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Logistic management dominos


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Logistic management dominos

  1. 1. DOMINO'S PIZZA INDIA LTD. Domino's Pizza India Ltd. was incorporated in March 1995 as the master franchisee for India and Nepal, of Domino's Pizza International Inc., of USA. Moreover, the company holds the master franchisee rights for Sri Lanka and Bangladesh through its wholly owned subsidiary. Mr. Shyam S. Bhartia and Mr. Hari S. Bhartia of the Jubilant Organosys Group (formerly, the Vam Organic Group) were the promoters of the company. Since inception, Domino's Pizza India Ltd. has proceeded to become one of the largest and fastest growing international food chains in South Asia. The first Domino's Pizza store in India opened in January 1996, at New Delhi. Today, Domino's Pizza India has grown into a countrywide network of over 125 outlets in 30 cities and is the leader in the fast food delivery segment. Ever since it was established, Domino's Pizza India has maintained its position of market leadership with its constant product innovation and maintenance of stringent service standards. More importantly, it has established a reputation for being a home delivery specialist capable of delivering its pizzas within 30 minutes to its community of loyal customers from its entire chain of stores around the country. Customers can order their pizzas by calling a single countrywide Hunger Helpline - 1600-111-123. In fact, Domino's was the first one to start this facility for its customers. Domino's vision is focused on "Exceptional people on a mission to be the best pizza delivery company in the world! ". Domino's is committed to bringing fun and excitement to the lives of its customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all its strategies are aimed at fulfilling this commitment towards its large and ever-growing customer base. Thus, time and again Domino's has been innovating toppings suitable to the taste buds of the local populace and these have been very well accepted by the Indian market.
  2. 2. MARKET SHARE Dominos intends to penetrate the markets completely by opening up 20-25 outlets per year in the country. Dominos has a young and enthusiastic team of over 1,500 employees. It has outlets more than any other corporation in the business of food, not just the pizza business. Branded pizza market stands at about Rs 275 to 325 crore. Today, Dominos has emerged as the leader in the fast food segment with about 65% of market share of pizza delivery in India But if you look at the total market, that is delivery plus dining plus takeaway, it would have a 40 per cent market share.” DOMINO'S PIZZA INDIA LTD. - LOGISTICS The entire country has been divided into 4 regions- Northern region, Western region, Eastern Region &Southern region Each region has a Domino's control centre. This center handles the procurement of raw materials and supplying them to the various outlets within their regional jurisdiction. Such a center is called a 'Commissary'. Therefore Domino's has 4 commissaries across India. They are located at the following places: Northern region - Delhi Western region - Mumbai Eastern Region - Calcutta Southern region- Banglore My efforts revolve around the Northern & Western Commissary because Domino's logistics starts off with the supply and storage of raw materials at the Northern Commissary located at New Delhi from where the materials are supplied to different parts of the country. Also Mumbai lies within the jurisdiction of western commissary. The logistics of Domino's has been broken up into the following parts for analysis: COMMISSARY LEVEL OPERATIONS 1. Procurement & Supply Of Raw Materials 2. Warehousing & Storage 3. Stock Keeping 4. Dough preparation process OUTLET LEVEL OPERATIONS 1. Storage of raw materials 2. Customer Order 3. The Production Process-How Is A Pizza Made?
