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The impact of Supply Chain Management practices on Operational

performance for Multinational Quick Service Restaurants in


Karachi

Academic Research Project

Master of Business Administration

By:

Muhammad Farooq Malik 1539107

Muhammad Yousuf Khan 1439124

Zeeshan Arshad 1535208

Supervisor:

Mr. Ferhan Syed

Shaheed Zulfiqar Ali Bhutto Institute of Science & Technology-Karachi


campus

Spring-2017
ACKNOWLEDGEMENT
We dedicate this work to our Parents for teaching us the value of education and to our families for
the invaluable support that they accorded us in the completion of this project. The work of carrying
out this research needed adequate preparation and therefore called for collective responsibility of
many personalities. The production of this research document has been made possible by
invaluable support of many people. A sincere appreciation to all our target respondents who have
spent their valuable time for giving their response as it wont be possible to complete this research
without the response of respondents. I am greatly indebted to our supervisor Mr.Ferhan Syed for
his professional guidance, advice and unlimited patience in reading through our drafts and
suggesting workable alternatives, our profound appreciation to you. Finally, we would also like to
extend our sincere gratitude to SZABIST to give us opportunity to work on such assignments from
where we got practical learning.

[I]
CERTIFICATE

This is to certify that all the parts of this academic research project, titled The impact of

Supply Chain Management practices on Operational performance for Multinational Quick

Service Restaurants in Karachi has been carried out by Muhammad Farooq Malik, Muhammad

Yousuf Khan and Zeeshan Arshad under my direct supervision and guidance, who have fulfilled

all the requirements of academic research for the degree of MASTER OF BUSINESS

ADMINSTARTION at SZABIST Karachi Pakistan.

_______________________

Mr.Ferhan Syed

Professor

Dated: __________________

[II]
DECLARATION

We hereby declare that:

This research report is the end outcome of our efforts and the support of our supervisor
Mr.Ferhan Syed

This research report or any part of it has not used or submitted for any other purpose or
degree.

Word count of this research report is 11331

CANDIDATES NAME SIGNATURE DATE

Muhammad Farooq Malik ______________________ 16-05-2017

Muhammad Yousuf Khan ______________________ 16-05-2017

Zeeshan Arshad ______________________ 16-05-2017

[III]
ABSTRACT
There have been limited empirical studies that left a research gap on the impact of supply chain
management practices on operational performance. This study attempted to investigate the impact
of supply chain management practices on operational performance in Multinational Quick Service
Restaurants serving burgers in Karachi. The research framework was based on the identification
of supply chain management practices leads in food supply management for the measurement of
factors of supplier relation that assists in the maintenance of quality management and timely
deliveries of the materials. The idea was to develop a model based on the factors of supplier
selection, quality management and timely delivery for the local emerging food businesses to work
at the level of what international food chain doing. The research involved the use of qualitative
research methodology in conduct an in-depth investigation for the factors of operational
performance of Multinational Quick Service Restaurants in Karachi. Data collection was done
with the help of interviews that were conducted with General Managers, Assistant Managers and
operations manager respectively, representing different international food chains in Karachi. For
data analysis, themes were drawn from findings and identified the fewer certified supplier selection
with the methodology of scheduled promised delivery of Quality that maintains global quality
standards.

Keywords: Supply Chain Management practices, operational performance, multinational quick


service restaurants, supplier selection, timely delivery

[IV]
TABLE OF CONTENTS
ABSTRACT I
ACKNOWLEDGEMENT II
CERTIFICATE III
1. INTRODUCTION 1
1.1 Background ..................................................................................................... 1
1.2 Problem ........................................................................................................... 2
1.3 Objectives of the study .................................................................................... 2
1.4 Justification ..................................................................................................... 3
1.5 Limitations ...................................................................................................... 3
1.6 Scope ............................................................................................................... 4
1.7 Assumptions .................................................................................................... 4
2. LITERATURE REVIEW 5
2.1 Introduction..5
2.2 Theoritical perspective .................................................................................... 5
2.3 Supply Chain Management practices .............................................................. 7
2.4 Operational Performance................................................................................. 8
2.5 Supplier selection ............................................................................................ 8
2.6 Quality management ....................................................................................... 9
2.7 Timely delivery ............................................................................................. 10
2.8 Construct ....................................................................................................... 11
table#1 SCM practices constructs identified by the researchers...............11

Table#2. Operational performance constructs identified by


the researchers12
Table#3. Quality management constructs identified by the researchers..12
Table# 4(a). Supplier selection constructs identified by the researchers..13
Table# 4(b). Supplier selection constructs identified by the researchers..13
Table#5. Timely delivery constructs identified by the researchers..13
Figure # 1. Conceptual framework 13
2.9 Conceptual framework .................................................................................. 13

3. METHODOLOGY 14
3.1 Research method ........................................................................................... 14
3.2 Selected research method .............................................................................. 14
3.3 Data collection instrument ............................................................................ 14
3.4 Sampling procedure....................................................................................... 15
3.5 Sampling size ................................................................................................ 15
3.6 Data analysis ................................................................................................. 15
3.7 Research ethics .............................................................................................. 15
3.8 Methodology limitation ................................................................................. 16
4. RESEARCH FINDINGS 17
4.1 Introduction ........................................................................................................ 17
4.2 Overview to food purchasing system (FPS) ....................................................... 17
4.3 Overview to food purchasing system (FPS) ....................................................... 17
4.4 Quality in terms of Garvins principle... 18
4.5 Internal versus external customers ..................................................................... 18
4.6 Speed of performance measurement .................................................................. 19
4.7 Avoidance of stock out frequency...................................................................... 19
4.8 Adjustment of malfunction recovery.................................................................. 20
4.9 Delivery timelines .............................................................................................. 20
4.10 Quality Management ........................................................................................ 20
4.11 Supplier selection ............................................................................................. 21
4.12 Interlink and connectivity................................................................................. 21
5. CONCLUSION 22
5.1. Background ....................................................................................................... 22
Figure # 2. Repeating modern bending process for operational
performance at MQSRs.....23
Figure # 3. A diagram of the assembly-serve foodservice system 24
5.2. Planning............................................................................................................. 22
5.3. Supplier selection .............................................................................................. 24
5.4. certificate evaluation ......................................................................................... 24
5.5. Order placement ................................................................................................ 26
5.6. Timely delivery and quality management ......................................................... 26
5.7. Periodic implementations .................................................................................. 27
5.8. Rating systems................................................................................................... 27
5.9. Controlling ........................................................................................................ 28
References 29
Appendix I
Food processing system and food service system ...................................................... I
Microbiological contimination ................................................................................. III
Garvins qulaity principle.......................................................................................... V
food security program ............................................................................................ VII
Quality management system ....................................................................................IX
Ordinance act.......................................................................................................... XII
Questionnaire ......................................................................................................... XV
Interviews .............................................................................................................. XIX
Expert reference .................................................................................................. XXV
Plagirism report .................................................................................................. XXVI
1. INTRODUCTION

1.1. BACKGROUND:
We all earn money in order to fulfill an inevitable portion of life, the food. Pakistani individuals
are tender to make trials of different flavors and this has given an open opportunity for the
international chains to open their outlets and franchises, throughout numerous brands have already
initiated by 1990s to major locations in the country.

Fast food restaurants involving a giant division of the restaurant industry know as Quick Service
Restaurants (QSR) accounts Pakistan to be the 2nd largest business locally and 8th largest market
globally, covering a 27% value in production and a 16% employment provision sector among the
figured 180 million consumers. An annual expanding figure of 21% of QSR makes it counts for
the international sectors to open their outlets and franchises to segment especially the markets of
Karachi, Lahore, and Islamabad (Food Journal, 2016).Industrial evaluation marks an approximate
50 QSRs open up each year in Karachi (Tribune, 2014), counting towards the burger of being at
the notch category with the recent growth drives and consumer choice preferences. Top three quick
service ordered category is marked up by the burgers in Pakistan, aggravate by 21% of daily orders
by Karachi consumers. The cross bar has reached among the emerging white collar and youth
consumerism community.

There are certain dimensions of QSR that makes it interesting in contrast with the creation of
different products, making a competitive dimension with other producers. This heterodoxy
influences the plan made in context for operational performance metrics for quality management,
timely delivery of materials and supplier selection criteria required in preparation and purchase of
the food materials. Food quality changes during the Food Supply Chain (FSP), since it depends
upon various factors that include environmental, technological process, control mechanisms, and
quality assurance (Luning et al., 2002) and undoubtedly the success of a restaurant business
depends on superior quality and its sustainability to it (Chow et al., 2007) .This enables the rise of
the concept of supply chain management (SCM) that has been into practice since the date of its
establishment almost three decades ago (Jones and Riley, 1985). SCM has been considered as an
enabler for reducing costs and improving service levels in the supply chain with a marking of
appropriate supply selection criteria.

