Restaurant Efficiency Decision Artificial Intelligence

Prototype DemonstrationMay 5, 2008

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Outline• Introduction

– The Problem– The Solution

• Prototype Demonstration– The Actors– Setup– Taking the Data– Massaging the Data

• Questions On the Demonstration• Phase II Grant Proposal

– Work Breakdown– Organization– Line Item Budget– Final Request

• Closing and Final Questions

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INTRODUCTION

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 be discussed.

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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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Then you

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Industry Statistics

April 20, 2023 http://www.restaurant.org/research/ind_glance.cfm 8

Industry Growth

April 20, 2023 Based on new requests for business licenses 2007 9

• 164 each day

• $400,000 Average Startup cost

But there is a Problem

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Customer Flow

Customer Flow

InventoryInventory

StaffStaffMenuMenu

Historically Common Failure

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What causes this Failure

April 20, 2023 Business weekly (May 2007) 12

Organization of the Data

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RED AI

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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 $120,000

April 20, 2023 www.gecconsultants.com/restaurant_profit.htm 15

RED AI PROTOTYPE DEMONSTRATION

In this section the RED AI Team will demonstrate the problem and the solution of an inefficient restaurant solved by RED AI with audience participation.

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The Actors

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• Narrator – Alexander• Owner – Michael• RED AI Admin – David• Manager – Patrick• Backend – Mathew• Frontend – Brian

Come on in and sit down

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Welcome

• Alex – Let me set the scene for you...We are in “Sub Haus” a local sandwich shop

• [Brian gives out menus]• Alex – “Sub Haus” is the type of restaurant that

RED AI is targeting… non-franchised, and struggling

• We start in the managers office with him busily working at his desk.

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Manager’s desk

• [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%

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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 the restaurant.

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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 . ..

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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?

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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 implement suggestions.

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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 accounts.

• [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 manager.

• 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?

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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 “m”.

• [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.

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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 provided menu.

• [Alex polls and Pat and Dave input the data]– Remaining 3 which one?– Custom Name and price. Then inventory items.

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Schedule Staff

• 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 position.

• [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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Bad Password

• [Pat and Matt enter]• Pat – Matt, get in here. Are you done

cooking?• Matt – Yes• Pat – Come here. I want to show you this new

program. Login as “backend” with password “b”.

• 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]

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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.

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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 daily processing.

• [Reference MFCD on side TV]

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Menu Efficency

• 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 button.

• [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 understand.

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Unusual Input Noticed• [Pat runs service efficiency and sees unusual

input]• 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 wrong.

• Brian – Hello, oh hi boss.• Pat –Did we really have a wait time of 103

minutes today?

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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.

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Going to the Edit Tab

• Pat – Okay, lets see what we can do with this edit tab.

• [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 erroneous data.

• [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 tired.

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Stating the Obviousmod(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]

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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 . . .

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More Random Talk

• Pat – for improving the efficiency of our restaurant.

• 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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Inventory Efficency

• 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 customers.

• Mike – That sounds good to me. Hey, it says we should raise the price. How much does . . .

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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 to $7.80.

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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.

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No…So lets Edit the Rule

• Mike – No, we don’t need it. But what can we do?

• 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

administrator.

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Edit the Rule

• Mike – Okay, let’s see. . . Settings, manage rule sets. That came up under inventory efficiency, didn’t it?

• 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.

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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?

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Bad Girl

• 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 fiancée.

• Mike – Well, that’s exactly his problem then, isn’t it?

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USPS

• 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]

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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]

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Closing

• 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.

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QUESTIONS – PROTOTYPE

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

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SMALL BUSINESS INNOVATIVE RESEARCH (SBIR) PHASE II

In this section the organization, budget, and work to be done for phase two will be discussed

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Very High Level Work Breakdown

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Organization

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Budget Line Items

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Final Request

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Thank you from the RED AI TEAMAlexander Caulkins – Project Manager Matthew Crainer - ResearcherBrain T – Documents Specialist Michel J – Rule Coder David Harris – Support and Marketing Patrick B – Free Thinker

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RED AI Links

• Main website (CS 410)– http://www.cs.odu.edu/~cpi/cpi-f2007/redai/

• Prototype Website (CS 411)– http://www.cs.odu.edu/~cpi/cpi-2-s2008/redai/

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QUESTIONS – SBIR

Please ask us questions related to the following topics:•The budget•Work break down•Organization

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