  3. 3. 4. Packaging Process 5. The Pizza Delivery Process- From A Franchisee Outlet To The Customer's Doorstep COMMISSARY LEVEL OPERATIONS 1. PROCUREMENT & SUPPLY OF RAW MATERIALS Domino's has rolled out its own logistics model in order to suit its needs. This logistics plan starts off with the supply and storage of raw materials at the Northern Commissary located at New Delhi. It begins right from the point Domino's buys wheat for making the dough required for pizza bases. Here's how: Domino's first decides procurement strategy for its key raw materials: wheat, baby corn, tomatoes and spices (for regular ingredients like onions, each commissary sources and processes locally). For instance, wheat is the cheapest at Jalandhar's wholesale markets. Its refrigerated trucks then get the wheat back to the commissary in Delhi, which handles the processing of the wheat and prepares the flour. Now to get to Jalandhar, the trucks would have to go through Chandigarh, or at least, pass close to it. With its cosmopolitan population, Chandigarh is clearly a potential market for Domino's products. It has, therefore, opened an outlet there. The cost of entry is low because there is no additional transportation cost incurred in shipping products. That's the first thumb rule: "Wherever there is a potential market which falls on the route between the commissary in Delhi and its prime sourcing base Jalandhar, Domino's will open an outlet". So, if there is no major deviation from its route plan, Domino's costs then automatically get apportioned across many more outlets. The same logic is extended to Shimla. From Chandigarh, Shimla is just a three-hour drive away with a large market, especially in the tourist season. And on the way back to Delhi, the trucks pick up cheese from Karnal, a town on the Chandigarh-Delhi highway. This cheese is transported to its commissaries across the country. Domino's logistics system is based on a simple precept -- backhauling. Earlier, if it had to open an outlet in Jalandhar, the commissary in Delhi would send all the raw material in processed form to Jalandhar. But the truck would have to return empty on its way back. Now with the new system, Domino's is able to leverage its fleet much better. The accompanying infographic (table1) explains how Domino's new hub-and-spoke model will work. There are two hubs in the northern region -- the commissary in Delhi and the principal sourcing area in Jalandhar. The spokes are Shimla and Chandigarh. Now, how does Domino's stand to gain? There are three obvious benefits: • Lower transportation costs • Cheaper procurement • Economies of scale.
  4. 4. It's already cut out the duplication in procurement and processing of the raw materials across each of the three commissaries. The old model of self-contained commissaries had another disadvantage: adding new outlets did not translate into greater economies of scale. Now key task is to extend the same clustering approach to the western, southern and eastern parts of the country. In each case, the commissaries typically located near the largest market in that region. Their rollout began only when they mapped out the procurement strategy. Based on the agricultural map of India, Domino's is looking for the best product at the lowest cost. By that logic, tomatoes will come from Bhubaneshwar, spices from the south, baby corn from Nepal (where it's 40% cheaper) and exotic vegetables from Sri Lanka. Similarly, Domino's Indian operations are already being extended to Nepal, Sri Lanka and Dhaka. It is also establishing a commissary in Sri Lanka. Identifying speciality crops in each region also has strategic implications for Domino's. It allows the commissary in a region to specialise in processing a particular crop. For instance, the commissary for the eastern region in Calcutta will be responsible for buying tomatoes, processing them and then sending them to all the other commissaries. Similarly, the northern commissary will send out the flour. This way, not only does it cut out duplication, the dangers of perishability are also minimised. With the new cluster model formalised, Dominos is using its fleet of 25 refrigerated trucks (the number will be increased to 100 in the next five years) to transport products for other companies on the same route. For instance, if an operator in Kochi needs to transport specialty cheese, he can use the Domino's fleet to ship his products. DOMINO'S REGIONAL COMMISSORIES & PROCUREMENT CENTRES FOR RAW MATERIALS (table 1) Wheat Jalandhar (Punjab) Cheese Karnal, Haryana Tomatoes Bhubaneshwar, Orissa Spice South India
  5. 5. Baby Corn Nepal Exotic Vegetables Sri Lanka Pepperoni Australia Jalapeno Spain MOVEMENT OF RAW MATERIALS - NORTHERN COMMISSARY (DELHI)
