CHAPTER III
RESEARCH MATERIAL & METHODOLOGY
As the title of the Thesis mentions the researcher embarked on the study prompted by a desire to
find out what areas should a fast foods business man concentrate on to deliver customer
satisfaction. There obviously would be several pointers to the issue. But the researcher based on
past professional and work experience felt that supply chain dynamics played a definite role in
bringing about efficiency in many business, and fast foods would be no exception. Hence the
researcher chose the topic of role of supply chain efficiency in enhancing customer satisfaction
in fast foods business.
Customer satisfaction is an area, that has a lot of complexity. What may satisfy one customer
may not hold true for another one. Even for a particular customer the satisfaction parameters and
levels may change time to time. In case of fast foods outlets the offering is a combination of
tangible products comprising the food items served. This would comprise not only the main food
items but also may have with it accompanying materials comprising the cold or hot beverages,
sauces and fillings as well as fresh vegetables and salads. The taste, freshness, preparations,
temperature conditions all would have a role to play in delivering customer satisfaction. Even the
level of garnishing, levels of spice and conditioners all would have a role to play.
Adding to this the price of the product may also have a significant role to play in the process.
While some may like a cheap product there may be others who would look down upon cheap
priced items, making a mental association of cheap items with substandard products. Just
because the item is cheap may not appeal to certain individuals who may be very finicky about
quality.
Fast foods being a service customers would also look at issues beyond the usual four elements of
the marketing mix viz. product, price, place, and promotion, and which are people, processes,
and physical evidence. The product in this case being fast foods which means a quick service
meal, the price would have that much influence as price can have in case of impulse purchases.
Hence in terms of customer expectations and satisfaction levels, the marketer would have to look
at the areas of processes, people, and physical evidence. Some one looking for a meal would
necessarily expect to have the locale and surroundings clean and inviting. If minimum standards
of hygiene are not met every possibility exists of the customer shying away from the outlet. This
being a hygiene factor a study was felt necessary as to which could be the motivating factors that
could ensure customer delight. It was obvious that in case of a food outlet issues concerned with
supply chain would definitely play a very decisive role.
Objectives
1. This study was undertaken to examine in details the role of supply chain management in the
proper functioning of large fast food outlets in the Mumbai Metropolitan area.
2. It was also to study in detail the supply chain processes deployed by large fast food outlets.
3. The study would establish customer satisfaction parameters in large fast food outlets in the
city of Mumbai.
4. The study would configure yard sticks for evaluating efficient supply chain functioning.
5. The study would find linkages between efficient supply chain functions and customer
satisfaction at fast food outlets.
6. The findings would have value for large fast food entrepreneurs in their supply chain
strategy formulations.
7. The study would also document separate ways of managing supply chains by different
players.
This would serve as a model guide for large fast food business operators.
Hypothesis
Based on above objectives, the researcher proposed the following hypothesis:
H1 Efficient Supply Chain Management in large Fast Food outlets ensures enhanced customer
satisfaction.
H2 Inefficient Supply Chain Management in large fast Food outlets results in customer
dissatisfaction.
In case fast foods outlets which had efficient supply chain management were to be termed A and
fast foods which did not have efficient supply chain management B, then the study would have
to establish that there would be significant difference between A and B as far as customer
satisfaction was concerned.
Methodology
Based on the above objectives, the researcher decided to approach the study from the following
angles:
A detailed review of articles in the field of marketing, touching upon consumer behavior and
customer satisfaction, would give insights into aspects that influence customer delights.
Simultaneous review of literature and articles in areas of supply chain management, would give
clarity on aspects of logistics and supply chain management which fast foods outlets could
concentrate upon for better supply chain management.
The study was based partly on secondary research, through literature survey, collation of data
available on the internet, published papers dealing on the subject, and lay publications viz. news
papers and magazines. The other part viz. Primary research was carried out covering fast foods
outlets as well as customers of fast foods outlets.
The research philosophy was to study how successful fast foods outlets run their supply chains.
This could be done by meeting up with such outlets, observing their functioning, talking and
discussing with their officials and from that drawing up conclusions. Apart from the running and
administration of the supply chains these fast foods outlets also ensure that customers
patronizing their outlets obtain overall satisfaction. How they look after those aspects also was
observed by the researcher.
Sampling & sample size
Estimated universe of large fast food outlets in Mumbai Metropolitan was pegged at around
ninety. (http://yellowpages.sulekha.com/fast-food-restaurants_mumbai) Out of this a sample
of 10% ie. 9 large fast food outlets were studied, in terms of their supply chain processes and
practices. These outlets were visited by the researcher, and observational research was carried
out. The times of visit were altered to ensure capturing of operations at different times of the day,
so that the study could bring out data that were not influenced by similar timing.
As to research covering customers, convenience sampling was used. The sample was picked
from representative target consumers. While circulating questionnaires to prospective
respondents, randomness was ensured by having male, female, different age groups ranging
between 18 years and 50 years, in the respondent groups.
To decide on the sample size the researcher looked at two parameters viz. margin of error, to
establish confidence intervals and also confidence levels. Margin of error is the positive and
negative deviation one allows on the survey results for a sample. This in other words is the
deviation between the opinions of the respondents and the opinion of the entire population.
For example if 90 % of the survey respondents give an opinion then a 5% margin of error would
mean that one can be sure that between 85% (90% - 5%) and 95% (90% + 5%) of the entire
population would give the same opinion. Confidence level would indicate how often the
percentage of the population that gave the opinion would actually lie within the boundaries of the
margin of error. Thus at a 95% confidence level one can say that 95% of time the populations
opinion would be within 85% and 95% of the same opinion as given by the sample surveyed.
Table No. 3.1: A typical sample size calculator would be
Population
size
Confidence level 95% Confidence level 99%
Margin of error Margin of error
5% 2.5% 1% 5% 2.5% 1%
1000 278 606 906 399 727 943
10000 370 1332 4899 622 2098 6239
100000 383 1513 8762 659 2585 14227
500000 384 1532 9423 663 2640 16055
1000000 384 1534 9512 663 2647 16317
Source: Didier Dierckx
So with a 5% margin of error and at 95% confidence level, the researcher gathered responses
from three hundred and eighteen respondents and analyzed the same. To understand customer
satisfaction parameters, two focused group discussions were held on the basis of a mixed lot of
large fast food out let customers. A questionnaire was prepared on the basis of focused group
discussions and 300 odd customer responses were obtained. Customer responses were pertaining
to all fast food outlets which they might have patronized in the recent past. In the questionnaire
they were given names of 27 fast foods joints about which they were to comment on two
parameters. One was about their rating each of the outlet in terms of performance on parameters
indicative of good supply chain practices, and the other was about their recording of satisfaction
levels experienced at that particular fast foods outlet, patronized by them. Linkages of efficiency
or inefficiency in the supply chain and customer satisfaction or otherwise were thus established.
Scope & Limitations
Scope of study
The study covered large fast food outlets. Large fast food outlets were those who had more than
one out let in the Mumbai metropolitan area. They might have take away as well as seating and
eating in facility.
Limitations of research project
Small fast food outlets including road side vendors were not part of the study.
Utility of the research project
The research would contribute to knowledge base in the area of supply chain management.
Management students would understand the role of supply chain management in the
enhancement of customer satisfaction levels. Practitioners would also benefit from the findings,
to use resources and budgets for successful implementation of supply chain management
initiatives, in the fast foods industry. The research would also open up scope for further research
in related issues, like amending supply chain processes to improve customer experiences in the
fast food category.
Profile of Fast Foods outlets selected for study in Mumbai
Now coming to Mumbai, one can say that in terms of fast foods consumption Mumbai has come
a long way. Mumbai and its people have developed a taste for fast foods. Even though one may
call it unhealthy, one may call it unhygienic, and one may even claim to avoid it, but fast food in
a fast city like Mumbai is almost unavoidable. In terms of variety fast foods may range from the
samosa one picks up at a joint when hungry, or the batata vadas vended openly at street corners,
or french fries one relishes as a snack at a little upmarket stall, all of these constitute the fast food
chains in the city.
A city like Mumbai is brimming with buying power and people with selective lifestyles. News
papers carry articles regarding eating habits of Mumbai populace be they adults or children.
There are instances of school going kids who simply hate home cooked foods. They would like
to gorge on burgers and noodles every time they feel like eating and to top it all they would
wash the same down with some cola based soft drink.
The Associated Chamber of Commerce and Industry of India has gone on record stating that the
food habits of people in most of the metropolitan areas has undergone a sea change. Rise in
income accompanied by both of the spouses working and therefore having irregular home return
times, all the members are becoming dependent on out of home eating. Availability of numerous
food joints nearby is only fuelling further this propensity to patronize fast foods joints. So it can
be reasonably successfully predicted that urban population will remain and continue to be the
largest consumers of processed foods because of their ever growing income levels and changing
lifestyle. These attractions have grown in intensity because the customers’ habits and eating
ways have also changed radically.
Most of the population comprising people who work for a living, and living in cities in nuclear
units, find the proliferation of fats foods joints actually a blessing as it allows them to cut on their
energy, costs and save time as well. Some of the fast food which may come under the ready to
cook category also help them to save time that was earlier required to prepare and cook , and so
give them the benefit of time on hand for other works. The marketers of such fast and ready to
cook foods also have developed the art to make foods of the customers’ choice.
Any occasion some one talks of fast foods the picture that comes to mind is only French fries,
burgers of different kinds, and sodas and milk shakes. But of late an increased awareness about
nutritional values in food and consciousness about the harmful effect of common fast foods
customers are leaning towards low calorie, low fat, and light to eat items. Today fast foods are no
longer limited to French fries and burgers alone. They are also catering items which are
reasonably high on health quotient.
