The Pig That Inspired Toyota

Whenever writing a book, there’s always going to be details and story that eventually get cut for one reason or another. In a biography, when you’re trying to chronicle an entire life, this “cutting-room floor” material can still hold gems of learning and fascination. Here is one such story that didn’t make it into the final version of Deming’s Journey to Profound Knowledge but can have a second life here. And to read more stories like this one, check out the full book from John Willis out now.

Just walk out. No cashiers, no registers, no scanning. Pick what you want, put it in your shopping basket, and leave. As you exit the convenience store, your card on file gets charged automatically. No muss, no fuss. You just walk out.

At one time, this sounded like something from The Jetsons or Blade Runner. Today, however, you can find over two dozen Amazon Go stores scattered around major cities, including Amazon’s backyard of Seattle. Walk in, walk out.

These are as much of a mind flip as when Walmart rolled out self-checkout registers. Clarence Saunders, the inventor of the self-checkout, was convinced of how beneficial this type of shopping would be to both the shopper and the store. He wrote, “The store operates so automatically that the customer can collect [their] groceries [themself], wrap them and act as [their] own cashier. It eliminates the checkout crush, cuts overhead expenses, and enables a small staff to handle a tremendous volume.”

Not everyone is a fan: I know of a few older people who still refuse to use them, railing against newfangled technology. This is ironic, seeing as how the inventor was describing 1950s tech. Yes, Walmart was decades behind the ball.

Even Amazon Go isn’t a new invention. When the Amazon team launched the prototype store, I wonder if they realized they were decades behind Clarence Saunders’s retail store Keedoozle. While it sounds like a cool and/or cute Silicon Valley startup, the first store of the now-defunct pioneering grocery chain was less Silicon Valley and more Tennessee Valley. Memphis, to be exact.

Memphis—once the wholesale capital of the South—has also been a hotbed of retail innovation. After Keedoozle folded (the technology wasn’t developed enough for the real world), Clarence Saunders designed and prepped his next startup, Foodelectric. (Not terribly innovative when it came to naming his companies, if you ask me.) Unfortunately, Clarence passed away before his vision was realized.

Fortunately, his very first startup, Piggly Wiggly, was an astounding success, revolutionizing the retail industry and forever changing the way we shopped—something far more groundbreaking than just self-checkouts. A true innovator, Clarence went against virtually every established convention. I know “disruption” is now a buzzword, but this inventor disrupted his industry in every sense of the word. At its height, the company had 2,660 retail locations. Unfortunately, Clarence listed his company on the New York Stock Exchange and during an economic downturn tried to short his own stock. A group of Wall Street investors attempted a hostile takeover. He rallied, but in a quite suspicious set of circumstances, the NYSE governor’s board made a ruling that resulted in the founder being forced out. If history had played out slightly differently, instead of launching Amazon Go, Jeff Bezos might have bought Clarence’s brainchild. After all, Clarence beat Jeff to the punch by three months and a day.

Oh, and a century.

About a year after Ed tried to join the Army to fight on the Mexican Border, Clarence Saunders opened his first retail grocery store in 1916. At that time, shopping looked nothing like it does today. It operated more like a modern pharmacy. When you went into a grocer’s store, you went straight to the counter. There, you’d tell the clerk what you wanted: a pound of rice, two pounds of flour, a jar of pickles, a block of cheese. The clerk would disappear into the rows of shelves behind the counter, measuring and weighing out your foodstuffs, usually from huge wooden barrels. The clerk would bring it all back to the counter, ring it all up, and complete the transaction…or, likely as not, put it on the customer’s account to be paid later.

The idea of letting customers wander the shelves, picking and weighing their own food? Perish the thought. Even other retail stores relied primarily on a small army of clerks who waited on the customers almost hand and foot. You might recall Oleson’s Mercantile from the Little House on the Prairie series. Clarence’s “self-service store” was something no one had ever seen—or even dreamed of. The grocery store was laid out sort of like an assembly line: You entered through one turnstile; followed a continuous, one-way path that snaked back and forth through all the shelves; ended at a checkout stand where the clerk tallied up the prices of your individually marked items; and then you exited at another turnstile.

Clarence was first with:

• the standard checkout stands we use today at Walmart, Target, Kroger’s, and just about every retailer you can think of
• marking each item in his stores with its price; before this, the clerks were supposed to know how much to charge by heart
• the refrigerated cases we use today that hold deli meats, beer, and the like
• employee uniforms for “cleaner, more sanitary food handling”

The old guard was aghast. Customers used shopping baskets! They could pick things off the shelves with no supervision! There were no clerks to fetch anything! Who could think of something so ludicrous?!

The son of a sharecropper with all of two years of formal education…and did he ever prove them wrong. Within five years, Clarence had over 600 stores across forty states. By the time Deming married Lola Shupe in 1932, there were 2,660 nationwide, not to mention a raft of copycats.

There was one innovation in particular that had far wider repercussions than grocery stores and other retailers. Believe it or not, it was how Clarence’s employees stocked the stores’ shelves. Before the retail revolution, a grocer more or less stocked their store as you would a warehouse: What you saw is what they had. You couldn’t ask the stocker, “Are you sure you’re out? Could you check in the back?” There was no back.

That layout wasn’t efficient enough for Clarence. Instead of putting everything out on the store’s main floor, he had a stocking room at the back of the store. There was only enough of an item on the shelves at a time to satisfy customers in the line. Employees would “take stock,” go to the back storeroom, then quickly refill the empty spaces just in time for the next swath of eager shoppers.

“Just in time.” Those three words would become a cornerstone of Toyota Motor Corporation, then Japanese industry, then American manufacturing, and then global manufacturers. All from how Clarence Saunders stocked his shelves. You might have even seen this for yourself in the five hundred or so of his revolutionary stores left.

- About The Authors

John Willis

John Willis has worked in the IT management industry for more than 35 years and is a prolific author, including "Deming's Journey to Profound Knowledge" and "The DevOps Handbook." He is researching DevOps, DevSecOps, IT risk, modern governance, and audit compliance. Previously he was an Evangelist at Docker Inc., VP of Solutions for Socketplane (sold to Docker) and Enstratius (sold to Dell), and VP of Training & Services at Opscode where he formalized the training, evangelism, and professional services functions at the firm. Willis also founded Gulf Breeze Software, an award winning IBM business partner, which specializes in deploying Tivoli technology for the enterprise. Willis has authored six IBM Redbooks for IBM on enterprise systems management and was the founder and chief architect at Chain Bridge Systems.

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