  6. 6. PROCUREMENT & SUPPLY OF RAW MATERIALS: WESTERN COMMISSARY This effort was focused at understanding the inflow & outflow of raw materials pertaining to the western commissary located at Mumbai. Postal Address Of The Commissary: - Domino's Pizza India Ltd. Junction Of Western Express Highway Ghodbunder Road Versave, Thane, Maharashtra – 401104 LIST OF THE MAJOR RAW MATERIALS PROCURED: Item Name Place Of Procurement Average Order Qty* Frequency Of Order Flour New Bombay 10 Tonnes 3 Times/ Month Gluten New Bombay 5-6 Tonnes 3 Times/ Month Sauce Amritsar 9 Tonnes 2 Times/ Month Chicken Pune 1 to 1&1/2 Tonnes 4 Times/Month
  7. 7. *The figures depicting the quantity of raw materials ordered are approximate estimates and are subject to fluctuations due to various reasons. THE RAW MATERIALS PROCURED ARE DISTRIBUTED IN THE FOLLOWING MANNER: Mode Of Distribution-Trucks No. Of Branches Covered By The Western Commissary-36 Total No. Of Trucks Used-5 Location No. Of Branches Frequency Of Distribution Transportation Mode No. Of vehicles used Mumbai 23 1 Time/ 2days Refrigerated Trucks 2 Pune 5 1 Time/ 3days -Do- 1 Goa 3 1 Time/ Week -Do- 1 Ahmedabad 5 1 Time/ 3 Days -Do- 1 PROCUREMENT & SUPPLY OF RAW MATERIALS: WESTERN COMMISSORY (MUMBAI) AMRITSAR NEW BOMBAY PUNE MUMBAI AHMEDABAD GOA
  8. 8. Western Commissary (Mumbai) Delivery destination Supply Center DELIVERY TRUCKS The delivery trucks have been specifically designed for the purpose of distributing perishable raw materials over long distances. They are fully equipped with cold-storage facilities and temperature control devices to ensure proper storage and handling of good and avoid losses during transit. 2. WAREHOUSING & STORAGE The functions of warehousing are carried out at commissary level. All the commissaries have a warehousing facility. These warehouses act as centers for inflow and outflow of goods. The major warehousing facilities belonging to Domino's Pizza India Ltd. are located at:
  9. 9. • Delhi • Mumbai • Bangalore • Kolkata (Calcutta) Primary Functions Of The Warehousing Facility: A Domino's Pizza Distribution (DPD) warehouse has the main responsibility to load, unload and move materials within or near the distribution center. • Examine and verify load sheets and dough maps • Pull product for loading using company load sheets • Strip, sanitize and pre-cool trailers in preparation for loading • Receive products according to standards • Clean up work area • Maintain proper documentation The warehouses are well equipped with the following mechanisms to store the raw materials safely and minimize storage losses: - • Cold Storage • Refrigerated Racks • Pellets
  10. 10. 3. STOCK KEEPING Being in the food industry, stock keeping and management plays an extremely role. Domino's realizes the importance of the function and makes its best efforts to maintain an ideal level of stock. For the purpose of stock keeping all the regional commissaries make use of ERP package – BAN. It allows them to perform the following functions: • Keeping a track of the existing level of stock • Maintaining smooth inflow and outflow of goods • Demand forecasting 4. GENERIC PROCESS FLOWCHART OF DOUGH PREPARATION The process of dough preparation is also carried out at the commissary level. The process can be represented as follows: Flour Yeast Oil + Gluten + Salts Calcium Propio nate Emulsifying Agent DOUGH PREPERATION PROCESS
  11. 11. DOMINO'S FRANCHISEE OUTLET LOGISTICS ANALYSIS Name Of The Franchisee: - Mr. Ali Bharadwaj Postal Address Of The Franchisee Outlet: Domino's Pizza India Ltd. Shop No.3/4, Kohinoor Veer Savarkar Road Prabhadevi Mumbai-400025 Store Manager- Mr. Azim Siddiqui Frequency Of Delivery – 1 time/day Delivery Timings: Truck Check In Time- 1.00 to 1.15 A.M. Truck Check Out Time- 1.20 to 1.35 A.M. Main Raw Material Delivered: Folding Batching Finished Dough Kneading Sheeting & Cutting Counting Finished Prod PackagingTo The Warehouse/ Transport Facility OPERATION-POST DOUGH PREPERATION Cooling
  12. 12. • Dough • Spices • Cheese • Vegetables • Chicken Storage Of Delivered Raw Materials: All the raw materials supplied to the outlet are stored in the Storage Assembly. The assembly consists of equipments and devices specifically designed for the storage and preservation of perishable food items. It consists of the following: DEVICE R.M. PRESERVED Refrigerated Cabin With Racks • Chicken • Vegetables • Cheese Pre-Heated Oven • Dough • Certain spices Order Placement By A Customer
  13. 13. When a customer calls up at the Domino's Outlet and places his order, the receptionist asks for the customer's name and telephone number. This number is then fed into a computer loaded with telephone directory software. This allows the outlet to know the exact address of the customer to whom the pizza is supposed to be delivered. This entire process takes around 1 minute. Once the order is received, it is forwarded to the 'Make Line' in the kitchen department where the actual production process takes place. How Is The Pizza Made?