While the general intake and patronage of fast foods are on the ascent and more so when the
younger generation are concerned a simultaneous concern about the not so healthy repercussions
due to excessive intake of such foods is also raising its head. At times fast foods such as ham
burgers, and other traditional items such as vada pav, samosas, fried potatoes and chicken are not
very good for health, because not only are they steeped in saturated fats and trans fats, but at the
same time they lack any semblance of fibre not to speak of vitamins or for that matter mineral
supplements.
The net effect of such consumptions are that they build up fat deposits around the waist line and
clog the heart flowing arteries and other tubes through which the heart is supplied blood with low
density lipo proteins. These in turn result in several maladies which currently are termed broadly
as life style maladies viz. blood sugar problems, blood pressure problems, cardio vascular
diseases, and mere overweight problems. The disturbing trend is that these symptoms are now a
days manifesting even in young children some times not older than six to seven years.
In order to ascertain what factors may contribute to customer delight in an Indian fast foods
outlet, 5 focus group discussions were conducted, amongst target group of fast foods outlets
customers.
The constituents of these focus groups ranged between 7 and 10 personnel per group.
Selection of constituents was on basis of convenience, but representation was given to males and
females, and the age group was kept between around 15 years and around 50 years, bearing in
mind the fact that personnel below the lower limit and above the upper limit, may not be making
decisions regarding choice of outlets very independently on their own.
Some of the comments captured during the focus group discussions were:
1. “The food of the fast food restaurant should be hygienic and fresh. Restaurant should not
serve food which is stale or which they have purchased long time back.”
2. 2.“The food items need to be safe for consumption. It should not happen that when we
consume the food, we fall ill. The food should be of good quality”.
3. “The surroundings of the joint needs to be clean”.
4. “If the place is dirty or looks unhygienic people would not like to visit the fast food joint.
Dirty place gives a feeling of unhygienic food as well”.
5. “The food that is served should be tasty. If the food is not tasty then people will not prefer to
go there”.
6. “The fast food joint should provide a good variety of food items on their menu. If there are
very limited food items then people will prefer a place which offers a wider variety of food
items”.
7. “The food should not be very expensive. It should be affordable enough to buy or else they
will prefer other food joints”.
8. “The ambience of the place should be good. If the place is too loud or noisy then people will
not prefer it”
9. “The waiters should be friendly and kind to the customers”
10. “The service should be quick. They should take as minimum a time as possible to serve them
and complete their orders”.
11. “All the food items on the menu should be served at any time to the customer, for a customer
it is very frustrating to hear that the item that they ordered is not available today or cannot be
served because it’s over”.
12. “The seating arrangements should be comfortable, the chairs or couches should be
comfortable so that customers can enjoy their food comfortably”.
13. “The fast food joint should play some good music which would add to the great mood while
enjoying the food”.
14. “The place should not be too crowded”
15. “There should be no waiting time to get a seat”.
16. Based on the above a list of a few of the identified attributes that decide the level of customer
satisfaction in a fast foods outlet were :
1) Freshness
2) Taste
3) Variety in menu
4) All time availability of all items on the menu
5) Promptness in service
6) Ambience
7) Friendly approach in service to customers
8) Food should not be very costly – price should have a parity with the offering
9) Quantity per serve
10) Cuisine
A few other factors which were mentioned were :
11) Parking facility
12) Happy hours
13) Crowd at location
14) Reservation facility
15) Size of family that could be accommodated at a time
These attributes were grouped into
1. External Factors
2. Internal Factors
1. Some of the external factors were:
1) Increase in disposable income levels
2) Population Growth
3) Changing lifestyle
4) Standardization of taste and quality
5) Rise in BPO culture
6) Urbanization and globalization
2. Some of the internal factors which drove the sales, on the other hand were:
1) Served fresh and hot
2) Standardization of taste and menu throughout the nation
3) Quickly served
4) Clean and hygienic
5) Standardization of ingredients used for cooking.
6) Most of the items on the menu were available till the end of the day.
7) Happy meals with toys for kids.
8) Facility of celebrating birthday parties.
Of the above internal factors the two factors which were highly influenced by supply chain
management were:
1. Standardization of ingredients used for cooking.
2. Most of the items on the menu are available till the end of the day.
The reasons being Suppliers had to be very particular about the quality and standardization of the
product that they supplied to the fast foods outlet, since these products were used as ingredients
in making the food that was served at the outlets.
Any change in the quality of the products supplied would directly influence the food taste and
quality. As most customers came to the outlet considering the fact that they knew how the food
would taste, maintaining such taste and quality was very critical for the business. Thus all
ingredients that were supplied should be fresh and should meet the quality checks and standards.
Maintaining the stock of these ingredients was also an important part of the business. Since the
outlets as a standard service should ensure that all items on the menu were available throughout
the day till the shop closed, maintaining the stock levels was a major task to be managed. And
meeting such orders and demand on time by the suppliers became mission critical. It directly
affected the reputation of the outlet, and thus ensuring that they deliver the required quantity
within the promised time was of utmost importance.
At this point a study was made to capture the supply chain strategies adopted by some of
the reputed fast foods outlets. The study was conducted in Mumbai.
Study of their organization, their strategies and methods
Some of the popular fast food joints in Mumbai are: KFC, Subway, McDonalds, Candies,
Domino’s Pizza, Papa John’s, Smokin Joe’s, Tibbs Frankie.
The researcher studied a majority of these stores in detail.
1.McDonalds:
1. McDonalds Corporation is by far the WorldMarketLeader in the QSR area(QuickService Restaurant).
2. Headquartered in the UnitedStates it serves around sixtymillion customers on a dailybasis across ahundred
nineteencountries through over thirtyfive thousand outlets. The companybegan operations in 1940 as a
barbecque restaurant operatedbyRichard and MauriceMcDonald and in about eight years time they
reorganized their business asa hamburger servingputlet usingproduction line principles in their operations.
3. A majorpartof their business theyoperate on Franchiseebasis.About seventyfive percent of theirbusiness
theyoperate through thismode. Whileprimarilytheyconcentrateon hamburgers, cheeseburgers, chicken
burgers, French fries, softdrinks andmilkshakes, changingdemand patterns havemade them diversifyinto
salads, fish, smoothies andevn fruits.
4. McDonalds employs about amillion anda halfof employees across the world McDonalds earns revenue not
onlythrough runningrestaurantsbut it also makes a lotofmoneythrough investments in properties as well as
through franchisingoutlets.
McDonalds’ CorporateStrategy can besummed up as QSC & V:
1. Quality 2. Service 3. Cleanliness and 4. D Value
McDonald’s India operations started with their opening of their first outlet at vasant Lok in Delhi
in October 1996. It was also the first McDonalds outlet in the world which did not serve beef or
pork. It’s Indian entry was through joint ventures with Connaught Plaza restaurants in North &
East India, and with HardCastle Restaurants for West and South India. The chain had to contend
with areas of concern in the Indian consumers mind as to how they were preparing the burgers
offering the cheapest burgers was not an easy task. Besides preparing totally vegetarian
items was also a challenge. Additionally they also had to change items in order to cater to the
distinct separate taste of the Indian customers. Wide ranging products such as McAloo Tikki,
McVeggie, nuggets atal had to be introduced to cater to the distinct taste of the Indian consumer.
McDonalds Supply Chain
The researcher studied in detail the supply chain of McDonalds: It was observed that
1. McDonald’s Supply chain is based on the three-legged stool concept :
2. Company – Franchisees – Suppliers Logistics
3. they normally had 100 sales items in the restaurant
4. they were having 400 SKUs in the warehouse
5. they had 200 restaurants per Distribution Centres (~180 DCs globally)
6. their delivery frequency: was approx. 3 times/week, higher in urban areas
7. their vehicles had about two to three stops per route
8. they had Exclusive distributors (3PL)
9. they had a very strong quality focus (Cold Chain, HACCP,QIP)
The main suppliers of McDonalds were
1. Dynamix Dairy Industries (Supplier of Cheese)
1) they had a fully automatic international standard processing facility.
2) they operated a network of milk collection centres equipped with bulk coolers.
3) they had a dedicated quality program.
4) they also had a dedicated Research & Development centre
2. Trikaya Agriculture (Supplier of Iceberg Lettuce)
1) they operated a specialized nursery with a team of agricultural experts
2) they used Drip and sprinkler irrigation in raisedfarm beds with fertilizer mixing plant.
3) Their pack house, pre-cooling and coldroom were located at the farms itself to ensure no
delay in supplies
3. Vista Processed Foods(Supplier of Chicken and Vegetable Products)
1) they had world class infrastructure and support services.
2) they had separate processing lines for chicken and vegetable foods.
3) they operated Hi-tech refrigeration plants for manufacture of frozen food at temperatures
as low as -35⁰CMcDonald’s distribution setup was through RadhaKrishna Foodland Limited who
1. Specialized in providing services
2. they also carried out procurement qualityinspection,storage, inventory management, deliveries
data collection, recording and reporting
3. they had dry and cold storage facility Transportation trucks maintained at 22⁰ C
4. they implemented ERP software
Supply Chain Integration of McDonalds:
Figure 3.1. Flow diagram of McDonalds’ supply chain
Source: through website by researcher
Study of the supply chain practices of McDonalds reveals that there are some very unique
practices adopted by this chain which others can emulate for better efficiency. This chain is
spread across so many countries (over a hundred) and they manage over thirty thousand fast
foods outlets such a wide spread of locations. Besides they ensure a very high standard of
customer expectations in areas of cleanliness, hygiene, taste consistency and speed of delivery.
Much of this obviously is the credit of the way they manage their entire operations. In India too
they are spread across more than forty cities and have over two hundred fifty outlets.
