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OPERATIONS PROJECT: group six

Mainline Squeeze

PART ONE: STRATEGY

“ to provide high

quality, cold-pressed

healthy juices to the

mainline”

OUR MISSION IS…

Global juices industry worth $84 BN (2010)

The green juice market accounted for $3.4 billion of the $258 billion US market for nonalcoholic beverages (2012)

Individuals ages 20-30 looking for portable, and nutritious snacks or meal replacements

Benefits: Vegetable consumption, glowing skin, weight loss

THE JUICING CRAZE:

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Competitors Evolution Fresh (Starbucks) Odwalla Naked Juices Raw Bar Whole Foods The New Leaf Café

ENVIROMENTAL SCANNING:

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Customizable juicing experience

High end in store experience

Farm fresh fruits and vegetables

Friendly and knowledgeable employees

Never frozen

Made to order

CORE COMPETENCIES:

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Women ages 18-35

Health conscious

Willing to pay for freshness, quality, and friendly service

Quick and convenient

Looking for a healthy snack or meal replacement

Cleansing or weight loss

TARGET MARKET:

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ORDER WINNERS & COMPETITIVE PRIORITIES:

ORDER WINNERS COMPETITIVE PRIORITIES Healthy Fresh (never frozen) Customization and variety Fast and convenient Great Taste

High quality Flexibility Speed

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Continuous Stock Maintenance

Efficient Ordering Process

Customer Involvement: High

Resource Flexibility: Moderate

Capital Intensity: Low for Brick & Mortar

LEAN OPERATIONS:

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QUALITY STRATEGY: TQM

PART TWO: IMPLEMENTATION

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QUALITY CONTROL :

Input Control Systems:– Choice of Supplier– Input Inspections

Product/Service Control Systems:– Employee Training– Customer Surveys/Mystery Shopping– Variable Control Charts: x-bar and r charts

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SUPPLIER DECISION PROCESS:

5 Reasons for a large one-stop-shop supplier:1. Established Quality Control & Reputation2. Constant Access to Seasonal & Exotic Fruits3. Economies of Scale4. Customer Support5. Allows us to Focus on our Other Operations

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SUPPLIER :

$44 BN in sales and 425k customers

A diverse selection of ingredients and ancillary supplies

Various auxiliary customer services

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INVENTORY MANGEMENT SYSTEM :

Rationale for Periodic System:1. Perpetual System will be difficult to implement without

ruining the customer experience2. Periodic checks can be paired with additional Input

Inspections3. A Perpetual System will be unnecessary because we do

not expect industry driven demand spikes

Periodic Inventory Management Summary

Type of Supply Review Periods Safety Stock Levels Ingredients (Perishable) Frequently Low

Other Supplies (Non-Perishable)

Less- Frequently Moderate – High

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DEMAND FORECASTING:

Estimated Orders/Weekday: 80Weekend Factor 15%Estimated Orders/Weekend Day: 92Estimated Orders/ Week 584New Company Factor 10%Estimated Orders/Week for Mainline Squeeze 526 ordersEstimated Orders/ Month for Mainline Squeeze 2,276 orders

New Leaf Café and Raw Bar Employee Estimates

New Company Factor

Comparable Method; Lack True Comparables

Asked the question: “What do you expect a self-standing juice bar on the Mainline to pull in?”

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INPUT DEMAND FORECASTING:

STEP 1:Convert

Order/Week to fluid ounces to account for different cup

sizes

Step 2:Convert

Order/Week in Fluid Ounces to

pounds

Step 3:Forecast demand

for each proprietary drink

Step 4: Estimate each ingredient's

breakdown as % Mass of Final Product for

each proprietary drink

526

Ord

ers/

Wee

k

Inpu

t dem

and

in lb

s.survey weights survey weightsdensity proxy recipes

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FINAL DEMAND INPUTS:

Input Weekly Input Demand Forecast Apple 76 lbs. Beet 65 lbs. Carrot 58 lbs. Celery 103 lbs. Cucumber 69 lbs. Kale 76 lbs. Lemon 15 lbs. Lime 7 lbs. Mango 60 lbs. Spinach 33 lbs. Agave Nectar 300 fl.oz. Aloe Shot, E3 Live 338 fl.oz. Cayenne Pepper, Cinnamon, Mint 37 g. Wheat Grass 296 fl.oz. Whey, Hemp 901 g. Small Cups 169 cups Medium Cups 225 cups Large Cups 131 cups Straws 526 straws

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MENU:

12 oz. $5 16 oz. $6 20 oz. $7

Cold Pressed JuicesCleanse  cucumber, celery, kale, apple, lemon

Detoxkale, cucumber, beets, lemon

Immune Boost kale, celery, carrots, lime

Burn spinach, celery, beet, apple

Jump Start apple, mango, carrot, spinach, lemon

Hydrationspinach, celery, cucumber, mango, lemon, lime

Customize Your JuiceChoose your favorite 4 ingredients from our selection of fresh fruits and vegetables including*: Apple, beet, carrot, celery, cucumberKale, lemon, lime, mango, spinach

*Each additional ingredient $1

Add:Agave nectar, cayenne pepper, cinnamon, or mintAloe shot, E3 Live $3Wheat Grass $3Protein, Hemp, Whey $1

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FIXED COSTS:

Start Up Costs Food Related Cost Non-Food Related Cost Prep Line $ 5,000 Cleaning Supplies $ 500 Blenders & Juicers $ 1,900 Trash Bins $ 150 Refrigerator $ 3,000 Interior Design $ 5,000 Ice Maker $ 2,500 Tables $ 1,000 Utensils $ 250 Chairs $ 1,400 Sub-Total $12,650.00 Register $ 100

Promotional Materials $ 500 Posters & Decoration $ 1,000 Trays, Napkins, Utensils $ 500 City Licenses $ 500 Menu Board $ 150 Sub-Total $10,800.00

Grand Total $21,600.00

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OPERATING COSTS:

Annual Fixed Costs Monthly Variable Costs Insurance Expense $ 4,800 Salaries $ 7,200 Rent $ 39,000 Food & Supplies $ 5,690 Maintenance $ 2,000 Electricity $ 400 Internet $ 360 Natural Gas (Heat) $ 113 Cleaning Supplies $ 1,000 Water $ 500 Total $47,160.00 Total $14,703.00

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QUESTIONS: