitment: its entire force of 550 reservation agents work from the comfort of their own homes, all around Salt Lake City. Why there? David Neeleman, JetBlue’s founder, had previously run Morris Air from the area until it was sold to Southwest Airlines in 1993. Neeleman promised his agents jobs if he ever started a new airline. JetBlue, which started flying in February 2000, gives its home workers a computer, but requires them to pay about $45 a month for two phone lines to handle calls and dial into the booking system. “It’s a small price,” says Smith, who makes reservations 25 hours a week in her slippers. (She makes about $9 an hour; starting pay is $7.75.) JetBlue doesn’t fuss about a dress code, but insists that callers not be treated to the sounds of domestic bliss, like crying kids. Supervisors monitor calls occasionally to make sure that all a customer hears is a friendly voice and a clicking keyboard.
The savings from running a home-based reservation center helped the airline report its first profit a mere six months after its first flight. A low cost structure is key to its goal of replicating the runaway success of Southwest. Among smaller, low-fare carriers–including Frontier, Spirit and AirTran–JetBlue wins the low-cost derby. Investors like its chances. The airline went public two weeks ago in the year’s hottest initial stock offering, with shares rising from $27 to $45. Neeleman says that JetBlue saves 20 percent per flight booked by using home agents instead of a call center (another bonus: happy workers mean a low turnover rate of about 10 percent). “It’s so valuable,” Neeleman says. Adds aviation consultant Stuart Klaskin: “The home reservation system is an integral example of Neeleman’s out-of-the-box thinking.”
Another example of that thinking: Neeleman gives all JetBlue pilots and technicians a laptop computer so they can get procedure changes online from the FAA. That way, there’s no chance they’ll miss a memo –the first step to making sure the airline is never fined for an infraction or grounded altogether. Neeleman expects more, of course. He’s banking on steady and strong growth from his fledgling airline–the same kind of growth that JetBlue’s reservation agents in Salt Lake expect to see every day from their kids.
WillaKenzie Estate A Big Step Forward For an Ancient Art
Bernie Lacroute knows a thing or two about technology. At Digital Equipment, he helped develop the Ethernet and VAX. At Sun Microsystems, he was second in command during its growth spurt. But after he made his fortune and semiretired more than 10 years ago, the native of Burgundy decided to pursue his love of the pinot family of grapes, and opened the WillaKenzie Estate winery in Yamhill, Ore.
Wine making is an ancient art, but Lacroute didn’t cork up his innovative impulses. He trained his eye on the way wineries mix the juice of grapes in tanks during fermentation with the “cap” of skins and seeds on the surface. The cap, which can be as thick as 12 inches, contains the tannins that give wine its color and flavor. The most gentle method of extracting tannins is the foot stomp (think “I Love Lucy” reruns), but most wineries use handheld “jackhammer” devices. Lacroute worried that the machines were much too rough on his grapes, and longed for a kinder, gentler way. “I knew we could do one better,” says Lacroute.
His solution: Big Foot, a 1,000-pound, pneumatically controlled, microprocessor-driven grape stomper. Big Foot and its three stainless feet move on a rail system above a dozen tanks, stomping each tank for about 20 minutes, two to three times a day, for about two weeks. “It’s so perfect because these plunges are gentle and replicable, whether it’s 7 in the morning or 10 at night,” says Laurent Montalieu, the head wine maker. Lacroute won’t patent Big Foot, preferring to give the specs away. The device is used in wineries in Washington, California and New Zealand.
The real payoff of Big Foot’s work is in the bottle, and WillaKenzie has won many accolades from wine connoisseurs as it’s quadrupled in size over the past six years to 15,000 cases of wine annually. So Lacroute says it’s now time to kick back. “I’m from Burgundy and I don’t play golf,” he says. “What I do is drink wine.’’ That is, until the spirit moves him to invent something else.
