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Nov. 28, 2011—The Ultimate Manufacturing Corp.’s VP of logistics put down the report and smiled. There had been considerable resistance two years prior, when he had engaged Smoke & Mirrors Logistics, but the company’s performance report for the previous month showed it to be consistently exceeding the requirements of its service level agreement (SLA). In particular, its put-away performance had been outstanding, as it had been every month since the firm’s launch. The SLA specified two hours from goods receipt to put away, and the task was always completed well within the requisite time—often within one hour. Such performance reports were provided for all of the company’s operations, including manufacturing, materials management, line-side kanban replenishment and anywhere else that physical activity took place.

But what was that performance report based upon? Since what is being measured is a physical activity, the report could be based only upon observations of that activity. In the case of the requirements for put-away, that activity would consist of moving goods received from the inbound dock door to their correct storage location. The time taken to accomplish this is measured from when the products crossed the receiving dock door until the time at which they were put away. The SLA allows two hours for this task, so provided that all goods are put away within that timeframe, the SLA has been met.

But how was that data collected? Currently, most warehouse operations do not record the exact time that goods arrive through the receiving dock door. It’s much more likely that a manual bar-code scan of the received goods or pallets is performed on the inbound dock itself, though it’s also possible to scan inside the truck before offloading. When the received products are moved to their storage location, the goods or pallets are scanned once more, along with a location code, thereby indicating that put-away has been completed. The time between that first receiving scan and the put-away scan is the total put-away time, as specified in the SLA. So everything is OK, then?

It might not be. Imagine a scenario in which the logistics service provider (LSP) is short of warehouse associates, and thus risks not meeting the SLA. What if the truck were unloaded, and its contents temporarily staged at inbound, until sufficient labor was available to complete put-away, preferably in half the time specified in the SLA? That first scan is delayed until the LSP is sure that put-away can be completed well within the SLA’s stipulations. No receiving scan is conducted, so the start time for the put-away measurement has not yet been triggered, even though the goods have been received.

The system would not record what had physically occurred. Consequently, the logical and physical inventory counts would be out of sync, and the LSP’s reported performance would not match the actual physical performance achieved. Indeed, the reported performance would far exceed the actual levels. The LSP’s customer would be happy, perhaps even extremely pleased, with the LSP’s performance above and beyond SLA. But they would be happy about the performance that they did not receive, instead of being concerned about the one that they should have received but didn’t.

So what can be done in these situations?

Tokyo Electric Power’s sale of its entire shareholding in KDDI, the country’s second-largest mobile phone operator, should serve as a reminder to the rest of Japan Inc.

Listed companies can twist themselves into knots trying to justify big holdings of other listed companies, but when it comes down it, all of the holdings are expendable. Yes, Tepco and KDDI were great pals in 2005-06, when Tepco sold KDDI two telecoms businesses in exchange for new shares, and the pair made vague promises of an alliance to mount a challenge to NTT (which never materialised). But when Tepco’s viability was threatened, post-Fukushima, its 8 per cent of KDDI was suddenly no more vital than its 5 per cent of Recruit Co, a publisher. Both were part of a Y330bn portfolio of securities that were “not directly related to the electric power business” at the end of the second quarter.

There is something to be said, of course, for equity relationships that develop into something more: Nippon Steel and Sumitomo Metal owned stakes in each other, and produced and procured jointly, before agreeing a full merger earlier this year. But all too often the overlaps serve no obvious purpose.

At the end of March this year, Japan’s cross-shareholding ratio – the percentage of the total market value of listed companies owned by other listed companies (excluding insurers) – stood at 11.1 per cent, little changed on the 11.5 per cent reading last year, according to Nomura. That has come down a lot since 1990 (33 per cent), the earliest year for which statistics are available, but not far enough. If returns from these securities are not exceeding the cost of capital, then they are destroying shareholder value. More to the point, if managers are not running businesses as if their very survival were in doubt, then why on earth not?

Email the Lex team in confidence at lex@ft.com

George Osborne cheered energy intensive industries by confirming a £250m package of support in a bid to “keep industry and jobs in Britain”, but environmental groups condemned the autumn statement as a “polluter’s charter” that raised questions over the coalition’s ambition to be at the forefront of fighting climate change.

The measures, a mixture of compensation and tax relief, will be made available to counteract higher costs as a result of the carbon price floor as well as costs under the European Union’s emissions trading system.

Mr Osborne also announced relief for motorists by cancelling the 3p rise in fuel duty planned for January.

While the news, which had been heavily trailed, was not a surprise, the rhetoric was.

“We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers,” the chancellor said. “All we will be doing is exporting valuable jobs out of Britain,” he added, warning against burdening business with “endless social and environmental goals”.