This research aims to call the attention to the interdependence between QSR and SCM that is about
the practices used by multinational QSR in managing their Food Supply Chain (FSC) in order to
have a supplier selection criteria and also to ensure quality along with the timely delivery of
materials as a potential means of operational performance while serving Karachi consumers. In
this research the operational performance has been viewed as supplier selection, quality and timely
delivery of materials from manufacturer to producer for conversion it into a finished product for
further processing. It bears the factors for selection of the suppliers, inventory management by

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supplier and distributors, quality achievement by systems and audits, and the measurement of
speed of performance by having the products on station leading towards the achievement of
standardized operational performance.

1.2. PROBLEM:
The multinational QSRs for burgers have been selected for the concerned research. The operational
performance has put into emphasis since it is the key metrics for quality and timely delivery of
materials from manufacturer to producer for conversion in into a finished product for further
processing. The main dilemma that subsidizes operational performance has a direct link with on
time availability of raw materials with an associated standard maintained quality as par the
requirements of the QSR and quality authentication authorities respectively, that is only possible
with certified supplier selection. There is an augmented drift among multinational restaurants of
keeping a high level of qualitative inventory to avoid depletion of food material e.g. raw meat
(poultry, lamb, beef, fish) fresh vegetables (allium, composite, brassica, goosefoot, ground, grass,
legumes, culinary), spices (blended, natural herbs) etc. and this concludes in unnecessary resource
allocation and assists in unaffected high quality of materials with a timely availability at the
premises. Also, in maintenance to on time delivery and assured quality, the selection of suppliers
plays a core important role.

1.3. OBJECTIVE OF STUDY:


The objective of this study is to identify the frameworks that how SCM practices lead to food
supply management for the key metrics of operational performance at multinational QSRs dealing
in burgers for the targeted consumers of Karachi. These aspirations grounds the following tactics:

The identification of food purchasing system-FPS in accordance with food processing


continuum (FPC) and the Food Service System (FSS) that links to Food Supply Chain
(FSC), as explained in Appendix A.

To recognize the influence of SCM practices on operational performance leading towards


supplier realation, quality management and timely delivery of materials from
manufacturer/distributor to the producer, convert it into a finished product for further
development.

To identify that how SCM practices enables effective inventory purchases to avoid stock
out frequency and have a steady speed of performance and malfunction recovery.

To determine achievements for standardized quality maintenance systems followed by the


authority.

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1.4. JUSTIFICATION:
Antecedent researches have postmarked the effects of SCM practices to the key metrics of
operational performance. But the research has conducted in a global context with white color
consumerism being targeted and not made a focused transition for the developing Pakistani market
so this research marks an edge to put up the growing insight of Pakistan in context to multinational
QSRs for burgers within Karachi range.

Local cases mostly divine the study for the procedures of SCM practices either in pharmaceutical
or automobile sectors. Other sectors like multinational QSRs are less or not been given a certain
consideration. This study mainly accentuates towards burgers by international franchise via
keeping concern for their standardized operational performance so that it can be implemented to
the local restaurants to give them a benchmarked food value chain.

1.5. LIMITATIONS:

The following are the limitations subjected with the context of research:

There is a time constraint factor that the study is an applied academic research and needs
to be completed in a timeframe of 14 weeks along with other courses, their projects, and
examinations.

The sample of the study is mainly the procurement officers or demand planners or supply
chain heads of the restaurants or their general managers and is focused group interview
based.

Only head offices or main branch (directly connected to the brand) have put into
consideration to have a focused and to the point result.

The study is confined only to the limits of Karachi multination QSRs serving burgers
(although they have their rest menu and condiments).

There is a high probability of biased data and records shared by the correspondents since
chances of going against the SOPs of their organization or they feel that the information
could be used in an unethical manner.

All the visits have taken place via prior permission of the concerned authority of the QSR
along with the issuance of reference letter by the university authority but despite of it, there
is a chance that the concerned authority of QSRs will not entertain the group in the
provision of a direct visiting card, videos/photos or recordings.

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1.6. SCOPE:
The research calibrates on issues pertinent to operational performance faced by international QSR
in the premises of Karachi. Despite the factual presence of huge localized burger facets working
on a tradition value chain of purchasing and following own food value chain, the operational
performance issues will be highlighted in terms of quality and timely delivery along with the
factors of supplier selection that will mark the benchmark for local food vendors after the result
generation. The scope concludes the study of multinational firms for burgers that how they doing
locally and relating that layout to a follow-up for local vendors.

1.7. ASSUMPTIONS:
The following assumptions are drawn from the research:

All the international outlets are serving only burgers

Usage of imported ingredients both core and secondary

The visited head office , premises or restaurants are not busy

The concern person is either a procurement officer , supply chain head or quality assurance
team lead

The study bears a duration free from strikes or gazette public holidays

The information being provided bears all original data that confines the process being under
practice of MQSRs

The experts from which the interview has taken provides visiting cards.

The concerned authority will take the group to the tour of their authorized places/Kitchens
and pantry.

Results generated from the study are ideal.

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2. LITERATURE REVIEW

2.1. Introduction:
The Supply chain has now bestowed with importance in getting the competitive advantage that
relates the organization to generate a defensible position over its competitors (Vallopra, 1999).
Competitive advantage creates a competition not only among different organizations but by having
a matchup in between the supply chains of each other. In developing economies of gaining the
competitive advantage over one another is by means of supply chains and organizations,
engagement of supply chain performances now determines that who is going to be the winner of
the battle for supply chain carnage. The same factual battle is among QSR. This chapter is based
on the analysis of supply chain management and its practices towards an operational performance
of QSR in terms of supplier relation, quality, and timely delivery and followed with an illustration
of the conceptual framework.

2.2. Theoretical perspective:


The term Supply Chain Management (SCM) was introduced by consultants in the early 1980s.
Supply chain moves the things from point of initiation to the point of consumption (Lambert &
Stock, 1993). Because there is a need, a demand and want from a customer. In order to address
those needs and demands, the motion of the things is required. Supply chain management is the
combination of three words:

Supply is something against the need and want of demand from consumers end and
provider makes an address to those demands, things are made to be in motion.

Chain is the interconnectivity and integration linkages (with no rapture) of activities


(uninterrupted engrossment)

Management comprises of planning, organizing, leading, controlling and staffing. Planning


is the futuristic thing and plot making. Organizing is the alignment and arrangement of
things in an orderly manner (leading and lagging activities). This can be gained by
assigning the ownership that counts to leading. Control is defined as the operating
boundaries (meeting standardizations and benchmarking). Staffing is the right allocation
of the right person that is utilizing the manpower.

The supply chain is not just an interconnectivity of businesses with one-to-one, business-to-
business relationships or solely independent entities, but a network of multiple businesses and
relationships that marks to integrate a strong supplier relation, optimizing the best overall
performance and taking out the maximum benefits as a whole. The Global Supply Chain Forum
says:

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Supply Chain Management is the integration of key businesses process from the end-user back
through the original suppliers that provide products, services, and information in order to add value
for consumers and other stakeholders. (Lambert-Cooper 2000).

Obliging it, (Dainty et al., 2001) elaborated that supply chain management has recently made a
converging point of closer relationships between parties involved in the flow of goods from the
supplier to the end-user. SCM is all about the cohesive processes and works to bring the supplier,
distributor, and the customer in one value chain (Elmuti, 2002).

Each supply chain member connected performs a specific value added functions related to the
product and services as it progress towards the final end-user (Ritchie & Brindley, 2002). That is
about the understanding and meeting the wants, needs, and demands at consumer end bear the
most vital importance in SCM, which is a way of optimizing value to customers and improving
positive return to all the connected team players of the supply chain (Mowat & Collins, 2000).

SCM practices enables the world's leading organizations to compile their supply chains to the flat
world paradigm by providing functioning solutions for company needs in supply & demand
planning, forecasting, sourcing & procurement, supply chain execution and enterprise

The concept regards to the operational performance has different interpretations, and each of the
interpretation has been operationalized in different ways as mentioned in previous SCM studies
and researches. Since the 1990s and onwards, SCM has gradually developed the concept of
outsourcing as more approved operational performance in regards to the impact SCM practices.
As described and enunciated in the SCOR model, that in order to have an improvised operational
performance, SCM needs to be planned, sourced, made and delivered (Gunasekaran et al., 2008).