  15. 15. Pizza packaging plays an important part in ensuring the quality of the product on which the success of the business is based. Retaining heat and dispersing steam are the chief features of Domino's pizza packaging. Packing of the pizza done at the outlet for delivery to the customer consists of 2 parts: - a) The Pizza Box b) Hotwave Bag a) The Pizza Box Although a pizza box can be made of most any material — e.g. Plastic and molded paper pulp — paper has generally been the material of choice for most pizza box concepts, for following three reasons. • It is economical • Substantial stacking strength or crush resistant • Resists condensation build-up on the interior surfaces Basic Model: - Material characteristics: - The packaging for a pizza plays an important part in the marketing of the business: it carries the company's distinctive logo, and it also carries the product on which the success of the business is based. Protecting the product, retaining heat and dispersing steam are the chief functional features of Domino's pizza packaging. Packaging and the environment is clearly also a concern of Domino's. More than 80% of the corrugated board used in their pizza boxes is made from recycled paper. The
  16. 16. remainder is sourced from sustainable forests. The company encourages its customers to recycle their box packaging. Paperboard is basically a single sheet of very thick paper. It comes in many forms having various attributes. Common examples include chipboard and solid bleached sulfate, or SBS, board. The original pizza packaging was made of paperboard, and some pizza boxes still are today. The main advantage of paperboard is that it's cheap. Like paperboard, corrugated board also comes in many forms. The most common is single wallboard, also known as double face board. It's what's used for most pizza boxes. It consists of two outer sheets of flat paper, called facings or liners, glued to a fluted, or corrugated, inner sheet, called medium. The paper used for the facing or liner is called linerboard. The paper used for the medium is called medium. When only one facing is glued to a medium the resulting product is called single face board. Corrugated board can be imparted with various characteristics. This is achieved through varying the type and thickness of paper used in making the board. In addition, the application of coatings or treatments can further impart unique attributes. This includes moisture-resistance, grease-resistance, and fire-resistance, among other things. b) Domino's Heatwave Bag Domino's HeatWave delivery bags contain a patented disc that is pre-heated electrically. This innovation, combined with the bag's 3M Thinsulate lining and water-repellent nylon exterior, keeps the pizza hot during delivery. These bags come insulated and uninsulated, and will generally keep hot pizza hot for about 30– 45 minutes. This type of bag is almost always in two parts - A core and a bag. The cores are either powered by AC current from an outlet, DC current from a car cigarette lighter or both. Domino's uses a magnetic induction system to heat their bags, removing the power cords (and the risk of banging the cord around) from the bag. WHAT IS THE TIME DEADLINE FOLLOWED FOR THE VARIOUS OPERATIONS?
  17. 17. The entire operation from taking the customer order to packing a freshly made pizza runs on a 11 minute schedule ACTIVITY TIME TAKEN (in minutes) Order Placement 1 Pizza Making 1 Oven-Time 6 Quality Check 1 Packing 1 Sealing & Exit 2 DELIVERY PROCESS: The Domino’s Pizza Ltd. is known for its 30-minute home delivery model. The company proudly calls itself "The Pizza Delivery Experts" Total Time Taken 11 Minutes
  18. 18. Mode of Delivery - Motor Bikes No. Of Motor Bikes – 26 Area under the jurisdiction of Domino's Prabhadevi Outlet The franchisee outlet located at Prabhadevi caters to the customers within the western region of Dadar-Prabhadevi-Worli belt. Once the pizza has been packed and sealed, the delivery boy decides the route that he will follow for the pizza delivery and confirm the order one last time. The moment he is leaving, the delivery boy shouts the out-of-the-door time. Which is normally between 10- 12 minutes after the order placement by the customer. Then everybody yells out 'drive safe'. When he returns he punches the time in. At the end of the day the average delivery time for all his orders is checked. This helps the manager figure out which orders were not delivered in time. The next day the store manager calls each one of those whose orders got delayed and apologises. WORLIDADAR PRABHADEVI