The unique feature of their supply chain is that they outsource majority of their operations. Some
of the theories of operations management such as lean manufacturing, multi layered supply
chain, hub and spoke model are widely used by them. The researcher found that they invest a lot
in training their staff and give high priority to their front level staff being good and efficient in
their jobs. In the process they also rely on a hierarchy which is well defined and roles and
responsibilities are clear.
When McDonalds sought to open in India, one of the first issues they had to address was
cultural and religious issues connected with menu and ingredients. Different ethnic groups had
different preferences and at times taboos, which had to be respected. This would bring a lot of
pressure in standardization of menus, and consequent inventory management of ingredients. This
apart there also lay a huge problem in terms of extremely weak and patchy logistics back ups
existing in the country. So the organization devised a supply chain system that was tiered in its
approach and composition.
They created a tier I supplier group. This group was responsible for supplying products which
went into plates like French fries, potato wedges, vegetable and chicken patties, et al. now these
tier I suppliers were procuring their raw materials from another lot of suppliers who would form
the tier II group. They comprised the agricultural and animal husbandry producers who would be
supplying the raw materials such as lettuce, potato, chicken, coating ingredients and such other
items that were required by the tier I suppliers. With McDonalds controlling both these tiers of
suppliers they could ensure quality was delivered across the supply chain.
McDonalds have also invested in sprucing up the logistics support infrastructure, by arranging
either through ownership or dedicated contractual arrangement special refrigerated trucks which
transport materials from the tier II suppliers to the Tier I suppliers and also from them to the
outlets or central distribution centers under well regulated and maintained temperature
conditions.
Another feature of McDonald’s supply chain system is their ensuring that most of the truck
movements are not unidirectional but also carry back freight. This practice of reverse logistics
being factored in ensures better utilization of freight. To carry out this process effectively they
use cartons, trays, jars that can be refilled, and recycled. They also have strategically located
distribution centers across the country. For the north they have a distribution center at Noida.
Mumbai distribution center caters to the Mumbai and western region. Similarly they have a
distribution center at Kolkata and one in Bangaluru. They very well use the classical hub and
spoke model, the distribution centers acting as hubs which take care of outlets around them. A
few of their important suppliers are Dynamix for cheese and dairy products, Jain Foods for
dehydrated onions, Iceburg & Trikaya for lettuce, Vista foods for chicken patties, Kiran foods,
Riverdale, Cremica for buns, , Radhakrishnan Foodlands, McCain Foods , Amalgam Foods for
fish fillets, AlKabeer for mutton patties. These have already been stated above.
McDonalds ensures consistency in quality by strict adherence to quality standards. The onus on
maintenance of quality is put on the suppliers. They try to bind the discharge of quality
responsibility of the suppliers with satisfaction of customers. Hence if customers are not satisfied
the onus lies on the suppliers. This effectively puts the suppliers on a strict quality regimen.
McDonalds also leverages on water quality management practices of their beverage partner
CocaCola to have their own staff trained in maintaining water quality across the chain.
The researcher also found that McDonalds normally tries to stick to one supplier for one product,
and not have multiple suppliers for similar products. This has two big benefits. The supply
consistency is maintained and this is very critical in food items if taste standards have to be
maintained. The other benefit is the supplier also gives in its best to maintain status. Of course
for this process to be successful, the supplier must be chosen only after due rigorous audit. A
look at average McDonald’s menu will make it clear that they normally offer something like
thirty to thirty five items at their outlets. The offerings however come in various combinations.
They further have complexity in terms of combinations in the meals offered, such as small,
medium, large, and other such variations. These add to the pressure of stock keeping and
inventory levels. McDonalds outsourced its distribution to an outside party viz. Radhakrishna
Foodlands who manage the distribution centers. They control on the overall the truck movements
across the country. They are responsible for on time delivery. Obviously this activity requires a
lot of control over documentations. These may include invoices, delivery and dispatch
documents. Records have also to be kept properly. McDonalds has in turn set up several key
performance indicators through which it can keep track on performance of its service provider.
The factors on which they are assessed are administrative efficiency, total number of cases
managed per man hour, warehouse efficiency, overtime as a percentage of total man hours
worked, in transportation number of cases handled per trip, and overall truck utilization in terms
of capacity and mileage.
In areas of cold chain transportation, there would be different items which would require
different temperature ranges. Some products may be requiring - 18˚ some - 25˚ and others that
may just have to be transported chilled. Products would also be of types which need
transportation at just ambient temperatures. So the transporter ahs to make modifications to suit
the requirements. A particular innovative feature of McDonalds transport vehicles is that they
have side doors which enable unloading and loading of materials without disturbing the order
across the entire truck.
Another unique feature of McDonalds’ supply chain was their orientation towards a pull based
model rather than a push based one. It was replenishment oriented rather than allocation oriented.
A collaborative plan sharing basis of indenting ensures that suppliers are aware in advance of
future requirements on a very transparent mode. This helps them to in turn plan their production
and procurement. In operations a concept known as Make to Order MTO, is generally adopted
here which ensures minimum investment in manufactured inventory. Asking concerned staff the
researcher came to know that the suppliers in most of the cases were able to achieve a near 99%
fill rate.
Another unique feature of the McDonald’s supply chain method was their demand forecasting
system. Named 31Q, of which 3 stands for three years, the period the fast foods chain would
keep checking it’s plans, which normally would mean a rolling plan period, 1 standing for the
immediate next year period, for which detailed forecast is to be made, and again during this one
year period, quarterly breakups would be tracked, denoted by Q of the 31Q method. In this
exercise the suppliers are involved and hence are aware of the entire plan process. Thus there is
total transparency and collaboration cum sharing of information across the supply chain, which
in turn brings about so much of seamless integration across the process.
Individual outlets usually give a three days’ to a week’s advance notice to the distribution centers
for materials required. The Distribution Centers while catering to these requirements, raise a
three months’ rolling indent on the suppliers, and thus the chain is geared up to cater to demands
on a more or less real time basis. With over two hundred and fifty outlets spread all over the
country the other critical aspect that the system has to cope with is on time delivery. The lead
times are planned and maintained with rigor, because delays could jeopardize the efficiency of
delivery, which in turn could adversely affect the supply chain parameter of availability of all
items at all times, as well as the speed of service. Hence the supply chain system needs to ensure
that the outlets get to know the exact time of delivery of each item indented. Hence the
distribution centers need to work backwards to integrate the flow of indents, supply, and
information. The chain is known to keep a maximum of ten days inventory in the system, which
in turn can achieve a thirty six times turn around of inventory.
All the above are achieved with a complete control over the quality and adherence to food safety
requirements. Hazard analysis critical control point HACCP in short, certification is adhered to
and this in turn ensures the quality of food items which maintains quality. HACCP is an accepted
industry level certification process. McDonalds also has some in house methods to maintain and
ensure quality of food. Named supplier quality management systems SQMS and distributor
quality maintenance program DQMP these are two in house methods used by McDonalds to
ensure food quality safety standards. The first one viz SQMS is a worldwide McDonalds system
which is mandatory for adherence by their suppliers across all places. Apart from HACCP
standards this also incorporates some of McDonalds’ own methods and practices. The DQMS
applies mostly to the operations of the chains’ distribution centers. McDonalds also has team of
in house auditors to monitor and control implementations.
Taste is the next factor on which the organization keeps a close watch. To maintain and
effectively improve delivery on this requirement the chain has a very advanced sensory program
in place. For the Asia Pacific region their central control point is located in Hong Kong. Sensory
experts are trained here. The experts are sourced from the suppliers’ as well as the quality
assurance teams. At the source itself namely at the producers and suppliers plants the outputs are
tested and rated by a sensory team member. The food item is also given a grade. The scoring has
a cut off and those scoring above are only allowed out of the plant. This is also followed up by
cursory checks at the outlets, on a surprise random basis. At half yearly or quarterly periods
management teams carry out a product tasting exercise at suppliers’ locations, when they may
fry, taste and allot scores to products and ingredients. This ensures maintenance of consistency
and high quality. Besides all the above the chain also has a system of picking random samples
from outlets and getting the saem tested at the laboratory in Hong Kong.
All the above is driven by a very robust SAP based ERP system. They also have some other
systems which are integrated to offer a seamless smooth flow of information. These systems help
in maintaining high visibility of operations across the entire chain, automated replenishment
orders, progress of sales, and tracking inventory on a real time basis. The organization has
leveraged the best of many disciplines to give it a cutting edge over competition, and enhance
customer satisfaction through the best of processes and systems. .
Domino’s Pizza:
Domino’s Pizza is an American restaurant chain, which specializes in franchisee based pizza
delivery operations. It is headquartered at the Domino Farms Office Park in Ann Arbor chartered
township, Michigan US. Founded in 1960 it is the second largest pizza outlet chain in US.
Domino’s introduced a slew of innovative and novel marketing concepts in 2007 and 2008,
including franchising arrangements, mobile ordering and tracking systems. It also reinvented the
type of pizzas that the outlet served, improving the taste and formats. Hiring a new CEO it
improved its sales significantly in 2010. In 2012 Domino’s Pizza removed the word Pizza from
its name logo, to emphasize it’s foray into non Pizza business.
Domino’s experimentation with the assured delivery within thirty minutes ran into some
problems due to delivery boys getting into street accidents and settling consequent lawsuits. So
in 2007 the company introduced a new slogan “ypu got 30 minutes” which alluded to the earlier
slogan but stopped short of promising delivery within 30 minutes or refunding amounts and or
delivering the pizza free. However the company continues to offer the thirty minutes guarantee
in Colombia, India, Vietnam & Turkey. India has become the largest international Pizza market
for Domino’s outside it’s home market. In India the franchise is run by Jubilant Food Works. In
India the company had to adapt to local tastes by way of chicken tikka masala, kima dopyaza,
which inturn the company has also adopted internationally.