In parallel to it, SC came across the addition of further different functions and collaboration of
other organizations, each having its own goals and prioritization (Narayanan & Raman 2004). The
addition of further different functions and challenges were made to have further improvised supply
chain performance (Poulymenakou & Tsironis 2003).Since SCM is about the improvised
operational performance, it is totally unavoidable to focus the requirements of on time delivery
and a high-quality accuracy through prescribed standards and practices of SCM. By achieving
strong supplier relation.

When we put our concerns over foodstuff related to its production and planning, the consumers
put emphasize on initial three important requirements that the production and planning should
fulfill to be high quality, up to the requirement and to be healthy. Food material quality changes
during the food supply chain, since it depends on environmental factors, control, improvement,
timely delivery and quality assurance (Luning et al., 2002).

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2.3. Supply chain management practices:
SCM practices have been defined as the set of activities initiated in an organization to develop
effective management of its supply chain. The best supply chain practices are the actions that not
only influences the parts or key processes but the whole of the supply chain (Cuthbertson and
Piotrowicz, 2008). Also, its about those practices and initiatives endorsed by an organization just
in order to enhance and encourage effective management and quality of supply chain. Practices of
SC that can easily influence the process, would be considered as best practices (Richard &
Wojciech, 2008). Such practices and initiatives are determined by dependent factors such as the
type of industry, its position in the supply chain, and length of the supply chain (Li et al.2006).

Past literature reviews mark different initiatives and practices of SCM. (Tan et al., 1998) used
quality, purchasing, and supplier-customer relations to represent SCM practices. For being an
outstanding SCM, the optimum practices can help the organization to understand the impacts of
increased cost, wastage of raw material and low profitability (Min & Mentzer, 2004).

Provision and sharing of information at regular intervals to the SC partners and suppliers enable
the parties to act as a single body (Stein & Sweat, 1998). This association of SC works better when
the links between SC partners and suppliers performing at the best level (Cassivi, 2006), leading
to the achievement of SCM practices. The more the internal links of organizations be, the more
effective the SC will be. SC excellence required that all links work together and link work better
when parties have a shared information. The establishment of visibility is the groundwork for
information sharing (Attaran, 2007). It minimizes supply chain surprises because it provides the
information links that needs to understand ongoing supply chain processes. But except for the
orders placement and order confirmation, there are no regular exchange and provision of demand
information between the parties.

Strategic SC may come across with performance barriers on the incapability to meet customer
demand (Hendricks and Singhal, 2003) from quality and production problems, delivery controls,
and poor collaborative planning. Therefore, the basic principle is to integrate and make processes
and operations seamless in order to reduce lead time to have timely delivery, inventory level, cost,
etc. There are several variants of how supply chain members can collaborate on planning and
inventory including for instance information exchange, Vendor Managed Inventory (VMI) and
synchronized supply (Holweg et al., 2005).The main strategy in SC is to make to stock and make
to order based on forecasted expectation of demand and market trends in order to keep a low-cost
level, high service level and availability of high-quality products (Romsdal, 2014).concluding that
the SCM practices are crucial to obtain better operating results (Sople,2011).

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2.4. Operational performance:
With the development occurred in the recent era, organizations have driven their importance
towards the management and SC coordination, setting goals to minimize their cost and maximize
their opportunities in the market. Apart from it, emphasis have been made in measuring the
performance. Performance measurement is defined as the process of measuring the efficiency and
effectiveness of a certain process (Gunasekaran, 2004). Revealing to it, operational performance
and organizational performance are the two most utilized measures of firm performance (Flynn et
al., 2010).

As observed by some researchers, they have focused their investigation efforts into exploring the
link between operational performance and organizational performance with regards to SCM
practices (Karimi & Rafiee, 2014). Organizational performance refers to the business structure that
falls with financial and human resources criteria (Chau, 1997). Financial includes the return on
investment, market share, profit margin on sales, whereas the human resources is about the staff
and organizational structure. These are the factors termed as external factors (Larso, 2004).
Whereas, the operational performance discusses the organizational processes that can be measured
using variables like production reliability and defect rates, cycle time, on time delivery, quality
and inventory management (Voss et al.,2012). The operational performance variables are termed
as internal factors.

Researchers confirms the idea when they argue that SCM practices directly affect operational
performance and might indirectly affect financial performance when improving operational
performance (Li, Ragu Nathan et al., 2006).Also, the recent works (Bozarth et al., 2009; Cai et al.,
2009; Martin, Patterson 2009) have shown a clear interest in investigating the impact of SCM
practices on operational performances. Also, the factual considerations for high expenditures and
budgets with a constant increase in customer demands, the need for quality production and timely
order fulfillment is more essential than ever, that affects the operational performance in terms of
SCM. Therefore, operational performance rather than organizational performance is put into
consideration in this study since it is believed that the outcomes of operational performance can
be noted and as the key aspects of firm performance.

2.5. Supplier selection:


Supplier occupies a strategic role in the SC of an organization as it signifies source function in
SCOR model. Purchases possess excessive part of the COGS and it is crucial to managing it
applicable to enhance operational performance. There are several studies that reflect suppliers
being to have the most optimum involvement in a long-term or strategic partnership that assists a
firm leverage the strategic and operational capabilities and attains continuous benefits (Stuart,
1997). The strategic partnership is essential as it not only contributes in collaboration but is also
important in receiving input from the supplier at an early stage (Spekman, 1988). The strategic
partnership is linked with Supply Relationship management, which can be described as the process

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of how an organization works together with its suppliers (Garca-Dastugue, 2001). Firms who want
to perform well, in the long run, needs to focus on strategic partnership and implementing SRM
with their customers.

The strategic role of purchasing process starts with bidding for procuring raw materials from
various parties or suppliers. The selection of supplier has a pivot part in the entire procurement
process as the organization devotes substantial time to it. In modern SCM practices, the focus is
on building and managing buyersupplier relation to succeed competitive advantage (Leenders et
al., 2002) and to have close and collective relations with few suppliers as an alternative of many
suppliers (Speakman,1998).This collective approach is essential for:

Enhancing the purchasing performance constraints especially for inventory and cost
reduction

The tendency to focus only on visible aspects of supplier and buyer relations by achieving
synergies to have common gains and trust.

There are certain factors suggested by the practitioners on interviews and extensive literature
reviews to evaluate supplier selection criteria:

The assessment of service capabilities, quality and strategies with managerial alignment
with the buyer (Li, 2006).

Focus on cost, quality, and service (OBrien and Ghodsypour, 1998).

SC excellence required that all links of both internal and external SC work together. The internal
links of information sharing and ongoing SC processes by the establishment of visibility (Attaran,
2007). The visibility about effective information and SC practices to achieve operational
performance (Abatekassa & Peterson, 2011). Reducing uncertainty by having transparency of
information flow bears foremost objective in external SC (Ryu et al., 2009). Both strategic and
operational information discussion are the prerequisite to enhance SC performance (Ramayah &
Omar, 2010).

2.6. Quality management:


SCM practices are essential for implementing quality management in an organization. SCM
practices have developed steadily with a time that includes outsourcing, supplier partnership, cycle
time compression, and information sharing (Donlon, 1996). Quality management practices have a
significant impact on the operational performance of an organization and there are many historical
and empirical indications that validate the direct link between quality management and operational
performance. The empirical literature has been quite stable in identifying the quality as an
important competitive competency (Tracey et al., 2005). Quality is not a one-dimensional
perception, but its a way of perceiving the quality through the different context, and each context

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is in accordance with its work environment (Brown et al., 2001). There are certain definitions
available in context to quality. As enunciated by the experts of quality management:

Quality is conformance to requirements (Crosby, 1979)

Quality is fitness for use (Juran, 2003)

The degree of uniformity and dependability with a standard suited to the customer
(Deming, 1986)

Food quality changes during the food supply chain, since it is highly governed on controlling,
continuous improvement and quality assurance factors (Luning et al., 2002). As the level of safety
of food products rests upon health, consumers are particularly concern towards the issues of quality
and safety (Leung et al., 2015).The quality of food is distinguishable into either external features
that bear the characteristics of texture and taste leading towards food safety or by interior features
of microbiological contamination, as explained in appendix B. There are five methods to
comprehend quality followed into classifications of transcendent, product based, user based,
manufacturing based and value based(Garvin,1988), as explained in Appendix C.