Men’s Wearhouse ThankYou, We’reDone, PleaseComeBackSoon
The Men’s Wearhouse recognizes that most men hate to shop. So the company has done everything it can to make buying clothes as quick as a commercial break during “Monday Night Football.”
It’s a huge bet. The company recently spent almost $10 million on tailor-made software for touch-screen registers to shave minutes off the time it takes to help customers. If one store is out of stock of a particular jacket size, for example, there’s no need to call around–the system provides instant access to the inventory of every one of the chain’s 600 stores. If a customer needs directions to another store, an employee can immediately link to Mapquest on the Internet. Questions about Jones of New York suits? Employees can simply visit its Web site to find answers to any question customers might throw their way. “We wanted to make their experience as painless and informative as possible,” says Jeff Marshall, the company’s chief information officer and architect of the system.
The most unusual time-saving feature of the new registers is a fingerprint scanner that lets managers make returns and exchanges more swiftly because the computer instantly recognizes them. With the old system, employees had to go through several screens and passwords to handle returns. The fingerprint scanners also help the chain cut down on losses from theft. “I know who is in the register, when they were in it and what transactions took place when they were in it,” says Marshall.
Industry experts say Men’s Wearhouse’s homegrown approach to technology is unusual. “Most retailers are users, not creators,’’ says Cathy Hotka, vice president for information technology at the National Retail Federation. “They saw a different reality and they went out and created the technology to support it.”
Because the system is only six months old, it’s hard for the company to measure whether it’s translating directly to more sales. Besides, guys generally aren’t known for communicating their feelings about a shopping experience, other than saying “Are we done yet?’’ But if the answer to that question is a quicker “yes,’’ that could buy Men’s Wearhouse a lot of loyal customers.
Greenpoint Mortgage Funding, LLC Appraise This: A Faster Way to Buy a Home
You know the drill. You’re in the middle of buying or selling a home, and it’s time to schedule the appraisal. Suddenly, your stress meter, already humming, starts peaking. Appraisers, after all, can undermine a deal by scaring away lenders if they decide that the home you so desperately want to buy or sell is overpriced. It’s a privilege for which you can pay $300 or more. In a busy market, even getting an appraiser to show up can take weeks, adding to the anxiety.
Now a new computer tool is quickly gaining popularity in the real-estate business that lets you worry less about appraisals and more about ripping down that ugly wallpaper. It’s called automated valuation modeling (AVM), and it basically does for homes what credit scoring has done for people: it reduces them to a number that lenders can use to make snap judgments. Banks have spent years building databases of old appraisals and comparable sale prices in different neighborhoods and regions, and can now apply complex formulas to all that data to determine in minutes whether a property is priced right. No appraisers needed. Time saved. Money saved.
Greenpoint Mortgage is among the early adopters of AVM. It loaned out a record $26 billion in mortgages last year, and has raised its share of the mortgage market in two years from 0.8 percent to 1.3 percent, thanks in part to the appeal of computer tools like AVM, which lowers the cost of an appraisal to $50 and can be done in a day. “This is a really competitive market, and it makes a huge difference to be able to process more loans quickly,’’ says company president S. A. Ibrahim. He expects that in two to five years his company will be able to give near-instant answers on mortgages to some borrowers.
Mortgage heavyweights Freddie Mac and Fannie Mae started using AVM a few years ago with tentative steps. They’ve been using it to approve less risky loans, such as refinancings, small second mortgages and loans to borrowers who boast enviable credit ratings and are planning to plunk down hefty down payments. “The models have gotten better and better,’’ says Peter Maselli, a senior vice president at Freddie Mac. Now if only somebody could invent a computer program that will help pack and unpack all those moving boxes.
Virgin Entertainment, North America Road Test: Taking the Music for a Quick Spin
It’s not easy for brick-and-mortar music retailers these days. More people are downloading free music from the Internet. Online music sellers are slashing prices, eating into profits. Business is particularly difficult for enormous music outlets like the Virgin Megastores that devote tons of floor space to obscure recordings by world musicians. How can Virgin hope to sell enough of these eclectic tunes to turn a decent profit?
