Restaurant Efficiency Decision
May 5, 2008
November 19, 2012 1
– The Problem
– The Solution
• Prototype Demonstration
– The Actors
– Taking the Data
– Massaging the Data
• Questions On the Demonstration
• Phase II Grant Proposal
– Work Breakdown
– Line Item Budget
– Final Request
• Closing and Final Questions
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This section will describe the basic problem that RED AI was developed to
solve. Also the basic process that RED AI uses to solve the problem will
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As a manager do you ever
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Get Complaints About
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Or Hear About
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November 19, 2012 http://www.restaurant.org/research/ind_glance.cfm 8
• 164 each day
• $400,000 Average Startup cost
Based on new requests for business
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But there is a Problem
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Historically Common Failure
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What causes this Failure
November 19, 2012 Business weekly (May 2007) 12
Organization of the Data
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Current Consultant Statistics
• 63% of restaurants hire at least one efficiency
expert over their life time
• Average cost for this service is $80,000
• Average Return on Investment is nearly
November 19, 2012 www.gecconsultants.com/restaurant_profit.htm 15
In this section the RED AI Team will demonstrate the problem and the
solution of an inefficient restaurant solved by RED AI with audience
RED AI PROTOTYPE
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• Narrator – Alexander
• Owner – Michael
• RED AI Admin – David
• Manager – Patrick
• Backend – Mathew
• Frontend – Brian
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Come on in and sit down
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• Alex – Let me set the scene for you...
We are in “Sub Haus” a local
• [Brian gives out menus]
• Alex – “Sub Haus” is the type of restaurant that
RED AI is targeting… non-franchised, and
• We start in the managers office with him busily
working at his desk.
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• [Pat begins shuffling paperwork]
• Alex – It is the middle of the day and the
manager, Bill L, is still working on last weeks
closing paper work.
• [Brian brings out more paperwork]
• And the data just keeps piling up.
• Brian - Our sales are down by 20%
November 19, 2012 20
Matt’s first line
• [Matt comes in with more paperwork]
• And higher…
• Matt - I need your signature for this order.
• [Matt takes it away as soon as pat signs]
• Pat – Wait what was….
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Explain the problem
• Alex – So, high he has no time to even read
what he is deciding about. Again this is the
classic problem that leads to 60% of all
restaurants to fail.
• The manager is too busy
managing the data, to manage
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Mike from the Freezer
• [dishes crashing!!!]
• [Mike comes in and rants at Pat]
• Mike – Oh my God, I’m back in the freezer
with the hostess and I come out and the cooks
are having a food-fight! 200 people are going
to come here today and they’re only going to
leave $10 in tips! For the love of Christ, I hired
you to manage this restaurant! Now you’d . ..
November 19, 2012 23
Who can Save this…?
• [Mike and Pat freeze]
• Alex – The owner is unhappy with the
performance of the restaurant. So, is the
manager, but he is too busy to manager the
restaurant efficiently. Where can they turn
to? Who can save them?
November 19, 2012 24
Super Dave “Root” Harris
• [Dave appears] – I have a solution
• Mike and Pat together – Who are you?
• Dave – I’m a traveling RED AI salesman with a
software product that can turn your business
around. Do you have a computer handy?
• Mike – Right here
• [Dave starts to install RED AI]
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Expert System = RED AI
• Alex – RED AI is an expert system artificial
intelligence designed to model an operational
restaurant, analyze key profit factors, and
provide managers and owners with
suggestions to increase profit.
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Parse the Rules
• Alex – As we stated in the introduction, RED AI
does this by recording historical data and
combining that with expertly prescribed rules
to create suggestions. These suggestions
come from one of the four key profit factors.
These suggestions will take the piles of data
and produce easy to understand and
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RED AI is Self Aware
• Dave – Okay, let me setup RED AI for you. The
first thing we’ll do is select a database that
already contains a template of a sub shop, like
you have here. Then we’ll setup your user
• [Dave switches to blank database and begins
creating user accounts]
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Keep It Simple Stupid (KISS)
• Dave – I’ll keep your usernames and
passwords simple. Your username is “owner”
and your password is “o”. Your manager’s
username is “manager” and his password is
“m”. Your back-end manager’s username
“back” and his password is “b”. And your
front-end manager’s username is “front” and
his password is “f”.
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Get Pat Back Here
• Dave – Now run along and get your restaurant
• Mike – What?
• Dave – You heard me just fine.
• Don’t talk to me like that. Haven’t you heard
of customer service.
• Dave – We don’t believe in customer service
at RED AI. We believe in our product.