Supply Chain of Domino’s
The chain’s procurement process for Raw Materials is highly organized.
Raw materials like wheat, baby corn, tomatoes and spices are got, out of which wheat was
bought in from Jalandhar and then sent to the commissaries in refrigerated trucks.
They have four commissaries which are Regional Centralized Facilities. These are located at
Delhi, Bangalore, Kolkata, and Mumbai
After procurement the chain’s distribution system is organized as under:
The Pizza dough processed from the wheat is sent to the retail outlets again in refrigerated
trucks. The organization also takes care of the logistics requirement for sending frozen foods, at
a temperature of minus 18⁰C. In case of prepared foods the same are sent in refrigerated trucks
that maintain temperature range of between 1 to4⁰C.
Figure 3.2. Flow diagram of Domino’s supply chainDomino’s Supply Chain of Domino’s
Source: through website by the researcher
In early 2000, when Domino’s in India, wanted to inject more capital into its operations, through
investments from bankers as well as even a planned IPO, the chain was advised to ramp up its
operations. This in turn needed a re look at its supply chain activities, involving the entire gamut
of sourcing raw materials to transporting them to central locations for processing, to delivering
Wheat
Dough
Warehouse
Refrigerated Trucks
Retail Outlet
them to customers. Upto that point Domino’s model was a relatively simple one. It operated on
the basis of three bases which procured and sold groceries and such items. These were located in
Mumbai, Bangalore, and New Delhi. These units procured their own wheat, tomatoes, and other
ingredients on their own, processed them and delivered to outlets in refrigerated trucks. However
this model would have to be changed to cope with increased pressure of volume.
In case of Domino’s the supply chain played a more critical role as their offering being more
home delivery oriented transportation and handling costs played a very important role in overall
costs and profitability. Because Domino’s was more of a home delivery based model, it’s
dependence was more on transport rather than in locations. It also had to have in place a very
efficient back up system to take orders on call and route them properly. When Domino’s was
looking at revamping its’ supply chain management system, it could definitely look at
McDonald’s model but in terms of operational procedures and spread there were fundamental
differences between the two. Because of location spread differences centralization which could
work for McDonalds could not work that smoothly for Domino’s. So Domino’s decided to
concentrate on centralized procurement of wheat, maize, corn, tomatoes, and spices. Since wheat
was cheapest in Punjab and adjoining areas the chain concentrated on procurement there and
transportation to the Delhi processing center in refrigerated vehicles to make the dough for it’s
pizza bread. The dough thereafter would be dispatched to the outlets in refrigerated vehicles. The
chain invested in maintaining regulated temperatures in the refrigerated vans to ensure that the
dough retained proper consistency when being transported across different distances depending
on the outlets’ locations. A method adopted and perfected by them was that the dough after
receipt would have to be consumed within three days. The condition was such controlled that if
the dough was not consumed within the three days the balance would have to be discarded. What
Domino’s did was that if they found the trucks had to pass important cities en route they opened
outlets there so that the transportation would happen without incurring extra costs. Thus since the
dough trucks had to pass Chandigarh while on its way between Delhi and Jallandher, they
opened outlets at Chandigarh. This was a logic for their scaling up of operations.
Many fast foods outlets at times adopt pricing strategies keeping in tune with market demands
and customer expectations. So one may see an outlet trying aggressively to build market share by
adopting a penetration pricing on the main item and making up on the margins on other side
items. Here the logic is that the price conscious consumers who at any time form the bulk of the
customer base need to be wooed on a constant basis and for them the lower price platform may
work very effectively. The fringe customers who by and large may not be that price conscious
may be given other benefits and not only obtained through lower prices. Some times the fast
foods outlets may deliberately keep high ticket items to attract niche customers. Since price
competition is very acute in the quick service restaurant category, pricing has to be adopted with
caution and also must be accompanied with regular follow ups. While pricing by itself is a
differentiation parameter in foods category, in fast foods outlets study has shown that the issues
covered under supply chain management play a more crucial role in the whole matter. Whenever
they resort to special categories and offers where they carry out a strategy of making different
margins in separate food items the role of the supply chain becomes even more demanding.
Availability of the separate ingredients in adequate quantities to deliver the entire product mix
assumes even more significance. One can easily see that in McDonalds there is always an
emphasis to sell more of potato fries and cold drinks along with their value meals. Similarly one
would observe Pizza centers trying to sell more of garlic breads and wedges along with value
meal pizzas.
When one looks at supply chains one observes that the process of procurement involves
balancing and getting an answer to the mix of demand and supply cum sourcing of commodities
and items required to carry on the day to day business. Due to demand pressure and rising costs
of sourcing the suppliers are mostly asking for increased prices for items required by fast foods
outlets. The fast foods outlets on their turn are also most of the times not in a position to drive
hard bargains. At the same time the outlets are not very easily able to pass on the rising costs to
the customers. Herein therefore comes the criticality of the supply chain management efforts.
In this balancing act one would come across proponents of centralized procurements where in
they can drive economies of bulk buying, whereas there may be others who do not subscribe to
this theory, and would like to depend more on close to outlets sourcing which could ensure better
management. Some times the issue of reducing carbon footprints through movement of foods
over long distances could also affect decision process. Freshness and local tastes could also be
influencers in such decision factoring.
Subways the chain of sandwiches follows a method where under orders are placed every
Tuesdays and are received every Fridays, at their central depots. Each outlet places it’s order to
the central call center in such a way that these orders are routed to the central location and from
there supplies are made by bike supported delivery boys. The outlets are supplied on a
replenishment basis on a real time basis. Some outlets also dispense with central locations for
certain items altogether. Local procurement of sauces and such items are quite common.
At times these fast foods outlets may also adopt aggressive expansion plans even during periods
of slow downs. The motivation might be hopes of having real estates across the country and
capitalize on a future upturn and having a head start over competition. This may sometimes be
the reason why fast foods chains are planning to spread across tier II cities in a big way.
Quick service stores will come to depend heavily on efficient procurement strategies. Uncertain
and extremely fluctuating raw material prices are any procurement manager’s biggest headache.
Apart from rate fluctuations, inflation also is a big spoilsport. Lack of good quality common
infrastructure compounds the matter further. Every where the available common infrastructure
are either of a low order or are not maintained properly. Firms can upto a point invest and
improve infrastructure but overhauling major infrastructures are extremely costly. In this context
local sourcing and procurement assumes a lot of significance. Thus local vendors start assuming
a significant important role in the whole system. The researcher earlier in the chapter had
elaborated about McDonalds structuring their procurement on a multi layered basis. Local
sourcing also has the effect of controlling costs of materials. Many foreign fast foods outlets
operating in India, have realized that adapting to the Indian taste and palate they have to depend
on many locally sourced materials. Innovations in the areas of material contents are also being
carried out by Indian branches of fast foods outlets so that dependence on imported items can be
reduced. Some of the coffee chains have totally changed over to local sourced coffee as
McDonalds have done regarding lettuce.
ERP systems have also helped such outlets to keep track of inventory levels and supplies.
Technology has been always a great enabler of controls and efficiency. Subway has greatly
moved in to e procurements. Fast foods outlets are also realizing that instead of treating vendors
as adversaries, if the level of cooperation and sharing of plans are enhanced it may help all. At
times when any promotional offer gets underway, the vendors are able to fulfill requirements if
they are given access to the plans of the afst foods chain. The fast foods chains on their part are
also realizing that this sharing of plane ultimately helps them only, because then chances of
running out of stocks become less. Hence collaboration is slowly taking precedence over in
house competition. Of course spurts or slacking of actual demands vis a vis planned demands can
still happen but the disruption can be smoothed to very large extent. Here also the outlets are
planning on sharing or inter unit transfer of inventory to mitigate such risks. So procurement
flexibility and multiple supply chain configurations are becoming the order of the day.
Effective vendor management would therefore entail building long term working relations rather
than short term cost cutting and building margins. It is a well known fact that too much of price
squeezing on suppliers often turns counter productive, because the suppliers in turn may adopt
shortchanging tactics to cover losses or reduction in margins. In the end such measure may result
in compromising of quality or other service standards and would definitely adversely affect
customer satisfaction levels. Rather investing in means which may improve efficiency in
consumption parameters and also reduction of wastes may help. Instead of changing vendors
frequently it would help to have long term arrangements based on trust and dependability. Even
as McDonalds has done training vendors people in the ways of the fast foods chain cango a long
way in improving standards of performance. The researcher found that Costa Coffee (though not
included in the current research) had a practice of sharing with their partners like air lines
catering who would serve on board food the actual costs of items like sandwiches and agree to a
predicted commission structure such that all parties are aware about the margin build up and
sharing. This organization have also gone into reduction of costs by indigenously procurements
of paper cups which could end up in massive savings just because of the volumes involved.
Items to be streamlined are selected on the basis of Pareto principle of 80:20.
Moving further Subway has gone in for creating international purchasing cooperatives in various
regions. Being formed into cooperatives they ensure steady supplies and also ensure quality
because of long term ongoing relations. Regional supply chain advisory groups guide such
cooperatives. At times hedging short term procurements with long term procurement
arrangements are also resorted to on order to reduce impacts of fluctuations in supplies demands
as well as prices. Costa coffee has a system of three year long term contract along with short
term six monthly arrangements which keep on updating. These in combination can to a great
extent modify price fluctuations and volatility in the markets. At times in order to reduce
overdependence on single source supply units in some instances may arrange to have tie ups with
more than one supplier in certain ingredients.