Virgin may have found an answer. Jan de Jong, the company’s vice president for information technology, persuaded his bosses to try out electronic kiosks in Virgin’s stores that allow customers to sample 30-second snippets from a database of approximately 250,000 CDs. The experiment began last year in two of the chain’s outlets and was considered a huge success. Virgin executives found that when customers come into a store with a specific album in mind, they’re three times as likely to actually purchase the product if they give it a test drive. “The biggest problem we have as a music retailer is that we sell a product that is shrink-wrapped,” says de Jong. “You can look at it, smell it and see it, but not hear it.” The company now has about 15 of the $5,000 kiosks in each of four stores, and plans to install them in every one of its 22 outlets in the United States and Canada by next year.
The kiosks also help customers help themselves, a big advantage considering the enormous size of Virgin’s music stores, which average about 60,000 square feet. “Retailers can no longer hire enough people to keep the store open, much less to understand all of the different styles, from Celtic to rap,” says Dan Hopping, one of the IBM retail specialists who helped design the technology. “The kiosk is always on and is always an expert.” In addition to track sampling, the kiosks provide reviews from industry magazines like Spin, Vibe, Mix Mag and Rolling Stone, as well as pictures of the artists, track listings and album credits.
Riverdale Mills Good Lobster Traps Make Good Fences
Riverdale Mills made its name by building a better lobster trap. But since September 11, the small Massachusetts company has become better known for its security fences. Using the same plastic-coated wire mesh found on its lobster traps, Riverdale came up with a fence with such tiny openings that it is virtually impossible to scale or cut. Its WireWall already rings many American prisons and protects Kuwait’s border with Iraq. After the terrorist attacks, governments and companies around the world clamored to protect themselves with Riverdale’s fence, driving up sales roughly tenfold. “Nobody uses wooden lobster traps anymore,” brags Jim Knott, Riverdale’s salty 72-year-old founder. “And nobody’s going to be using chain-link fences for security anymore, either.”
Trapping seafood and making fences are hardly the type of businesses typically associated with cutting-edge technology. But for 24 years, Knott has outfitted his old paper mill with high-tech machinery that can spit out 400,000 lobster traps and miles of fencing a year. Knott’s lobster traps now control 90 percent of the market. And his business employs more than 100 workers and does over $20 million in annual sales. “What we’ve done has never been very flashy,” he says. “But it’s always worked and we’ve always found a way to make it better.''
Before Knott came along, fishermen caught lobsters the same way they had for centuries–with wooden traps. But while toiling at a New England company making plastic stethoscope tubes in the 1950s, Knott came up with an idea for a new way to make lobster traps, based on the same method stethoscope tubes were formed–by dipping metal wires into plastic. Knott, who caught lobsters as a child growing up in Gloucester, Mass., figured that plastic-coated wire mesh would make a more durable lobster trap than wood, which rots in salt water. But for the next two decades, Knott was unable to persuade a company to back his idea. So in 1978, he borrowed money, bought a dilapidated mill and invested in new machinery to crank out lobster traps.
At first Knott couldn’t even give away his newfangled traps. “Lobster fishermen aren’t real quick to change,” he says. Finally Knott’s traps caught on after he persuaded the best fishermen in the area, known as the highliners, to give them a try. To make new-age lobster traps, Knott designed the production line to use automatic welders to make the wire mesh and galvanize and coat the trap with plastic. Now that WireWall has become his hottest product, Knott’s spending big to boost production. In December, he installed a $2 million welder that churns out 10-foot-wide ribbons of fencing. And now he’s putting a 126,000-square-foot addition on his old mill. Knott isn’t worried about expanding in an uncertain economy. These days, security and seafood are growth businesses.