Since last decades, quality management systems ,standards and food security programs like GMP,
ISO 9000, BRC, etc as explained in Appendix D and Appendix E, have been implemented by
several industries including the food chains and restaurants, aiming towards the achievement of
long-term trust by creating products and supply services that accomplishes the end- customer
requirements (Kano et al., 1996). Improvements in production processes for food are significant
for the quality. The competition holds on the manufacturer's innovation and continuous
improvement of products with reduced production costs (Deming, 1986).Quality control involves
the application of activities that certifies the achievement of the set objectives, including evaluation
of the implementation policy and the quality.

2.7. Timely delivery:


One of the critical performance dimension for the logistics and distribution processes is time
(Lamming, 1996). Quality and on-time delivery and the two main factors that has competitive
influences in manufacturing performance (Karim et al. 2008b).

There are other certain factors that affect the successful inventory management practices on
manufacturing performance and on-time delivery (Whybark, 2005). However, there was a weak
concluding relation of inventory management and overall operational performance. Previous
literature enunciates that it takes more than inventory management to attain levels of OTD
performance. The material and product safety stocks must be detained to prevent production being
delayed and deprived delivery performance to customers, obtaining an optimal inventory (Maia
and Qassim, 1999). Though safety stocks reduce costs of delayed deliveries but expressively

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increase inventory costs. With rapid passage of time, manufacturing practices are reduced to
inventory and delivering the right quantity on-time that is timely delivery. If the delivery times can
be accurately estimated for execution in accordance to delivery plans, the requirement for safety
stocks reduces.

Studies that have been conducted mostly forecasted with limited improvements such as optimal
production, scheduled and forecast inventory management, but the whole product development
process was not taken into attention in improving on-time delivery operational performance. Lead
time in a food distribution for QSR is a lean measure that could be associated with either waiting
time for the loading bureaucracy, warehouse operation and delivery route conditions. Timely
delivery enunciates the measures how well the supplier organizations meet intended schedules and
request dates. Lead time minimization is a quantitative measure in which focusing on it through
systematic data driven approach will potentially improve the operational performance of a QSR.
In fact, reducing the lead time not only can have tremendous results in improving operational
performance and reducing the cost of poor quality, but it can also have a substantial effect in timely
delivery performance. By reducing lead time and achieving faster delivery, the companys
competitiveness will be enhanced (Arnheiter, et al, 2005). Consequently, there were declines in
lead times but always there was an alteration in the planned and actual lead times (Agrawal et al.
2000). Therefore, it has been specified that lead time and timely delivery are important SCM
variables as their measurements will have intense impact on SCM practices (Tummala, et al, 2006).

2.8. Construct:

Antecedent researches have postmarked various number of constructs connected to SCM practices
leading towards operational performance as explained in the literature review. In context to it the
extraction is as shown in following table#1 and table#2.

Table#1. SCM practices constructs identified by the researchers


SCM practices construct Researchers
outsourcing, supplier partnership, cycle time Donlon, 1996
compression
Quality and purchasing Tan et al., 1998
Cost and wastage control Min & Mentzer, 2004
sharing of information Stein & Sweat, 1998 ; Holweg et al.,
2005
suppliers performance Cassivi, 2006
establishment of visibility Attaran,2007
customer demand and delivery controls Hendricks and Singhal, 2003
Vendor Managed Inventory (VMI) and synchronized Holweg et al., 2005
supply
make to stock ,make to order, service level Romsdal, 2014
operating results Sople,2011

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Table#2. Operational performance constructs identified by the researchers
Operational performance construct Researchers
Efficiency and effectiveness Gunasekaran, 2004
production reliability ,defect rates, cycle time, on time Voss et al.,2012
delivery, quality and inventory management

The most complex contrast is of quality management that includes various factors and formulations
(Westphal, 1997). A number of authors have illustrated that quality management has a set of core
characteristics (Anderson et al., 1994), concerning to the basic principle of continuous
improvement with a number of associated SCM practices (Dean & Snell, 1991). The following
table#3 explains the extractions of quality management contructs from the above mentioned
literature review.

Table#3. Quality management constructs identified by the researchers


Quality management construct Researchers
Competitive competency Tracey et al., 2005
Work environment Brown et al., 2001
conformance to requirements Crosby, 1979
fitness for use Juran, 2003
degree of uniformity , dependability, innovation, Deming, 1986; Luning et al., 2002
continuous improvement ,reduced production costs
Controlling and quality assurance factors Luning et al., 2002
safety Leung et al., 2015
transcendent, product based, user based, manufacturing Garvin,1988
based and value based quality
quality management systems and standards Kano et al., 1996
quality assurance Luning et al., 2002

SCM practices construct as shown in table#1 enunciates that supplier selection and timely delivery
are in the domains of operational performance. Table#4(a), Table#4(b) and table#5 represents the
summarized findings of different researchers on supplier selection and timely delivery on the basis
of mentioned literature review of researchers.

Table# 4(a). Supplier selection constructs identified by the researchers


Supplier selection construct Researchers
strategic partnership , operational capabilities , Stuart, 1997
continuous benefits
Supplier input Spekman, 1988
Supply Relationship Management (SRM) Garca-Dastugue, 2001
buyersupplier relation, competitive advantage Leenders et al., 2002
collective relations, few suppliers and many suppliers Speakman,1998
capabilities, managerial alignment Li, 2006

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Table# 4(b). Supplier selection constructs identified by the researchers
Supplier selection construct Researchers
internal links, information sharing and Attaran, 2007
visibility
effective information Abatekassa & Peterson, 2011
transparency of information flow Ryu et al., 2009
strategic and operational information Ramayah & Omar, 2010
cost, quality, and service OBrien and Ghodsypour, 1998

Table#5. Timely delivery constructs identified by the researchers


Timely delivery construct Researchers
logistics and distribution processes Lamming,1996
on-time delivery and competitive manufacturing Karim et al. 2008b
performance
inventory management practices Whybark, 2005
material safety stock, product safety stocks, Maia and Qassim, 1999
delivery performance, optimal inventory
Lead time reduction Arnheiter, et al, 2005
alteration plan in actual lead times Agrawal et al. 2000

2.9. CONCEPTUAL FRAMEWORK:

Following is the conceptual model of this study on the basis of constructs developed from the
literature review; here is illustration of variable#1 (quality management), variable#2 (timely
management) that are dependent variables to the independent variable#3 (supplier selection).
Variable#3 itself is a dependent variable to the independent variable#4 (operational performance)
.therefore variable#3 and variable#4 are moderating variables. All the variables are in parallel to
SCM practices.

QUALITY
MANAGEMENT
OPERATIONAL SUPPLIER
SCM PRACTICES
PERFORMANCE SELECTION
TIMELY
DELIVERY

Figure # 1. Conceptual framework

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3. METHODOLOGY

3.1. Research method:


There are two types of research methods namely the qualitative research and quantitative research.
Qualitative research is mainly an exploratory research that involves understanding of underlying
opinions, reasons and interpretation of social interactions. It involves a small samples with the data
collection with the usage of different methods to get data of words, images, and objectives. The
advantage of qualitative research is that it comprises in-depth investigation of the researched topic
with subjectivity in its results. On the other side, quantitative research is one that is supported in
order to test hypotheses and makes predictions in accordance to the result found. It involves in
selection of a random large sample with the data in numeric form (Barnham, 2015). The data
analysis techniques are based on several statistical tests performed using software. Qualitative data
analysis is based on the identification of themes with an objectivity in its result.

3.2. Selected research method:


The aim behind the research that has been carried out is to draw a parallel relation to what the
MQSRs being doing with respect to their operational performance in context to SCM practices
with what the local emerging names doing. Keeping this frame in mind, the research method that
has been selected in finding appropriate results that aims to seek answers to specific selected
variables that are supplier selection, timely delivery of materials and quality management is
qualitative research method. This type of research has predefined orderly procedures that involves
answers to arise issues with evidences to proceed forward with the development of a new finding
questions (Jun Jin and Bridges, 2016). The methodology is an effective tool in finding the
intangible factors and complex research questions with scientific reasoning.