The quick service restaurants often follow some broad strategies in their procurement policies
and initiatives. They often selectively pick up a few of the product items on the basis of either
Pareto principle of 80:20 or ABC classification of 10:20:70 and concentrate on those items
which can have a harder impact on profitability than the others. Thus for example in the case of a
chicken serving chain, the chicken, oil, flour, and seasoning may be the key ingredients, whereas
for a pizza outlet the important items may be wheat, flour, cheese and tomatoes. Depending on
the comparative criticality of these items the procurement emphasis may change.
The chains have to periodically reexamine the entire procurement process and flow. While a rise
in basic costs may affect the procurement price, there are several other items that migh also
impact the procurement costs. These are packaging costs, transportation costs, local taxes and
levies, as well as cost of credits. Changing minimum and maximum ordering quantities,
purchases in larger packs or lots, changing frequencies of orders, changing the format of item
like tomato puree instead of tomato sauce, obtaining at centralized location and such other
measures could also have softening effects on price volatility. At times cutting short the supply
chain by buying direct instead of through intermediaries could also play a price softening effect.
Going directly to contract manufacturers by passing the main manufacturer can also reduce
prices. These work particularly where the value chain is long. Negotiating prices with contract
manufacturers can also result in reducing intermediate mark ups and reduce overall cost of
procurement. Outlets should wherever possible realign their product portfolio in line with
procurement price indications. So if there is certainty of procurement price of certain items going
up it might make sense to realign products based on reduced dependence on such items. Lastly it
would make a lot of sense to be keenly observant of price trends on a regular basis. Vigilance
always pays.
Pizza Hut
Pizza Hut is an American restaurant chain and international franchisee who are known
worldwide for their Pizzas and side dishes. In the market the chain is known as Pizza Hut Inc. It
is a subsidiary of Yumi Brands. In 2012 the company had more than six thousand outlets in US
alone. It also had presence in more than ninety countries across the world, serving Pizzas through
over five thousand outlets.
Pizza Hut operates through various formats viz. traditional family style dine in locations, store
front delivery and carry out locations. It also has locations that offer a hybrid model which has a
combination of dine in, carry out and delivery system. Catering Italian theme dishes such as
penne pasta, chicken pomodoro, they also run the Italian Bistro under the Pizza Hut brand name.
Pizza Hut ran into some problems with the authorities in UK over excessive use of salt in their
products. Their pizza toppings were found to have salt much more than average safe prescribed
levels. Pizza Hut has massive expansion plans covering it’s Indian operations.
Pizza Huts direct suppliers include PepsiCo for beverages and Cremica Group for Buns and
bread items. They also list several indirect suppliers. They procure their chicken requirements
from Brazil. In vegetables they source potatoes from Australia. The sauces are procured from
various organizations locally.
When it comes to the distribution they outsource their operations to several parties. Snowman
Frozen Foods is their main provider for cold storage facilities. They have around sixteen
warehouses in the country, supported by a fleet of over a hundred trucks that are equipped with
Carrier and Thermo King Transport temperature control units.
The total cold storage capacity at their disposal is between a hundred and twelve hundred tones.
Pizza Hut banks a lot on communicating the freshness of their pizzas. They have roped in film
personalities to emphasize this point. Pizza crusts to be served fresh creates pressure on the
supply chain operations and the chain has to be very careful in constant monitoring of the same.
One of Pizza Huts uniqueness was that unlike Domino’s where the dough is normally prepared
in a central commissary and distributed to locations, Pizza Hut makes the dough in the outlet
itself most of the time. This ensures the freshness better.
Figure 3.3 Flow diagram of Pizza Hut’s supply chain
Source: through website by researcher
KFC Kentucky Fried Chicken
KFC was originally an initialization of the full name Kentucky Fried Chicken. This chain was in
the beginning only in selling fried chicken based fast foods. It is headquartered in Louisville,
Kentucky, US, and that is how it derived it’s name Kentucky Fried Chicken. It’s the world’s
second largest fast foods chain, only after McDonalds. Operating in around a hundred and twenty
Source: through website by researcher
KFC Kentucky Fried Chicken
KFC was originally an initialization of the full name Kentucky Fried Chicken. This chain was in
the beginning only in selling fried chicken based fast foods. It is headquartered in Louisville,
Kentucky, US, and that is how it derived it’s name Kentucky Fried Chicken. It’s the world’s
second largest fast foods chain, only after McDonalds. Operating in around a hundred and twenty
Source: through website by researcher
KFC Kentucky Fried Chicken
KFC was originally an initialization of the full name Kentucky Fried Chicken. This chain was in
the beginning only in selling fried chicken based fast foods. It is headquartered in Louisville,
Kentucky, US, and that is how it derived it’s name Kentucky Fried Chicken. It’s the world’s
second largest fast foods chain, only after McDonalds. Operating in around a hundred and twenty
countries, and through around twenty thousand outlets. KFC is a subsidiary of the Yum Brand
who also operate Pizza Hut, and Taco Bell.
Harland Sanders an entrepreneur started KFC by selling fried chicken from a roadside stall in
Corbin, Kentucky, immediately after the depression in US. In early fifties Sanders realized the
future potential of opening franchisee operations and gave franchisee rights in Utah. KFC
through popularizing chicken as a fast food, broke the strangle hood of hamburgers in the fast
foods apace. Sanders did another marketing initiative and that was branding himself as “Colonel
Sanders” which transformed him into a part of the American culture and even to this day his
picture is widely used in KFC advertising. But subsequent rapid expansions saw KFC selling
itself to an investor group. In the sixties KFC became one of the first fast foods chain opening up
internationally in UK, Mexico, and Jamaica. It’s expansion continued and in nineteen eighty
seven it was the first American restaurant chain to open it’s operations in China. Today China is
KFC’s largest market.
After opening in India by two thousand thirteen KFC was operating over three hundred and fifty
outlets in the country. Adapting to the Indian palate KFC sells vegetarian chick pea burger,
paneer burger, chicken wings and such items. In it’s Bangalore expansion drive KFC also
introduced vegetarian meals like rice meals wraps, and other side dishes. KFC also uses Indian
spices in most of its dishes to suit customer taste.
Adapting to local requirements KFC launched “So Veg, So Good” menu. However KFC local
management aver that through all this they are not moving away from their core focus of chicken
offerings, but these would only help in strengthening and broadening their customer base in the
country.
In Mumbai their menu includes WOW, snacks, burgers, toasted wraps, box meals, the usual
chicken, group meals, rice bowls and desserts. The chain has had to face some protests as well.
People for ethical treatment of animals have been after KFC regarding their practice of fattening
chicken artificially which is a cruel practice. A continued movement by PETA in Bangalore over
some period did bring about some improvements in the way all the fast foods outlets in India
treated their source of animal meat. KFC’s contention has been that on the whole their being in
the country and serving in the fast foods sector generates a lot of employment in the country,
besides their contention is that they do not directly own the chicken farms but source their
requirements from contractors.
Subway
Subway which writes their name in a stylized way and use as their logo, is again an American
restaurant chain that sells submarine sandwiches (subs). A submarine sandwich derives its name
from the fact that the sandwich is made by using a long bread roll (Italian or French bread) which
is split either into two pieces lengthwise in the middle, or it is opened into a V shape at one side
and the bread roll is stuffed with a variety of fillings be thay meat, cheese, vegetables and other
seasonings. The fillings vary place to place and thus can adapt very easily to local tastes.
This chain is owned and operated by Doctor’s Associates Inc. Subway is one of the fastest
growing fast foods chains in the field. The chain is headquartered in Connecticut. While
submarine sandwiches are their main product, they also sell wraps, salads, and a variety of baked
items. Their items vary according to the countries that they operate in. They set up base in India,
in 2001 via a master franchising, at Delhi. In India Subway do not sell beef and pork, and have a
wide range of vegetarian items on their menu. They operate over four hundred outlets in the
country, and are spread across seventy cities. They even opened all vegetarian counters in
Jalandhar and Ahmedabad. Franchisee models usually operate on a low investment cost basis.
And besides the Subway model is relatively easy to run.
Sales ex Subway outlets are highest at airports because they are large footfall areas and also
because the offerings at Subway outlets are very limited the traffic moves fast. Subway plans to
increase their presence in the country in a large way. They plan to invest in training the
franchisee staff to bring about uniformity in operations. They are aggressively planning to spread
their franchisee base across the tier II & tier III towns.
Candies
This is a purely Mumbai based quick service restaurant, and is further very localized in it’s
operations, having three outlets in Bandra West only. This outlets is known for good taste of the
food it serves. It operates take aways, home delivery as well as sit in dine as well. It primarily
sells on pure value for money with no frills attached. The outlet started operations about thirty
years back. They serve a mixed cuisine of snacks, main courses, desserts and drinks. Their
spread of sandwiches, rolls, salads, and desserts are quite wide and can cater to wide range of
tastes.
The three branches of candies have their individual style and have stamp. Candies @
MacRonells is much like a Portugese villa, with blue and white walls accompanied by winding
steps. One can opt for open sitting in the terrace or in air conditioned rooms. Candies at Bandra
Reclamation is more of a low lit intimate space which is perfect for an early dinner, a leisurely
breakfast or even a cup of coffee at any time. The one at Union Park is just for pickups and carry
away type of food. This joint caters to over a thousand customers per day, and has a variety of
items on offer.
It runs it’s supply chain, on the basis of a close knit operation, it’s main advantage being that the
chain not wide spread , the entire span of control is very manageable.
The chain has a kitchen which occupies six thousand five hundred square feet of area. All food
gets cooked at this one kitchen by a fleet of about a hundred cooks. The operations start early in
the morning and continue till evening. So all the items originate from one central place. The
cooks are organized in a way that individual cooks specialize in some specific dishes only.
