Quick Order Pass: Quick Order Pass Presented By: Andrej Ciric, Chris Roberts, and Carlton Northern Representing: Quick Order Systems, Inc. CS410 - Professional Workforce Development I


Team Members: Team Members


Overview: Overview Societal Problem Proposed Solution Project Schedule


Societal Problem: Societal Problem The process coffee houses use to provide specialty orders is inefficient, inconvenient and error prone.


Inherent Complexity of Specialty Orders: Inherent Complexity of Specialty Orders Starbucks menu: 73 Regular Menu Items 10 Flavors of Syrup 13 Modifiers 9490 possible combinations assuming only (1) of each is selected. http://www.starbucks.com


Traditional Transactions: Traditional Transactions Inefficient Inconvenient Error prone “ I’d like a double tall, non-fat, decaf, vanilla latte, one-pump walnut, with room, please” Consider a typical order by a daily customer: Order Cash/Credit Change/Credit & Receipt Order Amount Owed Cash/ Credit Change/ Credit & Receipt Amount Owed


Proposed Solution: Proposed Solution Develop a system that can digitally: Retrieve an order Provide payment Without verbal communication.


Typical Transaction with Our System : Typical Transaction with Our System Quick Order is accurate Payment is precise Easy to use Order & Payment Receipt


Typical System Use:: Typical System Use: Customer # Receipt Customer # Waves Pass 1010010111101010101 Customer #, 30bits Central Database Customer # Order & Account Balance New Account Balance


Software Diagram: Software Diagram Central Database Order & Account Balance New Account Balance Customer # Customer # Order & Account Balance Order & Account Balance New Account Balance API opens check, Orders, pays and closes check New Account Balance New Account Balance


Solution Will Not: Solution Will Not Eliminate preparation errors Preclude current ordering systems Can always order and pay Prohibit order changes Eliminate the casual customer


Project Organization: Project Organization


Management Organization: Management Organization Weekly team meetings Take minutes Progress performance assessment Schedule deadlines WBS Team status checks Technical Progress and Reporting Evaluation plan Software development protocols CVS – (Concurrent Versions System ) Design Documentation


Evaluation Plan: Evaluation Plan Design Reviews All design documents evaluated before implementation Industry consultation as necessary Documentation generated Quality Reviews Deliverables evaluated at each phase by team Post mortem evaluation of group process and effectiveness Documentation generated Testing Testing at each stage of Research and Development Software team evaluation of product Documentation of testing process and integration


Evaluation Plan, Cont.: Evaluation Plan, Cont. Beta-site testing Product in real world environment Customer feedback Consumer feedback Seamless integration


Funding Plan: Funding Plan SBIR Grant Funding National Science Foundation The NSF support’s high quality projects on important scientific, engineering, or science/engineering education problems and opportunities that lead to significant commercial and public benefit. Phase 1 Maximum 100k December 8th Phase 2 January 29th Maximum 750k Old Dominion University Provides Facilities Ethernet


Marketing Plan: Marketing Plan Major coffee shop retailer criteria: Extensive market share Strong future growth and revenue potential Compatible market strategies in regards to our product High repeat order frequency


Market Identified: Market Identified Net Revenue 2003: $4.1 billion Net Earnings 2003: $268.3 million 77% of Net Revenue from beverage sales http://www.fool.com/news/commentary/2004/commentary040130ram.htm http://www.starbucks.com/


Starbucks U.S. Market by Stores: Starbucks U.S. Market by Stores Source: http://www.organicconsumers.org/starbucks/indie-coffee.cfm AND http://www.starbucks.com/aboutus/pressdesc.asp?id=454


Market: Customer Use: Market: Customer Use A: Are you a repeat customer here? B: Do you order the same thing most of the time? C: If you had small device that could store your order would you use it? D: If you could pay with this device also, would you use it?


Faster Service Generates Revenue: Faster Service Generates Revenue Statistics indicate that each six-second improvement in speed of service generates an extra 1 percent of sales. Wireless payment methods have shaved 15 to 20 seconds off transaction times. McDonald’s CEO Jack Greenberg http://pittsburgh.bizjournals.com/pittsburgh/stories/2004/05/31/story6.html?t=printable%208sep04 http://www.chainleader.com/archive/0702/0702tech.html


Starbucks Card: Starbucks Card Consumer use Stored value card Starbucks Card: 35 million cards activated to date. Customer “buys” card at store, over the phone, or on the Starbucks website Customer registers on Website or over the phone Ties registered user to unique number on card


Competition Table: Quick Pass vs. Starbucks Card: Competition Table: Quick Pass vs. Starbucks Card


Quick Order System: Quick Order System Will follow exact same registration process as current system Transponder can be in card or keychain format Requires addition of customer order number field in the central database


Functional Flow: Functional Flow


Quick Pass: First Use: Quick Pass: First Use


Functional Flow: Functional Flow


Quick Order Pass Full Use: Quick Order Pass Full Use Register Person: Hi, how may I help you? Customer: (Uses Quick Order Pass) Register Person: Thank you and have a nice day. Order Display: Double café latte Total: $1.03 Change: $0.00 Save Order Pass


