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Quick Order System Prototype Demonstration Computer Productivity Initiative Spring 2005

Quick Order Pass. Quick Order System Prototype Demonstration Computer Productivity Initiative Spring 2005. Team Members. Overview. Societal Problem Proposed Solution Demonstration. Societal Problem.

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Quick Order System Prototype Demonstration Computer Productivity Initiative Spring 2005

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  1. Quick Order Pass Quick Order System Prototype Demonstration Computer Productivity Initiative Spring 2005

  2. Team Members

  3. Overview • Societal Problem • Proposed Solution • Demonstration

  4. Societal Problem • The current ordering process used in coffee shops to provide specialty-orders is inconvenient, inefficient, and error prone.  • These inefficiencies stem from inherent menu complexity and the human to human flow of data.

  5. Inherent Complexity of Specialty Orders http://www.starbucks.com

  6. Traditional Transactions • Inefficient • Inconvenient • Error prone Consider a typical order by a daily customer: “ I’d like a double tall, non-fat, decaf, vanilla latte, one-pump walnut, with room, please ”

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

  8. Solution Characteristics • Quick • Order is accurate • Payment is precise • Easy to use

  9. 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

  10. Explanation of QOP Customer #, 30bits 1010010111101010101 Waves Pass Receipt Customer # Customer # Customer # Order & Account Balance Central Database New Account Balance

  11. Solution Will Not • Eliminate preparation errors • Replace current ordering systems • Prohibit order changes • Eliminate the casual customer

  12. 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?

  13. Market Identified • Net Revenue 2003: $4.1 billion • Net Earnings 2003: $268.3 million • 77% of Net Revenue from beverage sales Source: http://www.organicconsumers.org/starbucks/indie-coffee.cfm

  14. 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

  15. 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

  16. Required Prototype Hardware RFID Transponder RFID Antenna RFID Reader Simulated POS Terminal

  17. Lab Prototype vs. Real Product Simulated POS Terminal Micros 3700 POS Terminal RFID Reader RFID Reader

  18. Production 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 Simulated for Prototype

  19. Phase II: Schedule

  20. Phase II: Staffing Plan

  21. Phase II: Budget Proposal

  22. Break-Even Analysis

  23. Risk Matrix 5 Likelihood 1 5 Consequence

  24. Alternative Markets

  25. In-store Demonstration • Use Cases • Non-QOP based transaction • QOP based transaction • Favorite order and payment • Payment only • Update QOP favorite order information • Credit QOP account

  26. QOP Customer Website Demonstration QOP Customer Website • Login • Change personal information • View/Modify favorite order • View/Add funds • View transaction history

  27. Conclusion • Completed Phase I • Prepared for Phase II • Questions?

  28. Appendix: Break-EvenAnalysis justification • 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 fixed cost is $647,960 (estimated in budget) • 1st year variable cost's are $85,300 per installation tech. • Assume 1 installation technician, can retrofit with an average of 1 store per working day • Assume replacement of Starbucks Cards proportional to retrofitted stores • Profit for Product Roll Out: • 35,000,000 + 12,000,000 = 42,000,000 Starbucks Cards to replace. • Number of retrofitted stores x $474 = profit to retrofit existing Starbucks • Number of retrofitted stores / Current number of stores * $.10 = profit from transponder sales

  29. Appendix: References RFID: http://www.ems-rfid.com/whatisrfid.html http://www.dimension-x.com/cf-mag.htm Accuracy: http://www.biz-architect.com/breakthroughs_at_drivethroughs.htm http://dsonline.computer.org/0303/d/p1app_print.htm http://www.qsrweb.com/hottopic_fastlane.htm http://www.g3act.com/qsr/2001QSR.pdf http://web.mit.edu/ctl/www/research/sc2020/SC2020%20IAC%20Proceedings.pdf http://www.qsrmagazine.com/drive-thru/2003/page3.phtml http://www.restaurant.org/rusa/magArticle.cfm?ArticleID=443 http://www.g3act.com/qsr/2001QSR.pdf http://www.kioskcom.com/articles_detail.php?ident=1942 Speed: http://www.nytimes.com/2004/07/18/business/yourmoney/18mac.html?ex=1097640000&en=529d90459b9e77a7&ei=5070&oref=regi http://www.hme.com/pdfs/WirelessIQ.pdf http://www.qsrmagazine.com/drive-thru/2002/index.phtml http://www.usatoday.com/money/covers/2002-04-03.htm http://www.mindfully.org/Technology/2004/HyperActive-Bob8sep04.htm http://www.chainleader.com/archive/0702/0702tech.html Definitions: http://www.nationmaster.com/encyclopedia/Fast-food-restaurant http://www.media.mcdonalds.com/secured/news/pressreleases/2004/Press_Release03252004e.html

  30. Appendix: References Starbucks:. http://www.msnbc.msn.com/id/6100243/site/newsweek/ http://www.starbucks.com http://biz.yahoo.com/bw/041014/145258_1.html http://www.fool.com/news/commentary/2004/commentary040130ram.htm http://biz.yahoo.com/e/040810/sbux10-q_a.html http://www.entrepreneur.com/article/0,4621,315202,00.html http://www.hoovers.com/starbucks/--ID__15745--/free-co-fin-annual.xhtml http://seattlepi.nwsource.com/business/114224_starbucks26.shtml http://biz.yahoo.com/bw/041014/145727_1.html A. Growth http://www.starbucks.com/aboutus/pressdesc.asp?id=449 http://www.starbucks.com/aboutus/pressdesc.asp?id=453 B. Customers http://www.fool.com/specials/2004/04020200ceo.htm http://www.franchise-chat.com/resources/whats_new.htm C. Starbuck’s Card http://www.starbucks.com/aboutus/pressdesc.asp?id=451 http://www.starbucks.com/aboutus/pressdesc.asp?id=397 Customer Service: http://www.msue.msu.edu/msue/imp/modtd/33300010.html http://news.bbc.co.uk/1/hi/business/3833433.stm http://www.spcnetwork.com/mii/2001/010423.htm http://www.prophet.com/knowledge/articles/downloads/brand_contract_sd.pdf http://www.southcoasttoday.com/daily/07-01/07-15-01/b03bu066.htm http://www.qsrweb.com/news_fastcasual_loyalty_93003.htm http://www.hme.com/pdfs/Communication.pdf http://www.hme.com/pdfs/pr082300_clearsound3.pdf http://www.hme.com/pdfs/pr070102.pdf http://msnbc.msn.com/id/5233899/

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