3.3. Data collection instrument:


The methodologies used in exploratory qualitative research for collection of data consists of
experience surveys (in-depth interviews), participant observation, and focus group. The in-depth
interviews or experience surveys are used for gathering primary data by asking open-ended
questionnaires already made to the selected experts and commoners and then data is extracted to
what is required for analysis. The participant observation is another method used by the researcher
by observing naturally occurring behaviors of participants. By following this method the
researcher gathers relevant information and do thematic analysis to get the desired results. The
focus group is a discussions of homogeneous experts or commoners grouped to gather primary
data. The focus group discussions are effective regarding collecting data linked to specific
population (Barnham, 2015). The method used is an interview based with collection of volumes
of in raw data and then extract to get desired findings.

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A research is considered viable in approach if it provides sufficient evidences to support it.
Keeping that context, the selected data collection method for the research is experience surveys
(in-depth interviews). The semi-structured interview questions were asked from each respondent
to express their thoughts in a race against time frame with possible recordings of vocals via
recorders and required data notification manually. The reason was to extract the tools and
techniques used by the MQRs that was only possible via preparing set of data-extractive questions
to gather a magnificent information to draw conclusion of what requires towards the operational
performance in context to SCM practices. The interviews were start from April 20th to May 4th
2017 taking a total period of 15 days with hurdles and time devotion. These interviews took over
direct or one-on-one basis at the location of the experts.

3.4. Sampling procedure:


A non-probability sampling procedure has been selected to extract data that is purposive or
judgmental sampling from the choices from convenience, quota and snowball sampling. Purposive
or judgmental sampling is one of the most commonly used methods in performing an exploratory
research. The approach was to target the experts and commoners related to the SC and QA of the
MQSRs. although the sampling method is time consuming and selection is biased but being low
cost due to available resources and effective form of data collection, bears the reasons of selection
of purposive sampling

3.5. Sampling size:


The sample size consists of 9 experts working in head offices of 10 MQSRs out of which 2 samples
are linked to local restaurant chains. The managers were selected from the departments of supply
chain management and quality assurance with designated levels of General Manager, Assistant
Manager and operations manager respectively.

3.6. Data analysis:


For data analysis which is the main dilemma in extraction of relevant information, the thematic
analysis has been used. The use of thematic data analysis technique results in the minimizing of
data set. The raw data collected was in the form of records and manual descripts that later on were
converted to word to word readable interview, the first step towards coding of data for thematic
research. After that synthesis of data was done first by developing descriptive themes and then
drawing relations among them. In the end, the main themes extracted from the data were confirmed
by few of the research participants to have surety of absolute information has been drawn.

3.7. Research ethics:


The main concern in research with context to keeping the professional ethics along university name
was the confidentiality of participants and the extracted data. In this research, the heart which is
SC of the MQSRs has been touched that bears the secrets and methods of how MQSRs exercising

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different tools in their firms. The interviewed experts were ensured that their responses would only
be use for carrying out the existing academic research purpose only. Not all but only few of the
names and identities of experts have not been revealed in the research as a sign of commitment
that what the group did with them.

3.8. Methodology limitations:


Although every precautionary measure has been taken to ensure accuracy and validity of the
research, however, still few of the limitations remained in the chosen methodology. The most
considerable limitation is small size of respondents that were mainly the experts was selected since
we have to spoke to only one person from each of the selected MQSRs in Karachi only and dealing
for burgers. So this has driven towards the generalizability of research findings. Also the
viewpoints of the experts were personal and no checks can be applied to non-biasness of
individuals. Furthermore, respondents may have reflect their optimistic opinions besides the reality
behind, keeping their authority and being honest to their respective organization. So chances that
they may not reported the accurate matter and correct technical words of their tools and techniques
being followed so that no external damage can be done to their reputation of brand they are
representing to us. With the academics view part, time horizon was the biggest issue that the
research need to be compiled within the time frame of 14 weeks and 1 day, to cater this cross-
sectional research technique was chosen to collect data via interviews in a limited period.

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4. RESEARCH FINDINGS

4.1. Introduction
The outcomes of the research are grounded on the thematic analysis of the primary data gathered
from by interviews. The interviews are based on questionnaire that has been taken from experts
and commoners linked to supply chain. The questionnaire coincides the data for the variables to
the supplier selection, timely delivery and quality management that leads towards operational
performance of MQSRs with respect to SCM practices as base.

4.2. Overview to Food Purchasing System (FPS):


The first question that breaks the ice with the participants was in concerned to in what form the
materials are being procured by the authority in terms of food processing continuum. According
to few of the correspondents:

We are totally away from processed frozen items. We do in everything fresh whether its about
beef or chicken, its all fresh patty preparation only sauces, buns and other dry groceries are in full
processed form.

Others said:

Everything that we purchase is fully cooked. Only raw food processing continuum is followed
and nothing raw production is done in our restaurants.

4.3. Overview to Food Service System (FSS):


The second question was followed the food service system being followed by what strategies of
making , transporting or selling prepared items to the restaurants. The correspondents said:

In our restaurants, assemble-to-order supply chain is followed, that all the food is available in
pre-cooked form and only assembling is done that is for burgers, the buns are toasted, patties are
re-thermalized from -18oC to 200oC on hot plate or grilled for 2-3minutes and mayonnaise is
placed with lettuce and other condiments as per the recipe.

Others said:

We work on the conventional food system since our restaurant kitchens are only provided with
raw protein and therefore all the cutting, marination and the patty making process is done up there
and later is left to set for thawed and is re-thermalized to grill in ovens

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4.4. Quality in terms of Garvins principle:
The questions was asked in a detailed explanation form to give its background. The correspondents
replied:

We define our quality by saying quality at supplier. We have provided our suppliers with the
certain objectives and degree to what we benchmark our product by the standards and attributes
that compiles our brand name and makes us remember because of specified infinite quality

Others conclude:

Our brand is not just about the overall or customer experience the main part is product taste,
quality being provided, ambiance makes up the complete experience. our target is that we provide
the customer with such an experience in which that only about the WOW factor but we work on
the wonderful experience.as part of supply chain we define the quality in the perspective of
simplicity that we want to compile the companys overall goals and objectives that is to circulate
high quality level orders to customers.

4.5. Internal versus external customers:


The questions claims to define themselves of being customers in the procurement of materials,
products, service or information. Few said:

We are internal customers. We properly assign inspection person for checking material process
when received from supplier on factors of weight of product and packaging. The lot sized material
is checked through sample cooking process and what if its not up to the standard what we have
demanded we returned it

One of the respondent said:

We dont return the consignment instead we hold it because its our specific product and directly
related, therefore we dont want it to be circulated by our brand name in the market in rejected
form. We discard it by burning decomposition process in presence of the supplier that is we
demolish it. Other material that is not directly related we may return it but no other than that

Also the participants mentioned that:

Our quality is totally being managed at our suppliers distribution channel. The concern supplier
who is in the provision of protein (meat and chicken) from backend our concern inspection person
is present there that looks into the production process of protein. Our system that is from DC till
to reach our customer, no quality check specifically is not done. Our supplier checks and manages
all the quality. Reaching in our restaurants, staff looks after it that.

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4.6. Speed of performance measurement:
The measurement of how the operations are being performed measured by elapsed time and other
metrics shows at what pace the restaurant is running. The correspondents said:

Orders are directly placed to our DC where it handles all the items of supply. Ordering cycle ,
inventory in hand , current usage trend of that product , current transient time of that product ,
shelf time of that product , these all the factors that we measure before we place the order to
have an appropriate speed of performance.

Others followed it to respond by:

We maintain our speed of performance by utilizing our buffer inventory since we have a one-
month consumption and lead time is of 60-90days so we keep a 60 days buffer inventory on hand
that counts to a total of 90 days total inventory.

But one respondent said:

We have a certain calculation formula in percentage basis for the measurement of speed of
performance that measures the elapsed time by the certain number of items in a delivery over the
hours it took to reach from the vendor to the desired locations. That the elapsed time for today it
took 75%.

4.7. Avoidance of stock out frequency:


The questions queries with regards to the avoidance of circumstances in which the inventory not
being available to meet demanded order which is crucial to measure the fill rate, then what
practices are followed too meet immediate stock availability. The respondents replied on it by
saying:

Best way to avoid stock out frequency is to carry the inventory. We have a certain buffer
inventory level developed and defined for each and every product that we need to maintain. So
in that way we are always able to avoid the stock out frequency and maintain back orders by
buffer stock usage and it totally depends upon the perishability of shelf life of the product.