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No More lip Just Get Him Back
• Dave – Now run along and get your manager
before I leave you here floundering in a sea of
inefficiency and looming bankruptcy.
• [Mike calls to pat]
• [Pat enters]
• Pat – What’s this?
November 19, 2012 31
Pat is Online with RED AI
• Dave – This is RED AI, the restaurant efficiency
suite. I’m going to help you get acquainted
with it. I’ll show you how to log in and enter
your menu and schedule staff. First, you want
to login as “manager”. You’re password is
• [Pat logs in]
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Access Control is Good
• Alex - Notice how the settings tab is now
gone. As this is only available to
administrative users, like the owner and
salesman. Also as we go along here in this
demonstration notice how each different type
of use has different access levels.
• We already have the club sandwich and the
items for it already in the inventory.
November 19, 2012 33
Poll for New Subs
• Alex – We’re going to put two more menu
items in right now. One will be from the menu
in front of you. And one of your choice that
will include inventory items not listed on the
• [Alex polls and Pat and Dave input the data]
– Remaining 3 which one?
– Custom Name and price. Then inventory items.
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• Alex – Now the manager has to schedule staff.
He enters the date and time periods.
• [Pat starts to schedule staff do the TID]
• Alex - After clicking the next button, he enters
the number of people scheduled for each
• [Pat Finishes scheduling staff]
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Sub Haus is Ready to Rumble
• Pat – Alright, this seems fairly intuitive. I think
I can take it from here.
• [Dave leaves]
• [Pat leaves]
• Alex - Let us pretend, for this demonstration, a
whole day has now passed. At the end of the
shift, the back end manager has come in to
update the inventory.
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• [Pat and Matt enter]
• Pat – Matt, get in here. Are you done
• Matt – Yes
• Pat – Come here. I want to show you this new
program. Login as “backend” with password
• Matt – Um… that doesn’t work man.
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Backend does his thing
• Pat – Oh, sorry my bad… try logging in as
“back” with password “b”
• Matt – Ok, that works
• Pat - Now update the inventory by clicking on
the Update Inventory button
• [Matt updates inventory while Alex talks]
November 19, 2012 38
Talk About Stuff
• Alex - All the current items in the inventory
are listed here. All our back-end personnel has
to do is click on each blank and enter the
amount in the stock for that item.
• Pat – Okay good. You will have to do this at
close from now on.
• Matt - It shouldn’t be hard to do.
• Now go get Brian. I need him to come here to
update the sales information.
November 19, 2012 39
Frontend Does His Thing
• [Matt leaves and Brian enters]
• [Brian logs in as “front” with password “f” and
enters sales with Pat’s help]
• [Brian and Pat enter sales and talk about it]
• [Brian leaves]
• Alex – The manager has finished closing for the
day. All data has been inputted to RED AI for
• [Reference MFCD on side TV]
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• Alex – Now with our product, instead of going
through those enormous piles of data, he can
review it from RED AI with the click of a
• [Pat runs menu efficiency and sees suggestion
for popular data]
• Alex – In the description we see a suggestion
that the manager can clearly see and
November 19, 2012 41
Unusual Input Noticed
• [Pat runs service efficiency and sees unusual
• Pat – Huh. What’s this.
• [clicks on “unusual input” and calls Brian]
• Pat - Brian, come back here and bring your record
sheet. This program says we entered something
• Brian – Hello, oh hi boss.
• Pat –Did we really have a wait time of 103
November 19, 2012 42
Call for Brian to Find Out Why
• Brian - No, today was actually a slow day.
Why what time said that?
• [Pat say time period]
• Brian – oh no it let me check my sheet here.
On it was only 13 minutes… sorry.
• Pat – Okay I will fix it now and we will have to
have a talk in the morning about this.
• Brian – okay, bye.
November 19, 2012 43
Going to the Edit Tab
• Pat – Okay, lets see what we can do with this
• [Pat go to edit tab]
• Alex: It is possible to edit any of the data in the
RED AI database with the screens displayed by
the edit tab.
• [Pat go to edit tab DON’T EDIT JUST YET]
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Fixing the Data (edit)
• Alex - In this instance, our restaurant manager
will click the “Edit Customers” button and fix the
• [Pat correct error and close RED AI]
• Wait let me just check that that did something…
• [Restart RED AI and do Service Efficiency again]
• Okay, that seems to have fixed it. I’ll talk to the
owner tomorrow about the rest of this stuff, I'm
November 19, 2012 45
Stating the Obvious
mod(Data) = mod(output)
• Pat – Clearly editing the data effects the rules.