Pixar Animation Studios Enough Pixels. Time For Comedy Class
Exactly 2,320,413 computer-animated hairs make up the purple and blue fur covering Sully, the oversized star of the hit comedy “Monsters, Inc.” Pixar Animation Studios has developed software, called Fizt, that can make each strand curl on command. But before a single lock was attached to Sully’s skin, Pixar’s filmmakers spent more than two years combing through the movie’s script, making sure no story strand was out of place. Only then was the new software launched, and Sully brought to life. “Here, the art challenges the technology, and the technology inspires the art,” says John Lasseter, the executive vice president who oversees Pixar’s creative efforts.
Pixar, the maker of “A Bug’s Life” and the “Toy Story” films, is undoubtedly Hollywood’s highest-tech storyteller. It’s also one of its most reliable hit machines, as Pixar’s four films have generated an average gross of $216 million. But what really separates Pixar from the pack is that even with so many cutting-edge tools at its disposal, it moves at an Amish pace, working as many as five years on a single film, releasing a new movie only every 18 months. Distressed by early story problems on both “Toy Story 2” and “Monsters, Inc.,” for example, Pixar rebooted with new scripts.
Hitching 21st-century technology to old-fashioned storytelling has often been a messy marriage: more pixels than plot leaves you with “Final Fantasy,” a computer-generated sci-fi dud released last year. To make sure technology is not Pixar’s driving force, Pixar is pushing programmers harder than ever, and also encouraging them to abandon their workstations to study sculpting, figure drawing, screenwriting and improvisational comedy. Pixar’s light-filled offices were designed to force employees to mingle, even on their way to the restroom. It’s part of a strategy aimed at breaking down walls, even within job duties. “No one is saying ‘Just shut up and do your job’,’’ says Pete Docter, the director of “Monsters.’’ The design of one of Docter’s “Monsters” creatures, for instance, was hatched by software developers writing new computer language to animate fur.
With such success, you might think all the competing studios would have plundered Pixar like an unguarded vault–which, technically, it is, since unlike at every other studio nobody besides Lasseter works under contract. So far everyone is staying put. “A piece of paper won’t keep them here,” Lasseter says. “You want their heart here. So you make them creatively satisfied.” As is Pixar’s audience.
Lear Corp. Testing Data by the Seat of Your Pants
The test lab of car-seat maker Lear Corp. is like something from a Woody Allen science-fiction movie. Giant robotic arms with plastic attachments representing human buttocks repeatedly swivel on and off seats, testing their durability. In another area of the lab, college kids, housewives and senior citizens rest their rumps on car seats covered with sensors, as nearby Lear researchers scrutinize computer images of the testers’ cheeks that look like Doppler weather maps. For their expert opinions on Lear’s designs, the testers get $25 per car and the pride in knowing they’ve left a lasting imprint on the world’s car seats. “Comfort in a seat is a high priority for me,” boasts Tracy Merlo, a 43-year-old homemaker from Livonia, Mich., who’s been testing Lear’s seats for four years.
In the highly technical, and yet still subjective, business of designing car seats, this is the ultimate seat-of-the-pants test. Automakers and their suppliers like to brag that they can design and test cars entirely on computer, without ever touching pen to paper or building a running prototype. But Lear’s human seat testers underscore the need for interaction between computers and human beings. The opinions of real people are the “reality check” for the data-driven design process. If people can’t feel the difference, there’s no point in changing a seat design just because a computer measures a difference.
Lear credits the human touch with helping it design seats that J.D. Power has deemed among the best in the auto industry. With nearly $14 billion in annual sales, Detroit-based Lear is the world’s largest car-seat maker. But as auto sales have slowed, Lear has slashed production. Still, it isn’t cutting back on human research. Four days a week, testers file into Lear’s lab in the Detroit suburb of Southfield. They settle into seats covered with two thin mats–one for the bottom and one for the back. Different colors on the computer screen signify degrees of pressure. Designers use that data to sculpt seats that fit like a glove.
