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.
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. - LOGISTICSThe 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. 2. 3. 4. Procurement
& Supply Of Raw Materials Warehousing & Storage Stock
Keeping Dough preparation process
OUTLET LEVEL OPERATIONS 1. 2. 3. 4. Storage of raw materials
Customer Order The Production Process-How Is A Pizza Made?
Packaging Process
5. The Pizza Delivery Process- From A Franchisee Outlet To The
Customer's Doorstep COMMISSARY LEVEL OPERATIONSPROCUREMENT &
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.
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 Cheese Tomatoes Spice Baby Corn Exotic Vegetables
Pepperoni Jalapeno
Jalandhar (Punjab) Karnal, Haryana Bhubaneshwar, Orissa South
India Nepal Sri Lanka Australia Spain
MOVEMENT OF RAW MATERIALS - NORTHERN COMMISSARY (DELHI)
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 Flour Gluten Sauce Chicken Place Of Procurement New Bombay New
Bombay Amritsar Pune Average Order Qty* Frequency Of Order 10
Tonnes 5-6 Tonnes 9 Tonnes 1 to 1&1/2 Tonnes 3 Times/ Month 3
Times/ Month 2 Times/ Month 4 Times/Month
*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 Branche s 23 5 3 5 Frequency Of Distribution 1
Time/ 2days 1 Time/ 3days 1 Time/ Week 1 Time/ 3 Days Transportati
on Mode Refrigerated Trucks -Do-Do-DoNo. Of vehicles used 2 1 1
1
Mumbai Pune Goa Ahmedabad
PROCUREMENT & SUPPLY OF RAW MATERIALS: WESTERN COMMISSORY
(MUMBAI)
AMRITSAR
AHMEDABAD MUMBAI NEW BOMBAY
GOA
PUNE
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.
1. 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: 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
2. 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
3. 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:
DOUGH PREPERATION PROCESSFlour Oil + Gluten + Salts Yeast
Folding Finished Dough Emulsifying Agent Calcium Propio nate
Kneading
Batching
OPERATION-POST DOUGH PREPERATIONSheeting & Cutting
Cooling
Counting
Finished Prod
To The Warehouse/ Transport Facility
Packagin g
DOMINO'S FRANCHISEE OUTLET LOGISTICS ANALYSISName 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 SiddiquiFrequency 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:
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 Refrigerated Cabin With Racks
R.M. PRESERVED Chicken Vegetables Cheese Dough Certain spices
Pre-Heated Oven
Order Placement By A Customer
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?
GENERIC PROCESS FLOWCHART OF PIZZA PREPARATION:
MAKE LINE Order Placement RECEPTION DESK KITCHEN AREA Dough
Cutting
Arrangement Of Topping & Cheese
Baking
Finished Pizza
CUT TABLE Cutting The Pizza Into Equal Slices
OUTSTAND Packing & Sealing
FINISHED PRODUCT
PACKAGING OF THE PIZZA - MATERIAL & PROPERTIES OF THE
PACKING MATERIAL
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
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?
The entire operation from taking the customer order to packing a
freshly made pizza runs on a 11 minute schedule
ACTIVITY Order Placement Pizza Making Oven-Time Quality Check
Packing Sealing & Exit
TIME TAKEN (in minutes) 1 1 6 1 1 2
Total Time Taken 11 Minutes
DELIVERY PROCESS:The Dominos Pizza Ltd. is known for its
30-minute home delivery model. The company proudly calls itself
"The Pizza Delivery Experts"
Mode of Delivery - Motor Bikes No. Of Motor Bikes 26 Area under
the jurisdiction of Domino's Prabhadevi Outlet PRABHADEVI WORLI
DADAR
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 1012
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.