Quick Order Pass

1
Quick Order Pass

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

2
Team Members
3
Overview

• Societal Problem
• Proposed Solution
• Project Schedule

4
Societal Problem

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

5
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
6
Traditional Transactions
Order

• Inefficient
• Inconvenient
• Error prone

Amount Owed
Cash/Credit
Change/Credit Receipt
Order
Amount Owed
Consider a typical order by a daily customer
Cash/ Credit
Change/ Credit Receipt
Id like a double tall, non-fat, decaf, vanilla
latte, one-pump walnut, with room, please
7
Proposed Solution

• Develop a system that can digitally
• Retrieve an order
• Provide payment
• Without verbal communication.

8
Typical Transaction with Our System
Order Payment
Receipt

• Quick
• Order is accurate
• Payment is precise
• Easy to use

9
Typical System Use
Customer , 30bits
1010010111101010101
Waves Pass
Receipt
Customer
Customer
Customer
Order Account Balance
Central Database
New Account Balance
10
Software Diagram
New Account Balance
Customer
Order Account Balance
Order Account Balance
New Account Balance
New Account Balance
Order Account Balance
Customer
Central Database
API opens check, Orders, pays and closes check
New Account Balance
11
Solution Will Not

• Eliminate preparation errors
• Preclude current ordering systems
• Can always order and pay
• Prohibit order changes
• Eliminate the casual customer

12
Project Organization
13
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

14
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

15
Evaluation Plan, Cont.

• Beta-site testing
• Product in real world environment
• Customer feedback
• Consumer feedback
• Seamless integration

16
Funding Plan

• SBIR Grant Funding
• National Science Foundation
• The NSF supports 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

17
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

18
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/commentar
y040130ram.htm http//www.starbucks.com/
19
Starbucks U.S. Market by Stores

• Source http//www.organicconsumers.org/starbucks/
  indie-coffee.cfm AND http//www.starbucks.com/abou
  tus/pressdesc.asp?id454

20
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?
21
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.
• McDonalds CEO Jack Greenberg
• http//pittsburgh.bizjournals.com/pittsburgh/stori
  es/2004/05/31/story6.html?tprintable208sep04
• http//www.chainleader.com/archive/0702/0702tech.h
  tml

22
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

23
Competition Table Quick Pass vs. Starbucks Card
24
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

25
Functional Flow
26
Quick Pass First Use
27
Functional Flow
28
Quick Order Pass Full Use
Order Display Double café latte Total
1.03 Change 0.00
Register Person Hi, how may I help
you? Customer (Uses Quick Order Pass) Register
Person Thank you and have a nice day.
Save Order
Pass
29
Required Components

• RFID Reader
• Model p_1023
• Transponder
• POS Terminal
• IBM 4695-322
• Software Package

30
Phase 0 Deliverables

• Feasibility presentation
• Milestone presentation
• WBS
• Final Approval presentation
• SBIR
• Project Website

31
Phase 0 Conception Schedule
32
Phase 0 Project Conception
33
Phase 0 Budget

• None

34
Phase 1 Deliverables

• Documentation
• Technical Description Paper
• Budget White Paper
• Draft Sub-contractual Paper
• Users Manual
• Market Research
• Prototype Design
• Lab Prototype
• Project Website
• SBIR Phase 2

35
Phase 1 Proof of Concept Schedule
36
Phase 1 Organization
37
Phase 1 Budget
38
Phase 2 Deliverables

• Production Specifications
• Beta-test contracts
• Management plan
• Personnel plan
• Test/Evaluation plan
• Marketing plan

39
Phase 2 Prototype Development
40
Phase 2 Prototype Development Organization Chart
41
Phase 2 Budget
42
Phase 3 Deliverables

• Sales Contracts
• Product Manuals
• Customer Support Location
• Product Roll-out
• Out Year Strategy

43
Phase 3 Production Schedule
44
Phase 3 Production Organization Chart
45
Phase 3 Production 1st Year Budget
46
Phase 3 Out Year Budget
47
Risk Analysis/Mitigation
48
Risk Matrix
5

Likelihood
1
5
Consequence
49
Starbucks Profit by Tag Use
Refer to Appendix for details
50
Starbucks Break Even Analysis
Refer to Appendix for details
51
QOS, Inc. Profit by Transponder
Refer to Appendix for details
52
QOS, Inc. Profit by Hardware
Starbucks SEC filing Long term goal of 30,000
stores
Refer to Appendix for details
53
QOS, Inc. Break Even Analysis of Product Roll Out
Refer to Appendix for details
54
QOS, Inc. Profit and Cost Analysis of Years after
Product Roll Out
Refer to Appendix for details
55
Summary

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

56
Questions

• ?

57
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

58
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?catego
ryUSBSensors http//www.starbucks.com
59
Hardware Installation Profit Table
60
Hardware Costs to Starbucks
Refer to Appendix for details
61
Transponder Cost to Starbucks
Refer to Appendix for details
62
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/commentar
y040130ram.htm http//www.starbucks.com/aboutus/pr
essdesc.asp?id451 http//www.entrepreneur.com/ar
ticle/0,4621,315202,00.html http//www.mindfully.o
rg/Technology/2004/HyperActive-Bob8sep04.htm
63
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

http//biz.yahoo.com/bw/041014/145258_1.html
http//www.glscs.com/archives/1.02.norton.htm?addc
ode30 http//www.thebatt.com/news/2002/08/12/Fro
ntPage/Starbucks.Store.Comes.To.College.Station.Sc
ene-518368.shtml
64
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

65
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

66
Starbucks Growth
67
Starbucks Projected Growth

• www.starbucks.com

68
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

69
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

70
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

71
Order Times
Average Order Time (from greeting to receipt) 42
seconds
72
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
73
Software Translation
Order , 100 bits
1010010111101010101.