Others said:

We have a simple procedure by measuring danger stock levels purely on supply chain lead time.
We have some internal names to given to it. We order in accordance to the buffer stock that before
it reaches to an end or to danger level so we put the order in the pipeline. For example if it takes
21 days for a product to be developed by the vendor, we ensure that the order is to be given 31
days prior the stock lasts. After it obviously the vendor will be requiring the time more or less 15-
20 days but if not the increase in lead time we overcome it by using the buffer stock levels that
becomes a catalyst to emergency situations

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But one of the respondent said:

In the scenario of stock out frequency, we cater towards the factor to face lost sales if such tragedy
happens. For the fill rate mechanism we dont look towards the localized vendors, we simply put
that demand in the list and sent it to the vendor. We dont interlinkages other branches in stock out
situation.

4.8. Adjustment of malfunction recovery:


The question was based on the scenario that what if the demand planned for the material is late or
not timely delivered then how the MQSRs adjust their time of out of stock breakdown and time in
arrangement of alternate facility by some contingency plan. The respondents said:

For malfunction we have alternate suppliers for each and every product and they all are under
the certified standards. Despite we are not making any regular buying with those alternate channels
but the backup plans are maintained to avoid the lost sales. So that in case any problem happen we
have a backup supplier is always ready.

One while mentioning their way said:

If malfunction happens we use the buffered stock and in order to produce it again, we order at the
same time twice to the vendor to deliver the shipments. If the shipments docks are late we use the
interdistribution transfer IDT that the stocks end at one warehouse so to overcome it till the
external shipment the demand is transferred

4.9. Delivery timelines:


The question was referral towards the delivery timelines of stock that either are scheduled or at
one off time. Also the questions queries about the procedures of receiving order timelines. The
correspondents said:

On time deliver is measured with schedules delivery process with materials we work on business
days. Some critical suppliers like bakery with them we work on calendar days.

Also:

The consumptions are on calendar days and purchasing is done on working days. We have revised
promise dates with the vendors. Once the product is out in the sea, its our fate then the delivery is
on time or some disaster happen that makes the delivery late and lead time becomes high.

4.10. Quality management:


The question coincides the auditing standards and tools followed by the MQSRs. The
correspondents were not very much cohesive to reply to the facts of quality management tactics
but they said:

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We are not following any of the prescribed standards, our vendors need to follow the protocols
that are FSSC-22000 and BRC. ISO 9000 and 21000 are localized. Our volume and the quality
protocols are our negotiation power.

Also the respondent said:

We have own standard to drive quality that is standard quality management system - SQMS. Also
we have implemented the HACCP (Hazard Analysis & Critical Control Point) quality control
system that is applied to keep food safety and standards to a level and follow the highest quality
as well .We have a system that the products are required to conduct around 72 specific safety
protocols that marks to total 2,160 safety checks and procedures monthly and turns down to 25,920
annually before arriving to restaurants. If we talk about the protein every incoming shipment of
the protein that we get is tested for certain microbiological test like of E.coli, and then held until
tests return.

In context to packaging, the one correspondent said:

We have placed metal detectors that before packaging our material is passed through it in order
to find any iron or metal particles in the patty or raw material. So those who are the alliance with
us they have to put the metal detectors as well.

4.11. Supplier relations:


The question records the supplier selection, rating criteria, number of suppliers and provision of
visibility for information sharing to suppliers. According to participants:

Overall rating system is depends on the quality provision and service level of our supplier, the
proper submission of the invoices, documents and shipments in accordance to our proceedings and
standards. Rating is a continuous process that our team keeps on working on it to have quality and
ideal supply chain mechanism. We have only those supplier that meets our standards, we do have
many suppliers for different products and varies with product but we have 80-100 approximately
working under our DC. Suppliers are and connected via contact of DC and with our branches to
have a visibility clearly and to have a timely supply.

Others said:

We have three type of rating system that depends upon our yearly reports that marks the quality
performance, deliveries level as par requirement because a high level of risk is involved. We have
standards and specifications are shared with the vendors that which material use, what sort of cuts
of chicken to be made all the specifications are in the sheet focusing the most microbiological
factors. We have one regular supplier and two at alternate

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4.12. Interlink and connectivity:
The last question clarifies the queries of the interlink path between the suppliers and MQSRs. The
respondents replies:

We have an own software where all the suppliers are registered. Actually our suppliers are not
only for one market, but they serving to whole global market, so there are certain procedures that
supplier need to follow like supplier need to have their own WSI number worldwide, and also each
and every product of the supplier is registered to our overall system through RIN number. So that
way supplier registered globally and any market can reach to our supplier after the approval of
their regional head office and can have business, this is how we manage data of supplier and
managing a uniformity and quality to our system.

Others said:

We are not using any software for coordination with supplier, we simply email to the suppliers
for ordering the material or send the purchase requisition.

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5. CONCLUSION
5.1. Background:
The traditional way the purchasing is being operated by the local restaurants is simple but not
feasible for the long run. No prior processing of the material is being done, all bought in raw with
a conventional food service system. Quality relates only to satisfy end customer and marks the
material only by fit for use. The ordering process is done by material controller or demand planner
who is the customer passes a requisition to a number of suppliers for a certain quantity of materials
that to be deliver on a certain day. The material includes protein, dry groceries, restaurant supplies
etc. The customer who planned the demand gets few quotations or bids and start seeking the lowest
possible price provider. Usually the quantities are somewhat large with an on-going requirement,
therefore two suppliers are selected to ensure the continuousness of supply. The supplies arrives
with no on time schedule with revised promise dates, therefore no measurement for speed of
performance and stock out frequency. The customer would play with one supplier against another
by threatening on delivery performance and cheaper costs. Malfunction recovery was only by
choice among two suppliers. This traditional situation has now marked with a change by the
MQSRs and is ensuing the following cycle:

SUPPLIER CERTIFICATE ORDER


PLANNING
SELECTION EVALUATION PLACEMENT

TIMELY DELIVERY
PEIODIC
AND QUALITY RATING SYSTEM CONTROL
INSPECTIONS
MANAGEMENT

Figure # 2. Repeating modern bending process for operational performance at MQSRs

5.2. Planning:
The concept of mid-range and processed food purchasing system is planned that leads to the correct
directions of food processing continuum. The work direction towards ready prepared and assembly
serve food service system has put into consideration that ingredients and materials are purchased
either raw or frozen, food is produced on premises held either heated or chilled and serve to the
end customers with an allowance of multiple day production.

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Figure # 3. A diagram of the assembly-serve foodservice system

5.3. Supplier selection:


Once the restaurant demand planner knows what it plans to do with the core competencies and
what it plans to use suppliers for the level of relationship that desires for each supply needs, it
engages in the supplier selection process. Different suppliers were supplying the same material at
a different quality standards and variations was problem. Suppliers are selected on more complex
criteria than price and delivery. Therefore the concept of multiple suppliers contracts down
towards single and few supplier by taking initial references from other customers.

5.4. Certificate evaluation:


After the initial supplier selection the restaurant starts its move towards the concept of certified
suppliers by starting evaluation among the initial selected suppliers. The main aim is to make
improvements in the area of quality and timely delivery, the customers starts insisting quality
certification program to the suppliers so that continues improvement in quality and timely delivery
can be achieved. Certification is a wide on-site evaluation of suppliers against agreed performance
levels which all in all a benefit to both customer and the supplier in getting supplier certified.

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From customers point of view the advantages are:

The supply of products will be consistently efficient, safe, delivered on time and can be
direct to the point of use.

Consolidation to have few suppliers that helps in significant saving

Building the trust and information sharing that is visibility with suppliers

From the suppliers point of view the advantages are:

The suppliers would be kept on to the list as gradually they get more work by provision of
single source order with larger volume resulting the other players to be dropped.