Foods are prepared in batches and are sent to counters from morning. The supply chain is so tight
that a just in time type of inventory management is followed. But this is also possible to an
extent because the entire operation is not widespread. Some of their best and fast selling items
are chicken sandwiches, chicken tikka rolls and mini pastries. To ensure constant supplies are
maintained uninterrupted they keep sufficient stocks of inventory of raw materials and
ingredients. The supply chain is very well coordinated and controlled.
Papa John’s
Papa John’s is by and large the fourth largest take away and delivery mode pizza chain in the
US. The chain is headquartered at Jeffersontown Kentucky. The chain was founded in 1983 as a
very small outlet built up from used pizza making equipments. However the pizzas proved so
popular that the outlet started expanding. Though some of the outlets have a sitting place to eat
pizzas Papa John’s model is delivery based. The chain works on franchisee mode, the franchisees
paying a royalty of roughly 5% on sales. Advertisement is also co opted. The chain set up shop
in India in 2006. The chain’s operations in India is carried out by Om Pizza & Eats Pvt Ltd. The
chain boasts of offering better ingredients and hence a better pizza. They claim to deliver dough
fresh to their outlets, the green pepper are store cut to ensure freshness, their pizza sauce is
imported from California, and the meat supplied by them has no fillers. They depend a lot on
their supply chain to ensure customer satisfaction.
Smoking Joe’s:
Smoking Joe’s is a Mumbai based pizzeria which was founded in 1993. Over the years it has
expanded and now operates through over sixty stores located in other cities as well. It mainly
concentrates on Pizzas and Pizza related items. It serves both vegetarian and non vegetarian
items. Garlic breads, open submarine sandwiches, desserts, and salads are items that the chain
sells besides pizzas. Again this chain is able to operate on the basis of a close knit supply chain.
Tibb’s Frankie
This outlet was the brain child of Amarjit Singh Tibb, who during a stopover in Beirut tasted a
local Lebanese preparation made of Pita Bread with liberal stuffing of a variety of fillings, and
decides to come out with Frankie which was to have it’s unique blend of Frankie Masala. After
receiving good reviews from friends and acquaintances Frankie was set up in more outlets in
Mumbai. Tibbs over time became associated with not only good taste but also with value for
money. Now the chain boasts of over 250 outlets across the country. Over the years the chain has
made improvements in its menu, and also varieties. They have over twenty varieties of frankies
and different flavours have also been incorporated. The chain has of late redecorated their outlets
décor, they have introduced new ways of packagings, introduced the home delivery model, and
have also moved abroad.
To generally capture the feelings of customers the researcher has recorded the opinions of a few
customers and they are transcripted below:
One customer male, around 45 years of age above middle class
On my “Eating-Out” experience with fast food restaurants, I must admit that as a couple we do
eat-out regularly at a variety of restaurants and have a mixed bag of experience that ranges from
Very Good to just about OK:
McDonalds: It’s a very good experience but over a period of time it gets monotonous as the
service is very robotic to say the least. You walk-in with a greet and Namaste the traditional
India way of welcoming a guest. That’s where the customer empathy stops. Here on the
customer places his order and the order taker punches in the dish ordered and collects the cash
post which within their prescribed one minute you are served with your dish. As a customer I
find an acceptable seating place, relish my dish which at most times fulfils the taste bud needs
and makes the eat-out at McDonalds a fulfilling experience.
The items on their menu whichever you order are always consistent with taste, quality, and
freshness that leaves a fulfilling feeling at the end of the day. This is also true of whichever
location of McDonalds you choose and whatever time of the day.
On the variety offered on their menu it is seen that over a period of time and number of visits
made, the menu is very restricted and one has no choice but order from same limited choice thus
seeping in a sense of boredom for a palate tickling variety seeking customer.
One of the good developments lately, has been McDonalds has introduced breakfast on their
menu thus increasing their offerings as well as getting in a new set of customers.
Dominos: Is yet again a very good experience particularly when it comes to sitting at home
watching your favorite game and also enjoying a well done very delectable pizza. Dominos have
mastered their delivery standards extremely well such that I have had no instance till date where
my order has been delayed by virtue of which I could have been the beneficiary of a free pizza.
On the other hand as any Indian who loves Indian dishes one can’t have a pizza more than once a
month and this is where the experience with Dominos gets restricted to once a month or at best
twice monthly. Dominos too of late has been reviewing their menu spread and fully
understanding the Indian mentality have of late been increasing their options on the toppings as
also some new dishes. More recently they have also been advertising on TV channels very
aggressively which in some ways does influence customer choice.
Pizza Hut: A fast food restaurant that caters to the Indian palate and which in my view has been
evolving over time. The Pizza’s here are tasty and have a good blend of the Indian spices and
aroma that makes them the first choice Pizza for many customers.
Recently they have added a number of other dishes and in the process have expanded their
offerings in the Indian market. They have a wide choice of meals ranging from Value meals to
Weekend meals to family meals thus making it very convenient and an option of first choice.
Having said this, their service in one of their locations for a sit-in meal was found below
acceptable standards, where there were issues relating to a delayed serving, notwithstanding their
stewards being quite process driven and not understanding customer urgency on being served.
KFC: An OK place to sit and eat. KFC too like Pizza Hut is fine only up to a point where you
can help yourself. If they have to serve you then I don’t see any difference between our Udipi
restaurant and KFC as their expertise lies only with a limited menu range and self service.
My experience with KFC also tells me that it varies from location to location and I had a very
bad experience at their South based outlet wherein they erred on the very order that I had placed
vis-a-vis what they finally served me with. To make matters worse the service staff was quite
adamant that he had served me the right dish as ordered by me but was equally willing to change,
which I found very strange.
Kailash Parbhat: Is one place that I really like. This place gives me a very homely feeling and the
ambience is one that gives a warm touch to the kind of food that is served.
The variety offered on their menu makes it a very inviting place and staff serving the customers
too are quite adapt and very natural in their serving style. The food items are very tasty and have
been very consistent over the years no matter how many generations have gone by. They have a
few branches spread across Mumbai and at most of these locations one does experience a similar
service level with the dish tasting almost the same as at their original location at Colaba.
The staff, the ambience, the aesthetics are all vey Indian and it makes one feel quite at ease
especially when you are out with a family for an eat-out.
DP’s a very locally famous restaurant services a large variety of dishes and serves the college
youth largely. This is because DP’s is situated in the midst of Mumbai’s most popular
educational Institutions namely ICT formerly UDCT, VJTI, Podar & Ruia notwithstanding a
number of schools run by some very old Trusts like IES & St. George.
While the traditional VadaPavs and Misal are very popular at this restaurant, a variety of snacks
like Dosa’s, Idlis and the entire range of Chinese items too are very popular.
The ambience here is very different from a Pizza Hut or Dominos but they have their own charm
and attraction and are very popular with the local crowd. They also have a seating arrangement
outside their enclosed area giving the customers to breathe some fresh air even while having
their favourite dish.
Shivsagar: Have a number of restaurants that serve typically the Indian dishes ranging from the
traditional Idli’s and Dosa’s to the Chinese Bhelpuris which have their own flavour and taste.
Eating at the Shivsagar restaurants does deliver a sense of fulfillment with regard to quality and
content. However one has to compromise on the aesthetics & ambience which are very normal
and not very exciting or inviting to a customer.
The customer base here covers a cross section of people ranging from the youth to the adult,
single walk-ins to a full family, small time entrepreneurs, door-to-door salesmen to the labour
class to who find this ambience and food items attractive to drop by.
Another customer around thurty five years of age, senior executive in a Bank
McDonalds:When my friend visited one of their suburban store he found that their chicken dish
was not the same as KFC where the chicken dishes are more succinct and succulent in taste. He
also found the McSpciy quite good and tasty.
However this friend had a very bad experience with a very poor behaviour from one of their staff
at another location. This person was out with his family and while the restaurant was not
officially closed entry was obstructed by a table that was placed between the doors.
However on request they were allowed in but also told that they had limited service only
available and that only one or two items form the entire menu were available. This was inspite of
the friends mother pointing out to the service staff that more items were available on display and
why they could not entertain their request.
Dominos: My own experience with Dominos has been one which is very interesting and
intriguing.Interesting because no matter which location you go to and I travel a lot PAN India,
and you find the pizza tasting almost the same and the service turnaround being within the
traditional 30 mins.
Intriguing because and I have experienced this on many occasions, that the quantum of the
toppings content varies from store to store as also the person on the job at that moment who is
servicing your order. Equally intriguing is how they manage to deliver within 30mns when most
of su caught in traffic snarls almost at every nook and corner of the city. This probably explains
why of late many customer s have been complaining very bitterly about the delivery TAT of 30
mins where in many cases they have taken anywhere between 60 mins to 180 mins with no
explanation to such a violation of their delivery standards.
I am not sure if others have experienced the above but it will be interesting for the Dominos
Management to take note of the same and if found true address the same on priority as it does
leave behind a very confused customer
Pizza Hut: While the Pizza Hut Pizzas are very famous globally, and in India too, my experience
over the years has not been too comfortable. I have quite a few instances wherein they have
declined having received an order even after the same has been transacted by me, instances
where there has been an unacceptable delay of more than 30 mins with no compensation being
offered even though their services deliverables promise the same.
On checking with my friends they too have had a number of such instances which ultimately
leaves us to go to Pizza hut since your are in love with Pizzas and probably not with Pizza Hut.
KFC: Worldwide has a repute as one of the best places to have chicken nuggets and sliced
chicken pieces notwithstanding their preparation abilities to make it extremely delicious and
mouth watering. Having said that I being an ardent KFC fan have always backed my favourite
KFC for eat-outs. However, it is very disturbing to know that KFC in India has a number of
complaints about late delivery, order not being executed after having taken the same, finger nails
in chicken pieces, in appropriate billing etc that makes one wonder if KFC follows double
standards.