The language echoed comments made by Mr Osborne last month, when he told the Conservative party conference that “we’re not going to save the planet by putting our country out of business”.

Describing the autumn statement as “a polluters’ charter”, John Sauven, executive director of Greenpeace, said the chancellor had “effectively destroyed any remaining credibility of the coalition as a friend of green jobs, green growth and protection of the environment”.

The government earlier this month sparked a backlash from the solar industry over its plans to cut subsidies to the sector.

The proposed introduction of a carbon price floor of £16 a tonne from April next year – to encourage low-carbon forms of electricity generation including nuclear power – had sparked warnings from the CBI employers’ group and the EEF, which represents manufacturers, of the huge cost to business.

The government will now provide up to £100m over the spending review period to mitigate the effects of the carbon price floor on electricity costs to heavy energy users. At the same time, it will provide compensation for the indirect impact of the EU emissions trading system on electricity costs of up to £110m.

Companies have been concerned that electricity generators are passing on the costs of complying with the scheme, which makes companies pay for their pollution.

Separately, the government is also increasing the rate of tax relief that companies can claim from the UK climate change levy. Companies can claim a 65 per cent rebate on the tax, but the government is planning to increase this to 90 per cent from April 2013. The move will cost the Treasury about £40m over two years.

Tom Crotty, a director of Ineos, a big privately owned chemicals company that employs 4,000 people in the UK, said the measures recognised that “industries like ours are vital to the future of the economy rather than being a negative part of it”.

Mr Crotty said the measures would make it easier for Ineos to invest in new products and processes – involving for instance biofuel production – that could help the country towards a “greener” economy by leading to lower emissions or carbon dioxide and less use of energy.

Jeremy Nicholson, director of the Energy Intensive Users’ Group, which represents other companies in sectors such as steel, cement and ceramics, said: “If we had not seen a shift in attitudes by the government towards taxing industries that use a lot of energy then it would have been very damaging to their futures in the UK.”

Companies in the group employ about 200,000 in the UK or almost one in 10 of the manufacturing workforce.

Nov. 28, 2011—Great Wolf Lodge, which operates 11 indoor waterpark resorts across North America, provides a variety of entertainment features for children, including an RFID-based MagiQuest interactive game, first installed in 2009. This fall, at Great Wolf’s site in the town of Scotrun, located in Pennsylvania’s Pocono Mountains, the company installed a new interactive game known as Story Explorers, designed for its younger guests, and offering a storytelling experience personalized via radio frequency identification. Creative Kingdoms is the provider of the MagiQuest and Story Explorers systems.

Great Wolf offers a variety of interactive entertainment for its guests. With the dragon-slaying game MagiQuest, each child carries a wand that emits an infrared signal. The player can point the wand at various stations throughout the resort facility—such as video kiosks or projections rooms that display items like a treasure chest or “magic” crystals—in order to gain points, as well as trigger such results as opening the chest or illuminating the crystals. Each station is equipped with an IR receiver in addition to an RFID reader. Moreover, a child can carry a compass equipped with a passive high-frequency (HF) 13.56 MHz RFID tag compliant with the ISO 15693 standard. When the compass—containing an RFID wristband supplied by Precision Dynamics Corp. (PDC)—is placed within the vicinity of a station’s SkyeTek Skyemodule reader, the player earns credit points known as “runes,” and thus advances further in the game. MagiQuest is designed for older children, according to the resort, while Story Explorers is designed specifically for guests ages two to 10.

Story Explorers employs 13.56 MHz PDC RFID wristbands, attached to stuffed toy animals and reader modules built into two dozen action-station kiosks, each consisting of a touch screen and computer. The game also utilizes software residing locally on each kiosk that reads and writes data to every tag, in order to maintain a record on the tag regarding which kiosks a particular child has visited. In that way, says Amanda Roark, Great Wolf Lodge’s senior communications manager, each kiosk’s software reads the tag’s data and, based on the results, provides appropriate information on the kiosk screen, such as a storybook text and pictures.

A child using the system first builds one of six stuffed toy animal characters—Wiley Wolf, Violet Wolf, Oliver Raccoon, Rachel Raccoon, Brinley Bear or Sammy Squirrel—from “The Perfect Howl,” a story developed by Great Wolf. The storyline’s current plot centers on Madison, a wolf that must find his howl before the wolf pack’s monthly howl-at-the-moon session. During the game, children read the story (or have it read to them) and, along the way, visit action stations and view parts of the tale, thereby helping return Madison’s howl to him in time. Great Wolf employees attach an RFID-enabled wristband to each animal’s wrist or ankle. The player first dresses his or her toy, then poses for pictures and begins the “storyteller quest.” (When the child is finished playing the game, the story is printed in the form of a book, incorporating his or her pictures, which is then given to the child to take home.)