Provides an excess to wider markets

An access for suppliers to learn more about customers intermediate needs

The approach is taken by sending a self-assessment form to the supplier which after being
completed is returned to supplier evaluation team. From this a short list is drawn up and then site
visits are made for quality audit. The results are discussed with the customer. The purpose of the
certification exercise is to ensure that the suppliers product can be accepted without incoming
inspections and do not need counting. The following factors are kept in focus for the selection of
certified suppliers:

1. Checking the technical feasibility that as the supplier is claiming that he can provide the
restaurant with the required material on time, the following factors needs to be focused:
Machinery available
Infrastructure
Manufacturing team
Expertise for process

2. Financial assessment by checking the liquid ratio to see if their liquid assets exceed their
liabilities

3. Sustainability that no environmental hazards that supplier is producing like chemical water
and air pollution

4. Maintaining the labor rights and against child labor

5. Pricing that correct price and appropriate cost modelling.

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6. The attitude of the management and the general work force to the introduction new
methods of working

7. Produces appropriate test data by recording the percentages for service levels for current
performances

8. Supplier using an initial fully documented quality management technique. From amongst
the following standards to be exercised as per land law and food rules:

a. Pure food ordinance 1960 and pure food rules 1965 (amendment act 1973 and 1995)
are the basic land laws which govern preparation and sale of foods in Pakistan, as
explained in appendix F.
b. HACCP system, as explained in appendix D, to be the base for the prevention of
hazards to the industry to produce safe food to consumers.
c. Certifications of ISO-9000 series,ISO-22000 series, PSQCA certified retailed food
products and Halal Foods certification, as explained in appendix E

9. Supplier measurement for capacity and capability that is records of high quality and on
time deliveries by considering HAZOP rules as explained in appendix D

5.5. Order placement:


After passing the supplier certification procedure and become a certified supplier, the next step is
signing the contract by negotiation with supplier and the deal is planned as needs to meet customers
manufacturing requirements. After the terms have approved, supplier relations have now
stimulated by long term contracts that address quality, delivery, cost and overall services provision.
The customer will now start providing the longer horizon of requirements. The customers will
incorporate the release systems which involves the provision of required schedule of materials on
regular basis, for instance every four weeks, the supplier makes a scheduled delivery against it.
The major difference would be for change notes that will not raise every time a quantity changes,
the new releases shows the revised requirements. Restaurants will be prepared to share data with
the partners that is provision of visibility. Many restaurants resists this as it means giving
information to a supplier the other competitors. As we are giving our suppliers advance
information of our needs, and guarantees to go with them, in return we expect first class
performance with honesty and trust. This is how the speed of performance is also measured.

5.6. Timely delivery and quality management:


Incoming inspections are now being done and replaced by quality standards at source. The supplier
must be totally reliable and deliver exactly the quantity ordered at the correct time. For the
implementation of this strategy the concept of cross docking is emphasized which recounts to

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goods being received, sorted and then loaded onto an ongoing vehicle on the same day. Usage of
standard container or tote box will also introduced so that materials handling can be made easier
with the standard size container. Once the application of this concept is used by the supplier, a
large vehicle to will move goods from the supplier to the customer location. The vehicle is
scheduled to be at customers point at a certain scheduled time. This results in reduced inventory
holding, a shorter throughput time and reduced storage space requirement. The deliveries are all
in parallel to working days and are based on original promised dates. This enunciates in avoidance
of stock out frequency and attains the malfunction recovery.

5.7. Periodic inspections:


Periodic visits are made to the suppliers to carry out quality audits and inspections, determining
their present and past performances.

An introduction to statistical process control system to be done to ensure a consistent quality


product is produced and markings for number of rejections can be recorded by incoming material
inspection. These inspections can be recorded in the frame of Acceptance Quality Limits (AQL)
to have a limit between the acceptability and refusal of orders by setting limit from inspected
samples in a batch. It can be done using the following optimistic values set as:

5% - onwards for critical defects (that the inspected sample is not suitable for use and
totally not under provided standards of quality that is unacceptable).

2%- 4.9% for major defects (that the inspected sample is not suitable for use, but some of
the material can be accepted that is partial acceptable).

0% - 1.9% for minor defects (that the inspected sample is suitable for use and not totally
under provided standards of quality that is acceptable).

For the measurement of the required delivery time from the supplier the phenomenon of service
level is utilized as:

demand met from stock


= 100
total demand

5.8. Rating systems:


As the changes happened in the way the purchase requirements were traditionally purchased,
changes have occurred in the way suppliers are now being rated. Although if supplier cuts cost
down and delivered on time, then they were classed as a good supplier but the quality observance
to the required delivery has become more important so the purchase price became third in

27 | P a g e
importance. If the supplies are late or the materials does not meet the quality standard required
then restaurant can come to stand still or to reschedule the work from scratch. So the supplier with
the lowest quoted price is now not at the best. As the suppliers process and ratings gets improved
the incoming inspections will not be necessary and deliveries can be made direct to the point of
use.

5.9. Controlling:
Electronic data interchange (EDI) and the internet usage to be done in order to decrease the cycle
time and increase the quality of communication. The receiving pipeline of goods, incoming
inspections, stores put away and store issues is totally removed, that has reduced the receiving lead
time resulting in controlled inventory , timely delivery of quality managed materials with a
certified supplier and lastly greatly reduced costs.

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33 | P a g e
Appendix A: INTRODUCTION TO FOODSERVICE SYSTEMS

A foodservice director has many options for food production and service. Most foodservice
directors inherit a foodservice system, but may make modifications to that system or select and
build a new system. For example, in todays environment it is very difficult to find adequate labor,
which is forcing school foodservice directors to consider alternatives in food production. Also,
there is a great concern about food safety, including Hazard Analysis Critical Control Point
(HACCP) program implementation, and quality control that might be improved in centralized food
production. If a change is to be made in the system, it is important to know what alternatives are
available.

Form of Food Purchased

Another concept that is important to the understanding of foodservice systems is the form
in which the food is purchased. Following is a diagram of the food processing continuum:

This diagram depicts the continuum of food processing that might be done prior to purchasing. For
example, if food were purchased at the none end of the continuum, the ingredients for a product
would be purchased. If food were purchased at the complete end, the food product would be ready
to heat or serve (perhaps requiring no preparation or only re-thermalization). Here is an example
that you might find in school foodservice. Lets take Italian bread. We could make many different
decisions about where on the food processing continuum to purchase Italian bread. We could
purchase all of the ingredients (yeast, flour, sugar, shortening, and salt) and make our own bread
from scratch. In this case, the food is purchased with no prior processing (none end of the food
processing continuum). We could purchase frozen bread dough, proof it, and bake it. In this case,
we are purchasing items somewhere in the mid-range of the food processing continuum.
Purchasing from the complete end of the continuum, we could purchase Italian bread already baked
and all we do is serve. There are many examples in school food service of similar choices for how
much processing will be done in the foodservice operation and how much will be done prior to
purchasing the product.

I
Types of Foodservice Systems

Four types of foodservice systems are described in the literature: conventional, commissary, ready-
prepared, and assembly-serve. There are numerous examples of each of these systems in operation,
both in school foodservice and in other segments of the foodservice industry; and there are many
variations of them, too! A description of these systems will be useful if you are considering making
changes in your operation.

Conventional Foodservice System

The conventional foodservice system is most common, although that is changing due to the current
operating environment. In conventional foodservice systems, ingredients are assembled and food
is produced onsite, held either heated or chilled, and served to customers. For this foodservice
system, food is purchased all along the food processing continuum. For example, some items may
be purchased from the none end and require full preparation. Other items may be purchased with
some processing, while others may be purchased fully prepared, only requiring portioning and
service.

Centralized (Commissary) Foodservice System

The commissary food service system (also known as central kitchen, central food production, or
food factory) centralizes food production, and food is transported to satellites (receiving kitchens)
where it is served to customers. Food usually is purchased near the none end of the food processing
continuum, and food preparation is done in the central kitchen, which results in lower food costs.
Labor costs also are lower because of the centralization of food preparation. This food service
system takes advantage of economies of scale, so it is most effective when mass food production
is required.

Ready-Prepared Foodservice System

The ready-prepared foodservice system has been in use for many years. In ready prepared
foodservice systems, food is produced onsite, held chilled or frozen, reheated, and served to
customers on site. Food production can be scheduled at any time, since food is prepared and stored
frozen or chilled for later re-thermalization and service. This system also allows multiple-day
production to be done at one time. For example, if chili is on the menu two times in the next 30
days, the total amount of chili can be made at one time, which reduces labor costs. For this
foodservice system, food is purchased all along the food processing continuum. For example, some
items may be purchased from the none end, and require full preparation. Soups, entrees, casseroles,
and sauces would likely be fully prepared on site from ingredients purchased at the none end of

II
the food processing continuum. Other items may be purchased with some processing, while others
may be purchased fully prepared, only requiring portioning and service

Assembly-Serve Foodservice System

The assembly-serve foodservice system traditionally has been the least common, although that is
changing due to the current operating environment. In todays environment labor is scarce and
expensive. Also, there are many choices in foods that can be purchased that only require heating
and serving. In assembly-serve foodservice systems, food is purchased at the middle to complete
end of the food processing continuum. The purchased food is stored either frozen or chilled for
later use. It is then portioned, reheated, and served to customers.