It will be interesting and noteworthy for KFC management to take note of all such customer
complaints and not only address the same immediately but also revert to the customer concerned
so as to seek a good word of mouth and customer recovery process since such dissatisfied
customers will never return once they leave with a bad opinion.
A few more customer reviews:
1. I visited the Mulund West Station Branch of McDonalds. I found their food to be quite fresh.
My favorite happens to be the Filet O’ Fish. I found that their customer service is very good. The
staff is very well mannered and serves customers quickly.
2. Just last week, I visited the McCafe at R City Ghatkopar. I ordered a Chicken McGrill which
was fried to perfection and served with nicely toasted buns, tomatoes and mint sauces. Another
thing I love at McD is the coke float which is a mix of dairy fresh vanilla icecream and Coca
Cola. I find McD to be a good restaurant for the whole family with hygenic food and good
service with a good value for money. The entire experience was awesome.
3. Mcdonalds or McD as everyone calls it, is a fun loving place where you can hang out with
your friends. Me and my friends, always arrange a meet up at a nearby McDonalds. I think that
they are the real king of burgers in India and they serve some awesome burgers and french fries
and the restaurant is not heavy on the pockets. As I am vegetarian, I can only comment on the
veg burgers and I think that they are delicious. It is perfect for a quick bite if you are in a hurry
as well as good to sit for some time if you want to hang out. The ambience and décor are good.
They play birthday songs if you are celebrating birthdays. Sometimes the staff is arrogant and I
have observed that they are arrogant if there is a lot of rush in the restaurant. So I feel that the
staff should be properly trained to handle people during rush hours. The washrooms should also
improve in terms of space if possible. I have found the washrooms to be quite congested.
4. Mcdonalds drive thru is a convenient way of picking up food on a trip. I have tried the drive
thru at Panvel, just before the Mumbai – Pune Expressway. I found the staff to be very nice and
helpful and I was pleasantly surprised to see that the prices were really quite reasonable. I only
wish that McDonalds gives options of non aerated drinks with the meals. They don’t normally
encourage it. I also found some of the french fries to be a bit stale. But overall it was a pretty
decent experience.
5. I’d wanted to try out the McDonald’s Breakfast for quite a long time. I finally managed to give
it a try this weekend with a friend who is a bigger foodie than I am. McDonalds serves breakfast
at some outlets in Mumbai between 7am and 11 am. I visted the one at Phoenix Mills, Lower
Parel. We managed to try many things on the menu, which isn’t very vast, but quite interesting.
My friend had the non-vegetarian meal and I tried the vegetarian meal. Both included a cup of
piping hot, surprisingly good coffee, a serving of hash browns and a McMuffin. I had the Veg
Supreme McMuffin and my friend had the Sausage McMuffin with Egg. Both were very tasty.
The hash browns were delicious and hot but were very oily. We also tried the Hot Cakes with
Syrup and Butter. These were also quite good. They also serve hot chocolate at breakfast, but
they refuse to swap that with coffee if you get the meal. I also found that the lady at the counter
refused the swap. Maybe if there was someone else they would. They also serve hot chocolate at
breakfast, but they refuse to swap that with coffee, if you’re getting the platter.
Breakfast at McDonalds is quick, fun and relatively cheap. But it is not very healthy. You can try
it once in a while but it is not very healthy in the long run.
The above are given as a support of the details which were followed by the researcher in
capturing the essence of the fats foods business.
Some of the popular food items
Figure 3.4 Sandwiches high in calories
Source : healthmeup.com photogallery
As a result people have now started talking of Healthy Fast Foods Some examples of healthy fast
foods could be:Vegetable burgers that are made from whole wheat and that too baked and not
fried. In these instances the bun is prepared using whole wheat and not the usual flour or maida.
Due to this ingredient the fibre content goes up substantially. In usual burgers the filler patty is
fried and that too deep fried to make it more tasty. But here instead of frying the patty the same
is baked and which ensures that the amount of fats is avoided.The ingredients for the patty is also
different vegetables such as beans, peas, beet root, to the maximum extent possible, and may be a
little amount of carrots and potatoes. To make the offering more appealing spinach, coriander
and mint leaves can be added. Some additional healthy fillings between the bun and the patty
such as tomatoes, cucumber, lettuce, grated carrot and such items can also be used. All these help
in not only making the burger more appealing, but also adds to the healthy aspect by taking care
of increasing the healthy fibre, nutrient, and vitamins, and simultaneously reducing the harmful
elements such as fat and trans fats. Also making sure that the fat and oil portion is kept to the
minimum, the use of butter and cheese can be minimised. All these go to make a very nutritious
and health boosting vegetable burger.
Figure 3.5. Whole wheat baked Non Veg Burger
Source: healthmeup.com photo gallery
At times people would like to have a non-vegetarian fast food and yet want to remain healthy.
In such instances, the server can use bread or bun made of whole wheat in place of the usual
flour or maida, and for the patty minced chicken along with vegetables can substitute for the
regular meat based ingredients. These will ensure that the serving is at the same time appealing
to the taste and palate, at the same time it will also be a very healthy chicken burger. A majority
of the population would not come out in public to say that they are fond of fast foods and yet that
is the fact. Under such circumstances one has to find easy ways to deliver fast foods that are
cheap and filling and also high on taste factor.
Figure 3.6 Sandwiches
Source: healthmeup.com photo gallery
In order to make a pizza that is tasty and at the same time healthy one may make some changes
in the pita bread foundation for the pizza. Normally this pizza base is made of flour and that too
super refined. This can easily be replaced by whole wheat. For the material to be put on the top
several vegetable alternatives such as spinach made into a puree, capsicum parts along with
sliced tomatoes, onions of course along with corn, carrots, beet root, olives, can be used.
Health being a foremost issue raking the minds of customers the researcher felt that giving a list
and description of some such food choices would enable both servers and consumers.
More such items can and are continuously researched and experimented upon Customers are
getting more and more discerning and choosy in their requirements. So a traditional approach
based merely convenience, taste, and price may not hold good for long.
Figure 3.7 Whole wheat veg pizzaas
Source: healthmeup.com photo gallery
Further if the pizza is not topped up with cheese and other such fattening agents then the
resultant pizza will not only be healthy but also full of natural nutrients. It will have vitamins,
anti oxidants, minerals and of course a lot of fibre. What more can one want?
Figure 3.8 Baked samosas
Source: healthme up.com photo gallery
Normally items like samosas are deep fried. But instead of that if one was to bake the samosas
the process would help in reducing the calories, and at the same time a very good as well as full
of health snacking item. For the outer cover within which the stuffing will be present, flour can
be easily replaced by whole wheat. Inside one can use a healthy mix of vegetables such as peas,
carrot, potato but which is boiled instead of fried. Thus while maintaining the taste and aroma the
food is kept light and hence the consumer can avoid the pitfalls of a high calorie and fatty snack.
It is important to have an eye for such adaptation because in the long run consumers health is
also a matter fo concern for the vendor. In today’s market when consumers are more aware about
health aspects this is very important.
Figure 3.9 Baked cutlets
Source: healthmeup.com photo gallery
If one was to bake cutlets in place of having them fried the result would be a healthier option.
Baking would reduce the calories content because this food would on the whole have lesser fat
content and at the same time maintain the quantum of fibres, vitamins and other nutrients as the
stuffing would have vegetables comprising carrots, peas, french beans, potatoes, beetroot, etc.
Minced or cery finely shredded chicken could be added for the non-vegetarians. French fries are
known all over the world. But instead of making them with salt and excessive fats, they can also
be made in a more healthy way just by baking the potato chips and avoiding addition of fat and
excess salt. As an alternative the same can be served with tomato ketchup.
Figure 3.10 Baked potato chips
Source: healthmeup.com photogallery
Figure 3.11 Grilled roasted chicken
Source: healthmeup.com photogallery
As a very likable non vegetarian snack fried chicken is a very common snack food item served
at all major fast food joints. In this case a healthier option would be to roast or grill the chicken
after trimming all the fat from it, and then preparing the snack.
Usually when people take packed lunches or tiffins they go in for sandwiches which are very
easy to make. It can be made filling tasty and healthy by following a few easy procedures such as
avoiding use of fats and butter, and including good nutritious vegetables such as leafy ones,
cucumber, tomatoes, onions and such items. A well made sandwich can even serve as a dinner
item.
Figure 3.12. Whole Wheat Veg. sandwiches
Source: healthmeup.com photogallery
The same sandwich can be made healthy and wholesome if it is prepared using whole wheat
bread slices instead of normal bread slices. Thereafter the fillings can be with vegetables such as
tomatoes, cucumber, capsicum, grated carrot, beetroot, lettuce etc. by applying only a dash of
butter one can cut down the calories. Those who are non vegetarian or egg eaters, sliced and
minced boiled eggs along with a dash of mayonnaise can serve the purpose of making it a
healthy egg sandwich.
Figure 3.13 Pav bhaji
Source: healthme.com photogallery
This Indian popular fast food uses a a bread bun which is called pav to be eaten with a vegetable
based curry which has some gravy. In this case also to make the snack healthy and nutritious one
can have the pav made of whole wheat instead of flour and for the curry combination use
vegetables that are leafy and nutritious and also have it prepared with as minimum quantity of
oils and fats. Boiling instead of frying the vegetable mix would ensure that fat contents are kept
at a minimum.
Usually with most of the fast foods an accompanying drink of choice is cola based. Now these
are not only practically of no nutritional value, they at the same time add to the calorie intake.