Required Components: Required Components RFID Reader Model p_1023 Transponder POS Terminal IBM 4695-322 Software Package


Phase 0: Deliverables: Phase 0: Deliverables Feasibility presentation Milestone presentation WBS Final Approval presentation SBIR Project Website


Phase 0: Conception Schedule: Phase 0: Conception Schedule


Phase 0: Project Conception: Phase 0: Project Conception


Phase 0: Budget: Phase 0: Budget None


Phase 1: Deliverables: Phase 1: Deliverables Documentation Technical Description Paper Budget White Paper Draft Sub-contractual Paper User’s Manual Market Research Prototype Design Lab Prototype Project Website SBIR Phase 2


Phase 1: Proof of Concept Schedule: Phase 1: Proof of Concept Schedule


Phase 1: Organization: Phase 1: Organization


Phase 1: Budget: Phase 1: Budget


Phase 2: Deliverables: Phase 2: Deliverables Production Specifications Beta-test contracts Management plan Personnel plan Test/Evaluation plan Marketing plan


Phase 2: Prototype Development: Phase 2: Prototype Development


Phase 2: Prototype Development Organization Chart: Phase 2: Prototype Development Organization Chart


Phase 2: Budget: Phase 2: Budget


Phase 3: Deliverables: Phase 3: Deliverables Sales Contracts Product Manuals Customer Support Location Product Roll-out Out Year Strategy


Phase 3: Production Schedule: Phase 3: Production Schedule


Phase 3: Production Organization Chart: Phase 3: Production Organization Chart


Phase 3: Production 1st Year Budget: Phase 3: Production 1st Year Budget


Phase 3: Out Year Budget: Phase 3: Out Year Budget


Slide47: Risk Analysis/Mitigation


Slide48: Risk Matrix Likelihood Consequence 5 1 5


Starbucks Profit by Tag Use: Starbucks Profit by Tag Use Refer to Appendix for details


Starbucks Break Even Analysis: Starbucks Break Even Analysis Refer to Appendix for details


QOS, Inc. Profit by Transponder: QOS, Inc. Profit by Transponder Refer to Appendix for details


QOS, Inc. Profit by Hardware: QOS, Inc. Profit by Hardware Refer to Appendix for details Starbucks SEC filing: Long term goal of 30,000 stores


Slide53: QOS, Inc. Break Even Analysis of Product Roll Out Refer to Appendix for details


Slide54: QOS, Inc. Profit and Cost Analysis of Years after Product Roll Out Refer to Appendix for details


Summary: Summary Efficient and convenient Based on developed technology Highly accurate Easy to integrate Strong market potential


Questions: Questions ?


Appendix: Appendix A. Hardware Cost 47 - 48 B. Projected Cost and Profit 49 - 54 C. Determining Cost 55 D. Survey Raw Data 56 -57 E. Starbucks Information 58 – 62


Hardware Cost: Hardware Cost Hardware cost: RFID Readers: Base cost is 45.00, Cost to Starbucks 90.00 Cables: Base cost is 3.00, Cost to Starbucks 6.00 Installation: Base Cost is 110.00, Cost to Starbucks 220.00 Figures from Hardware Installation Table assume 3 registers. Transponder: Base Cost is 0.20, Cost to Starbucks is 0.30 5500 stores are capable of accepting the Starbucks Card currently http://www.phidgetsusa.com/viewcategory.asp?category=USB+Sensors http://www.starbucks.com


Hardware Installation Profit Table: Hardware Installation Profit Table


Hardware Costs to Starbucks: Hardware Costs to Starbucks Refer to Appendix for details


Transponder Cost to Starbucks: Transponder Cost to Starbucks Refer to Appendix for details


Determining Profit / Cost: Determining Profit / Cost Estimates based off Starbucks Net Revenue, 2003. 77% beverage sales 4.1 billion X 0.77 = 3.157 billion Time: 15-20 second range from statistics, we use 18 second average Sales increase 1% for each 6 seconds saved, therefore 18 / 6 = 3% increase in sales 3.157 billion x 0.03 = 94,710,000 million 94,710,000 assumes 100% customer use Scaled Values based on current Starbucks Card Customer use Starbucks Card represented 10% of all transactions in 2003 Starbucks Card, 35 million total activated to date Profit potential (assuming 10% customer use): 94,710,000 x 0.10 = 9,471,000 million Potential Cost: 35 million x 0.30 = 10.5 million http://www.fool.com/news/commentary/2004/commentary040130ram.htm http://www.starbucks.com/aboutus/pressdesc.asp?id=451 http://www.entrepreneur.com/article/0,4621,315202,00.html http://www.mindfully.org/Technology/2004/HyperActive-Bob8sep04.htm


