Baking and Computers, a Surprising History of Analytics Pioneers

Perhaps surprisingly, bakers have a history of being analytics pioneers, from the first business application ever to the latest in-memory technology.

In 1951, the J. Lyons company, famous for their tea-shops throughout the UK, built and used the LEO “Lyons Electronic Office” computer they had built to run the very first business application ever: bakery valuations.

LEO was a massive, valve-powered computer that occupied 5000 sq.ft. of space. It used sixty-four 5ft-long mercury tubes, each weighing half a ton, to provide just 8.75 Kb of memory.

According to the official LEO archive, the application was:

“a valuation of the bread, cakes and pies produced in a dozen Lyons’ bakeries for their assembly and dispatch to retail and wholesale channels. It integrated three different tasks that hitherto had been carried out separately: it valued output from each bakery at standard material, labor and indirect costs, as well as total factory costs; it valued issues to the different channels at standard factory cost, distribution cost, sales price and profit margin; and calculated and valued dispatch stock balances for each item.”

In other words, it wasn’t just the first business application, it was also the first example of actionable, computer-powered analytics and business intelligence.

By wonderful coincidence, I first talked about LEO in a post last year entitled Why The Last Decade of BI Best-Practice Architecture is Rapidly Becoming Obsolete. I explained that in-memory technology is transforming the way we do analytics, and used the analogy of how the change from disk-based databases to in-memory analytics is like the change from valves to integrated circuits:  a new, disruptive technology that was faster, cheaper, and more effective.

Turkish Baker UNO  is a perfect example of exactly that transformation. In UNO’s presentation at the SAPPHIRE NOW conference in Madrid earlier this year, the company explained how they are using in-memory technology and analytics to plan their market growth, using huge volumes of planning data from over 10,000 retail outlets.

Today, the average person in Turkey eats 124Kg of bread per year, over twice as much as the European average (even the bread-loving French eat only 57kg a year). But the majority of the market is made up of small, artisan bakeries, and the cost of bread has risen steeply over the last few years.  UNO believes it has a massive opportunity to raise its overall market share closer to the percentages of large bakeries in comparable countries such as Italy.

To do that, UNO needed a complete understanding of its baking and logistics business, faster than ever before:

“We operate in the consumer products industry. Everything is fast. Fast moving goods, fast operations, fast response to consumer demand, fast planning, and fast delivery. That’s why we generate huge data and we need to process it our way. FAST.”

The company used to use Excel for budgeting, with just 16,500 lines of data along three business dimensions. But much better visibility was required, using all the data available – the company stores more than 700 million detailed records in the sales planning application alone.

UNO concluded that the only solution that could cope with the volume of data and speed of planning they required was SAP HANA.

The results have been impressive. Compared to traditional databases, query times are 400 times faster, the database is 9.5 times smaller, and data loading is almost four times faster.

J. Lyons used to run their bakery valuations weekly. Sixty years later, and with a change in technology, UNO can do it much, much faster.

What are you waiting for? In-memory technology is an analytics revolution – and not just for bakeries!