Bonny Thomas, who oversees Lear’s consumer research, has even taken Lear’s research on the road. She has mapped bottoms in Europe and Asia. And besides gathering important data to build better seats, Thomas has discovered an interesting physiological difference among seat sitters around the world. Americans, she says, have the largest rear ends in the world.
Target Stores Taking a Swipe at the Problem of Coupons
So, when was the last time you sat down and painstakingly went through all the fliers in your newspaper and cut out coupons? Can’t remember, right? Executives at Target know firsthand that very few people actually clip coupons. To this discount retailer, paper coupons are a waste of money because they’re expensive to produce and even more expensive to distribute.
Enter the paperless coupon, which Target claims will revolutionize the way it does business. Here’s how it’s supposed to work. Customers will use their home computer to download offers onto a Target credit card embedded with a computer chip, using a card reader that the chain will provide free of charge. Shoppers can then redeem the electronic discount at their local Target store.
The goal is to personalize promotions. If you buy thousands of dollars’ worth of electronics from Target, executives will then reward you with a reduced price on the latest tech gadget as an incentive to spend even more. Buy enough Target clothing and get frequent-flier points. Purchase a phone and earn free cellular minutes. Customers can also let the technology do all the bookkeeping as they rack up points on various reward programs.
These kinds of promotions will help give Target executives insights into buying patterns. “It’s not just ‘get 30 cents off’,” says Jerry Storch, Target’s vice chairman. “If we give a bunch of people an offer and they use it once and never use the product again, then that’s not a smart offer. The whole point of couponing is to get trial.” Storch adds that the money Target will save by tossing out the old system of paper coupons (98 percent of which are thrown out) can be used to attract partners for special promotions. The savings will also help Target lower prices to survive and thrive in the cutthroat price wars with other discount retailers. “It’s an effort to be constantly lowering prices,” he says.
Target has already issued more than 2.5 million of the chip-embedded cards, making it the largest issuer of smart Visas in the country. And while retailers have generally struggled to find a killer app for smart-card technology, Target expects it will be the exception. “Target is the first major retailer that has taken smart cards’ potential and tied it into promoting their products,” says Andy Vanderhoof, the president of the Smart Card Alliance, an industry trade group. “What they are doing is trailblazing.” If Target can really make this new system work, it will earn the familiar bull’s-eye it uses for a logo.
LO-Q PLC Step Aside: A New Line on ‘Civilized Waiting’
A decade ago Leonard Sim, a British engineer, stood in line with his wife and two sons for two hot, miserable, sweaty hours for the Little Mermaid ride at Universal’s theme park in Orlando. When they finally made it to the front, they learned that the ride would be out of order for the rest of the day. Fed up, Sim’s wife challenged him to come up with a better way.
It took a little more sweat, but Sim finally came up with a solution–a pagerlike device, dubbed the Q-bot, that lets people reserve a place in line and then roam around a park until it’s their turn to board. Sim now has theme parks lining up to use it. Six Flags officials say they started last season with 60 Q-bots at their Atlanta test site–and ended up ordering 740 more because the system was so successful. This year Six Flags is rolling out Q-bots at eight more of its theme parks. “The No. 1 complaint at the park is, ‘Gosh, it’s a great park, but if we just didn’t have to wait for the rides’,” says John Odum, general manager of Six Flags Over Georgia. “Now they don’t have to wait.”
Virtual queuing, as Sim calls it, starts with visitors to a theme park renting a Q-bot for the day ($10 for the device, plus $10 for each member of the family that shares it). They can then set their place in line by pointing the device at a special box by the entrances to the most popular rides. Now they’re free to wander the park until the Q-bot chirps and vibrates to alert them to a screen message that says it’s time to head toward, say, the Batman ride at Six Flags Over Georgia. Robert Ulrich and his 14-year-old son, Sam, are among the 80,000 visitors who’ve tried the Q-bot. “It’s civilized waiting,” says Ulrich. To keep fisticuffs at busy theme parks to a minimum, the system won’t let Q-bot users “jump” the queue and cut ahead of people who are waiting the old-fashioned way.