Determining Profit / Cost for QOS, Inc.: Estimates based off current Starbucks trends and data. 6,000 Starbucks, 3 new stores open daily 35 million Starbucks Cards sold to date assume complete replacement in 3 years 12 million Starbucks Cards sold per year, assume sales of 12 million tags per year $.10 profit per sale of transponder, $474 profit per store installation 1st year QOS, Inc. production cost is 1,368,600 (estimated in budget) 25 installation technicians, assume retrofit average of 25 stores per working day 240 working days per year Profit for Product Roll Out: 35,000,000 / 3 years = 11,666,000 + 12,000,000 = 23,666,000 6,000 stores x $474 = $2,844,000 profit to retrofit existing Starbucks 25 / 6,000 = 240 working days to retrofit (240 working days = 1 year) 23,666,000 * $.10 = 2,367,000 profit from transponder sales $2,367,000 + $2,844,000 = $5,211,000 total Profit for years after product roll out: 3 new stores daily * 365 days = 1,095 stores 1,095 stores x $474 = $519,000 profit to retrofit new Starbucks stores 12,000,000 x $.10 = 1,200,000 profit from transponders $519,000 + $1,200,000 = $1,719,000 Determining Profit / Cost for QOS, Inc. http://biz.yahoo.com/bw/041014/145258_1.html http://www.glscs.com/archives/1.02.norton.htm?addcode=30 http://www.thebatt.com/news/2002/08/12/FrontPage/Starbucks.Store.Comes.To.College.Station.Scene-518368.shtml


Survey Raw Data: Survey Raw Data Total 50 people surveyed Starbucks, Ghent Location 3-5pm Questions Asked: 1. Are you a repeat customer here Yes: 49 No: 1 2. Do you order the same thing most of the time? Yes: 35 No: 15 3. If you had a small device that could store your order, would you use it? Yes: 27 No: 23 4. If you could pay with this device also, would you use it? Yes: 26 No: 24 5. Of the people who answered Yes to 3 would they also pay with it? Yes: 26 No: 1


Survey Raw Data: Survey Raw Data Location: Starbucks (Greenbrier location) Time: Times below recorded from Employee greeting, to receipt generation (in seconds) 81, 38, 32, 51, 46, 33, 72, 117, 76, 19, 24, 18, 23, 33, 77, 65, 32, 66, 16, 23, 31, 28, 14, 33, 40, 29, 25, 40, 130, 60, 31, 52, 20, 43, 41, 21, 37, 52, 24, 14, 18, 66, 24, 22, 35, 50, 20, 80, 34, 45 Average is 42 seconds


Starbucks Growth: Starbucks Growth


Starbucks Projected Growth: Starbucks Projected Growth www.starbucks.com


Commitment to Innovation: Commitment to Innovation “These strong trends can be attributed to an all-time high level of innovation, continued speed-of-service improvements, and successful new store concepts” Jim Donald, Starbucks CEO designate


Starbucks Vision: Starbucks Vision Starbucks continues to refine the Starbucks Experience: “Starbucks has become an enduring, global brand by continually raising the bar and finding ways to innovate throughout all areas of the business” CEO Designate, Jim Donald


Starbucks Order Modifiers: Starbucks Order Modifiers Americano: A coffee made w/ two shots of espresso and hot water. Breve: A latte made w/ half-and-half. Cappuccino: A drink made w/ espresso and foamed milk. Con Panna: Italian for whipped cream Creme: A coffee-free beverage Demitasse: Half-cup Doppio: Italian for double Double: Two shots of espresso Dry: More foam, less milk Espresso: Coffee's purest, sweetest and most intense form. Frappucino: Icy and smooth drink Grande: 2nd to the largest size drink Half-Caf: One shot of regular and one shot of decaf Latte: A drink made w/ espresso and steamed milk Light: Less of something in a drink Macchiato: Italian for marked or stained Misto: Italian for mixed, combination of drip coffee and steamed milk Mocha: A drink made w/ espresso, chocolate and steamed milk Quad: Four shots of espresso in a drink Ristretto: A short pull of espresso, capturing only the sweetest part Shaken: Iced tea or coffee mixed w/ ice in a shaker Short: Small drink size Single: One shot of espresso in a drink Skinny: Made w/ nonfat milk Solo: One shot of espresso by itself Tall: Regular size drink Triple: Three shots of espresso in a drink Unleaded: Decaffeinated Valencia: Orange syrup Venti: Large size drink Wet: More milk, less foam Whip: Whipped cream With Legs: To Go With Room: Space to add milk in a drink


Order Times: Order Times Average Order Time (from greeting to receipt): 42 seconds


Software GUI: Software GUI Register Person: Hi, How may I take your order? Customer: I would like a double café latte please. Register Person: Double café latte, that will be $1.03 please. Customer: Here is $2.00. Register Person: Okay $2.00 Register Person: here is your change and receipt. Thank you and have a nice day. Order Display: Double café latte Total: $1.03 Payment: $2.00 Change: $0.73


Software Translation: Software Translation Order #, 100 bits 1010010111101010101….