• [Pat leaves]
• The manager is now finished for the day and
goes home. The night passes without
incident. And RED AI is ready for the new day.
• [Pat enters]
November 19, 2012 46
Sleeping In His Clothes Agian
• [Mike enters]
• Pat – Good morning, boss. Did you sleep in
your clothes again last night?
• Mike – What’s that?
• Pat – It’s when people lose consciousness at
night and dream. But that’s not important
right now. I was looking at this program last
night and it has some suggestions for . . .
November 19, 2012 47
More Random Talk
• Pat – for improving the efficiency of our
• Mike – Does this mean I won’t end up living in
a van down by the river?
• Pat – Maybe. Sit down and take a look at this.
• [Pat pulls up menu efficiency]
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• Pat: According to this we have one item that’s
significantly more popular than another. See,
it lists the item off to the right when you click
on popular item and then you click on ______
and, according to this, 78 were sold to 148
• Mike – That sounds good to me. Hey, it says
we should raise the price. How much does . . .
November 19, 2012 49
How Much Does it Cost
• Mike – a ____ cost?
• Pat - _____
• Mike – We can probably go up to _____
• [Pat opens inventory efficiency]
• Pat – It says that our profit margin is low for a
club sandwich, that we should raise the price
November 19, 2012 50
Should We Raise it
• Mike – Do you think people would pay $7.80
for a club sandwich?
• Pat - Maybe, but probably not.
• Mike – Well, would you?
• I don’t eat here. I go across the street to Chez
Sub for lunch. It seems high to me though.
And do we really need a 300% profit margin.
November 19, 2012 51
No…So lets Edit the Rule
• Mike – No, we don’t need it. But what can we
• Pat – Well, I was taking a look at the manual
last night and it’s possible to edit the rules
that are responsible for these suggestions.
• Mike – How?
• Pat – I have to logout and you login as
November 19, 2012 52
Edit the Rule
• Mike – Okay, let’s see. . . Settings, manage rule
sets. That came up under inventory efficiency,
• Pat – Yep
• Mike. Okay. Well, this isn’t exactly intuitive,
but if I change this to a 2.5, this to a 3.5, and
this to 250, I think we’re good to go.
November 19, 2012 53
Mod(rule) = mod(output)
• Mike: Okay, now it says we can raise the price
to $6.83 to realize a 250% profit margin. How
much does a club sandwich cost now?
• Pat - $6.15
• Mike - Do you think people would pay $6.83?
• Pat – Seems reasonable to me. So changing
the Rule also effects the output….
• Mike: Okay, we’ll change that later. What
other suggestions did the program make?
November 19, 2012 54
• Pat – Close that and click on service efficiency.
• Mike – Looks like our wait staff is inadequate.
Let’s see what that means. They were only
pulling in 8% in tips. Let’s fire them.
• Pat – One of the waiters has a pregnant
• Mike – Well, that’s exactly his problem then,
November 19, 2012 55
• Pat - It could be our problem. He’s a former
postal worker. Besides, yesterday was sort of
a bad day because of the roofers.
• Mike - Okay, you’re right. Still, we ought to
train them. What do the other messages say?
• [clicks on add waiter then the date]
November 19, 2012 56
Owner’s last Statement
• Mike: According to this, we should add a
waiter because of the low tip percentage.
Let’s just do that instead of the training. The
last thing I need is to pay them to watch
videos on how to be a better server, especially
with our low employee retention rate.
• [Exit all that are left]
November 19, 2012 57
• Alex – Now that RED AI is in place Sub Haus
has gone from a failing…low
margin…inefficient mess to a well managed
and profitable restaurant.
• All for the low price of 100/month.
November 19, 2012 58
Please ask us questions related to the following topics:
• The demonstration today
• The development of RED AI and feasibility of RED AI
* Please hold and question about the SBIR till after the next section
QUESTIONS – PROTOTYPE
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In this section the organization, budget, and work to be done for phase
two will be discussed
SMALL BUSINESS INNOVATIVE
RESEARCH (SBIR) PHASE II
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Very High Level Work Breakdown
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November 19, 2012 62
Budget Line Items
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November 19, 2012 64
Thank you from the RED AI TEAM
Alexander Caulkins – Project Manager Matthew Crainer - Researcher
Brain T – Documents Specialist Michel J – Rule Coder
David Harris – Support and Marketing Patrick B – Free Thinker
November 19, 2012 65
RED AI Links
• Main website (CS 410)
• Prototype Website (CS 411)
November 19, 2012 66
Please ask us questions related to the following topics:
•Work break down
QUESTIONS – SBIR
November 19, 2012 67