The Q-bot system knows where each visitor is at all times, which makes “proximity marketing” easy. The Q-bot signals when it knows a family is near a certain restaurant, for example, and offers a discount to get them to chow down. “It’s immediate advertising,” says Sim, whose two-year-old British company employs 23 people. And this year Six Flags Over Georgia is testing the tracking feature to help parents find lost children (kids would wear a special wristband).
Sim expects that theme parks in Europe will soon catch on to his technology. But for now he’s focused on the United States, home to half the world’s theme parks, not to mention people who are generally “a bit more entrepreneurial and open to new things,” he says. Sim’s wife, by the way, has said she would like her husband to turn his energies to finding a way to make shopping more pleasurable. He’s working on it.
Beth Israel Deaconess Medical Center A Tech Transplant for The Emergency Room
It might be a great prop for the set of “ER.” But as an organizational tool, the dry-erase board that helps emergency doctors and nurses keep track of patients is as outdated as using leeches as a cure-all. The big, white boards aren’t very user-friendly either: patient anonymity is sacrificed; they’re prone to human error and they’re tough to update when juggling a lot of sick people.
Who better to figure out a solution than some techies with medical degrees? That’s what happened at Boston’s Beth Israel Deaconess Medical Center when three doctors put their heads together to devise a new system. The result: an “electronic dashboard,” a four-foot-wide, color-coded, wireless plasma display to replace the Jurassic white board in Beth Israel’s emergency department. It’s a study in primary colors: red, blue and green (with shades of pink and blue thrown in for patient gender). The colors are geared to the severity of the complaint: red for the most serious, green for less-urgent cases.
The doctors didn’t stop there. They completely rewired Beth Israel’s new emergency department, which opened last July. “That was a perfect opportunity to get in there and do some things right,” says Dr. Larry Nathanson, a full-time emergency doctor who led the team that developed the system, at a cost of roughly $200,000. “So we jumped on it.”
A patient is first met by clerks who load his registration data into a laptop. That information is immediately transferred to the dashboard. As doctors examine patients (whose names appear on the board as initials only), they enter their orders and diagnoses into wireless laptops–again automatically updating the dashboard. For example, “XR” indicates X-rays. That bar will turn green when a patient’s X-rays are complete. “CC” stands for chief complaint. These terminals talk to the hospital’s Legacy system–its central database–so personnel have immediate access to medical histories, too. And each doctor is equipped with a wireless phone that receives office calls–eliminating the need for overhead paging.
Nathanson, who did fellowships in medicine at Harvard and medical informatics at Beth Israel, plans to extend the use of the dashboard to disaster-response teams. They currently keep their records on paper, he says. Instead, data could be recorded via satellite-networked laptops, providing real-time situation updates to a “dashboard” at a central command post. Such a system could even provide immediate data analysis during and after a disaster to help spot patterns that might suggest the presence of biological or chemical agents.
For now, Nathanson, whose many hats include handling clinical research and development for Beth Israel’s parent company, CareGroup Health System, is still refining the new technology to help reduce overcrowding in emergency departments. With too many patients, too few nurses and not enough beds, hospitals like Beth Israel are often forced to close their doors for several hours, and “divert” patients to other hospitals. According to Nathanson, the dashboard has already reduced the number of hours during which Beth Israel had to divert patients–it dropped to 40 hours during a recent six-month stretch, compared with an average of more than 450 hours at other nearby facilities over the same period. And Nathanson estimates staff has cut out 30 minutes of wasted time per shift searching for all the information that’s needed to treat or release patients. For the 60,000 patients who come to Beth Israel’s emergency department every year, it can also save a few hours of waiting time. “I can actually spend more time with my patients now,” says Nathanson. “That’s good medicine.” And that’s just what the doctor programmed.