Instead of this an alternate drink can be fruit smoothies which can be made by blending some
fresh fruit with ice crushed into a base along with some syrup made from honey or dairy item.
The smoothie can be also laced with chocolates or peanut butter to add to the taste. Since they
have some fruits and other ingredients to add body, they are rich in fibre to some extent. Much
like a milk shake they also have more consistency and will be thicker than any plain cola drink.
To make it even more tasty and attractive to all age groups yogurt, ice creams can also be added.
They give more supplements like protein, vitamins, and nutrients. Fruits such as bananas,
papaya, guava, apples, chicku, custard apples, can add to the body, whereas citrus fruits,
pineapples as well as different berries such as rasp berry, gooseberry, straw berry can add to
flavour and taste as well as variety. They can with slight adaptation be served round the year,
cold and chilled in summer, plain in winter.
Figure 3.14 Fruit smoothies
*Images courtesy: © Thinkstock photos/ Getty Images (20)
Based on above studies the researcher found out that fast foods outlets must take into cognizance
not only taste factors but also matters pertaining to health, nutrition, packaging, logistics overall
costs, water, hygiene, as well as energy consumption. The outlets have to train their officials to
be observant and proactive in terms of making improvements in all related areas. Computer
applications, efficient use of information technology have to be stressed. One may also have to
keep an eye towards development of society as well.
Food matters in life. It is the source of sustenance, nutrition, and also of good health. As has bee
stated above changes in living conditions are greatly influencing modern lifestyles. Dearth of
time and space has increased the dependence on items that are fast and quick. Hectic lifestyles
are increasingly making people adopt ways of life that may be fast and quick in short term, but
over a period of time become counter productive. In this background the researcher listed above
a list of food items which can be a via media of both fast quick, tasty, and at the same time not
rich in items and ingredients which can affect the health adversely. As a matter of fact the
researcher would suggest that fast foods outlets progressively adopt such food items which
would on the one hand cater to customers’ taste and at the same time ensure that their health are
not unduly compromised.
While visiting outlets and gathering observations, the researcher found a basic trait in the
behavior. The more involved a buyer has to be in a buying process, the incidence and level of
post purchase anxiety is lower as in comparison to purchases which were more dictated by
impulse, when the thinking about the purchase continued. Now fast foods were in the category of
high impulse purchases and hence buyers’ level of post purchase dissonance was bound to be
high. The outlets had to be careful that in all their messages and staff interactions with customers
a level of reassurance about the quality of food was maintained.
Because cognitive dissonance could be a high possibility in case of fast foods business, the
researcher felt (based on earlier relevant article reviews) improving the emotional intelligence
quotient of the sales personnel at the outlets might help in improvement of customer satisfaction.
This might involve the fast foods joints probing methods and means to improve the emotional
intelligence parameters of the staff who serve the customers. Demonstrating to counter staff how
improved emotional intelligence levels can increase customer satisfaction levels would make
such efforts more acceptable. During visits to these fast foods outlets the researcher found
that on many occasions the outlets offered discounts either by way off limited period price off, or
at times on a continuous basis where the customers could collect such points somewhat like a
loyalty program. Generally customers were attracted towards offers which were arranged around
specific products or services rather than general offers. This showed that whenever the discount
could be related to something which was more proximate and immediate the redemption was
larger and would translate into increased turnover. This also had an impact on customer
retention. In respect of fats foods outlets, a point which was worth noting was that most of their
ingredients were of fresh foods category. Transporting and warehousing of such items was very
important and critical. Maintaining their freshness was imperative to customer satisfaction on the
overall. Logistics and supply chain management thus would play a very crucial role in the entire
process. So the number of stakeholders in this process was quite large. Apart from infrastructure
issues the problem also had to be addressed in respect of price fluctuations and the consequent
pressure on costs. Number of intermediaries in the supply chain would also impact prices and
efficiencies. One observation that the researcher would wish to make was that while the fast
foods front end was more organized the back end was more disorganized and hence suffered
from uncertainties. Forecasting of requirements was also an issue. At outlets the researcher while
talking with lay customers found many a times the buyers had their psychological motivations
influenced by physical experience of the product and service. This physical experience also
included community based experiences. There was a very large interconnect amongst all these
experiences and they influenced the perceptions of satisfaction greatly.
As stated earlier the researcher while observing operations at the fast foods outlets also found
that in this type of business a differentiating factor was the level to which the outlet was able to
hone it’s supply chain efficiency. The market place battle place was shifting to the realms of
supply chain management and logistics. The capability to cooperate and integrate the back end
and the front end was becoming a vital deciding factor. Since the products and ingredients were
of an extremely short life span, the more integrated the processes are the cost efficiency would
increase through a process of continuous supply chain collaboration.
While studying all the above fast foods outlets the researcher could find quite a few common
strategies adopted by them. The façade had to give an inviting look. Brightly done up they had to
display an inviting look. Most of them used foods as items on their signage. The attempt was to
create a first impression impact of taste. The items chosen were also of products that they were
associated with. Dominoes would always show a pizza on the board whereas McDonalds would
have a burger. Only Parathas similarly put parathas as their main item. This ensured that the
target audience could immediately associate the outlet with the main product on offer.
Location was another point that the outlets had to be very careful about. Fast churn outs on the
basis of both sit and eat as well as take aways had necessarily to concentrate on locations which
ahd a lot of transient traffic. So Mc Donalds, had necessarily to choose railway stations,
expressways and similar sites. Subways and Dominoes could afford locations that were not
necessarily on high traffic concentrations because their customers were largely ordering home
delivery. But for these the home delivery mechanism had to be more honed. Promising delivery
within a stipulated time period required delivery infrastructure, in the form of delivery boys with
their transport vehicles. This also required parking facility and this in turn decided upon the
location. Food courts in Malls was another choice as presence in such places was essential for
customer brand recall and extra impulse consumption. Some of the fast foods players such as
Candies, Papa Jones, and their likes were not so particular about locations, and their choice was
more influenced by where they had initially set up shops and could conveniently expand
operations.
While the major chains built their strategies dictated by the franchisors and their systems of
doing business, many of the individual fast foods operators went by expediencies and suitability
of adoption. Local environment influenced strategy adoptions, as well as formats to be
maintained. Local tastes
Earlier in the chapter the researcher has depicted the supply chain flow diagrams of a few of the
large fast foods outlets and chains. In all the instances one common thread was that a lot of
system based integration was evident. Mass and bulk movements were evident and the same was
justified because of volume transactions. Some type of tracking system was also evident. Fast
foods by itself promises a quick delivery of order, which in its turn demands an extremely
efficient and smooth backup system. If bulk movements are not handled smoothly then the front
end on its turn will not be able to deliver.
In the case of McDonalds the researcher found, a lot of collaboration with the suppliers. There
was a lot of sharing of plans. This ensured that the suppliers were aware of the requirements of
the company well in advance and could on their turn plan their inventory requirements.
Replenishments based supplier management happens to be main method adopted by many
American companies, Walmart included. This method works very well if there happens to be a
large degree of trust between the buyer and the seller. Sharing of future plans do have the risk of
alerting competition and hence many companies are wary to do so. So a way out could be
exclusivity by having dedicated suppliers. The buyer having ownership controls on the vendors
could be other ways to ensure confidentiality. McDonalds also had a lot of control over the
inventory management at restaurants. While overall the procurement was centralized the
restaurants were also involved in deciding on quantum of overall procurements. They were asked
for inputs when it came to forecasting for periods ahead. Business intelligence also played a
critical role in the entire process. Significant importance was given to process integration which
was handled at a centralized level. It was also seen that in the case of McDonalds the number of
items which had to be controlled and monitored were quite large in number. It was because each
of their food item has several ingredients and they are procured from separate sources. They are
also bought from places which involve travel over long distances. Some had to use refrigerated
facilities, which added more complexity to the running of operations.
In the case of Domino’s Pizza the concentration was more on procurement of wheat and dough.
Pizzas are very much dependent on the quality of wheat which makes the dough, because the
chain had to ensure consistency in the texture of the flat bread which would form the base of a
pizza. Wheat also being a commodity, and having seasonal harvesting, the organization had to
rely on efficient procurement for keeping costs under control. Refrigerated vehicles were
important in the transportation of the intermediary dough. The number of outlets and varying
demand patterns had to be factored in while making future plans. In their supply chain a lot of
mechanization was visible. Large quantities of bulk movements made the adoption of
mechanization practical and worthwhile.
Because the outlet operated mostly on home delivery, they had to keep a big fleet of two
wheelers for the purpose. This necessitated availability of parking places around outlets. Speed
of delivery often would conflict with driving safety and the restaurants had to keep an eye
towards inculcating safe driving habits amongst the delivery staff.
In both the above cases the accompanying soft drinks were also to factored in. The stocks of
beverages had also to be factored.
For Pizza Hut, the beverage was Pepsi. For the dough and other main ingredients such as fillings
toppings and cheese melts, the supply source was inhouse, and thus the entire process could be
managed with a little bit of ease. However as to other ingredients such as meat vegetables and
sauces the materials had to be procured from different individual suppliers. Weekly sourcing of
such materials were resorted to and replenishments would be from central warehouse. Thus
while planning for materials were centralized there was also a great amount of local involvement
in the process.
The supply chain management of the other players were individually drawn up catering to their
individual requirements. Depending on scale they adapted to individual needs. At times the
strategy was influenced by expediency and given conditions. Candies for instance leveraged on a
centralized kitchen where controls could be kept with ease. Tibb’s Frankie built on local
strength. But whatever little variations were there in these outlets in terms of scale and
intermediaries, one element was common and that was ensuring regularity and consistency of
quality in all supplies. This was the main precept on fast foods outlets delivering customer
satisfaction.