III
Appendix B: MICROBIOLOGICAL CONTIMINATION & HAZARD

The dangers of foodborne pathogenic microorganisms have been known for decades. The risk of
milk-borne transmission of tuberculosis and salmonellosis was recognized early in the twentieth
century, and control by pasteurization was an early intervention. Similarly, problems with botulism
were managed by controlling the application of heat to low acid foods in hermetically sealed
containers. Despite remarkable advances in food science and technology, foodborne illness is a
rising cause of morbidity in all countries and the list of potential foodborne microbial pathogens
keeps increasing. Furthermore, foodborne illness is a major cause of preventable death and
economic burden in most countries. Unfortunately, most countries have limited data on foodborne
disease and its impact on public health. It is only recently that the burden of food contamination
and foodborne disease have been systematically assessed and quantified.
The economic cost associated with foodborne diseases caused by microorganisms has only
recently been estimated. Major outbreaks are:

Salmonella persists as a major cause of food poisoning and its incidence is on the rise. Salmonella
Typhimurium DT 104 is widely distributed in cattle herds and is resistant to several antibiotics.
The incidence of this organism is on the increase, as is the number of antibiotic resistant isolates.
More than one third of people infected by this organism require hospitalization with approximately
three percent of cases being fatal.

Enterohaemorrhagic Escherichia coli O157:H7 has emerged as a significant foodborne pathogen,


and has been highly publicized through major outbreaks of disease. Other strains of
Enterohaemorrhagic E.coli (EHECs) pose a particular problem in that they are impossible to
differentiate culturally from other flora in the gut.

E.coli O157:H7 serves as an example of the limitation of the present knowledge and
understanding of many pathogens and how they contaminate food. In the past few decades a
range of microorganisms have emerged as potential causes of foodborne disease.

Campylobacter jejuni, Vibrio parahaemolyticus, and Yersinia enterocolitica may cause foodborne
illness. As microorganisms have the ability to adapt, modified modes of food production,
preservation and packaging have resulted in altered food safety hazards. For example, organisms
such as Listeria monocytogenes, have emerged and re-emerged because of changes in the way
high-risk foods are packaged and processed.

A range of protozoa and viruses may also infect food e.g. Cryptosporidium parvum, Toxoplasma
gondii, Clonorchis sinensis, Norwalk virus, and hepatitis A. The effective prevention and control
of these organisms requires widespread education and possibly new initiatives such as HACCP
being introduced at primary production level.

IV
Appendix C: DAVID GARVIN QUALITY APPROACHES

David Garvin presented a strategic framework concerning approaches to quality. There are five
methods to comprehend quality followed into:

The first major approach to the definition of quality identified by David Garvin is the transcendent
approach of philosophy, according which quality is synonymous with innate excellence or
moreover ideal form. The transcendent approach is the least understood and least utilized of the
five approaches identified by Garvin (Sower et al., 2005).This approach confronts the quality
cannot be precisely defined, but we know it when we see it, or are aware of its absence when it is
missing. In other words its about a product or service possesses excellence based on its subjective
relationship to some standard.

A product based views quality as a precise and measurable variable. According to this view,
differences in quality reflects differences in the quantity of some ingredients or attributes possessed
by a certain product (Mehta, 1998).It is worth to mention that an unambiguous ranking is possible
only if the attributes in question are considered preferable by virtually all buyers. Burgers, for
example can be ranked in accordance to the quality of ingredients mixed with minced meat and
other spices indicating it of higher quality.

A user based definition of quality simply means that quality is whatever the customer says or wants
which goes back to meeting or exceeding customers requirements and expectations (Mehta,
1998). Individual consumers however are assumed to have different wants or needs that is fitness
for use, and those goods that best satisfy their preferences are those that they regard as having the
highest quality. As per (Kelemen, 2003) marketers have done a great deal to identify the needs of
the customers through preference testing in order to sensitize the manufacturers to what is
significant for customers.

Manufacturing-based approach defines quality as the degree to which a specific product conforms
to a design or specification; where quality is defined as conformance to requirements (Crosby,
1979). It is generally accepted that if the production process are stable and reliable, quality is
inherent (Kelemen, 2003). Basically approach seeks to objectively measure the degree to which a
product or service complies with pre-determined specifications towards benchmarking.

The last is value- based approach that takes the cost reduction goal one step further. This
approach defines quality in terms of costs and practices according which a quality product is one
that provides performance at an acceptable price or conformance at an acceptable cost (Garvin,
1984). Basically this approach assesses quality in terms of costs and benefits that the more
benefits outweigh costs, the more a product or service increases in value by a degree of
excellence at acceptable price.

V
Appendix D: FOOD SECURITY PROGRAM

Safety food programs can be set as the measures to be taken to ensure that food can be eaten
without adversely affect to the consumers health. These measures aim to prevent food
contamination. The programs commonly used in this area are Good Manufacturing Practices
(GMP), Hazard Analysis and Critical Control Points (HACCP), Hazzard and operability Study
(HAZOP) and British Retail Consortium (BRC) frequently found in the food industry, are
obligatory by law, and others are implemented voluntarily by the food chain members.

Good Manufacturing Practices (GMP):

The Good Manufacturing Practices program is composed of a set of principles and rules to
be adopted by the food industry in order to ensure the sanitary quality of their products. The rules
establishing the Good Manufacturing Practices involves requirements for industrys installations,
through strict rules of personal hygiene and cleanliness of the workplace to the description in
writing form of all procedures involved in the product. These standards are characterized by a set
of items summarized below.

The projects must meet requirements to ensure food safety, such as the installation of devices to
prevent the entry of pests, contaminated water, dirt in the air, and still be designed to avoid the
accumulation of dirt or physical contamination of food that is being manufactured. The equipment
of materials used in industrial processing should be designed from materials that prevent the
accumulation of dirt and must be innocuous to avoid the migration of undesirable particles to
foods. On the production line, the procedures and steps for handling the product have to be
documented, in order to ensure the standardization of safety practices. Also running records should
be implemented as evidence that the job was well done. Otherwise, the cleaning and sanitizing
phases are inherent to the processing and handling of foods, and thus programs for execution on a
routine and efficiently must be implemented. Similarly, is required a plan for integrated pest
control in order to minimize access vector and reduce the number of possible focus of insects,
rodents and birds. Regarding food handlers, the GMP recommend that training should be given
and recycled so the concepts of hygiene and proper handling are assimilated as a working
philosophy and fulfilled to the letter.

A control of raw materials should be developed with suppliers, not only in the laboratory, but in a
gradual and continuous improvement work, where food security is split with suppliers. Guidelines
for the safe packaging of raw materials, inputs and finished products should be followed and
extended to the storage and loading area, and to the transportation that reach the consumer. The
Good Manufacturing Practices have wide and effective application when all the elements cited are
effectively deployed.

VI
Hazard Analysis and Critical Control Points (HACCP):

HACCP is a system based on prevention of hazards to the industry to produce safe food to
consumers. The HACCP involves a complete analysis of the dangers in the systems of production,
handling, processing and consumption of a food product. HACCP is widely acknowledged as the
best method of assuring product safety and is becoming internationally
recognized as a tool for controlling food-borne safety hazards.

In short, this system has a systematic and scientific approach to process control, designed to
prevent the occurrence of failures, ensuring that the controls are applied in processing steps
where hazards might occur or critical situations. For this, the HACCP system combines technical
information updated with detailed procedures to evaluate and monitor the flow of food into an
industry.

Generally the HACCP system initially involves the creation of a multifunctional team, supported
by senior management of the company, and the characterization of all food products that will be
included in the system. Also Good Manufacturing Practices (GMP) is universally accepted as
prerequisites for the implementation of the HACCP system and therefore should be consolidated.
Only then each step of the production process of a product will be analyzed for the possibility of
a chemical, physical and microbiological contamination. Thereafter preventive measures are
described and identified the Critical Control Points (CCPs). For each critical point is necessary to
establish critical control limits, which allow the monitoring of hazards. As there is always a
possibility of failure, it is essential to provide corrective measures in order to ensure the process
return into a controlled situation. It should also establish procedures for verification of CCPs and
their respective records. After the HACCP plan drawn up, it is validation occur through discussions
among team members.

Finally, the HACCP plan is disseminated to the production employees and for those responsible
for assessing the products quality on the factory floor. Internal and external audits are
recommended for periodic maintenance and continuous improvement of the system.

Hazzard and operability Study (HAZOP):

The HAZOP concept is to review the plant in a series of meetings, during which a multidisciplinary
team methodically "brainstorms" the plant design, following the structure provided by the guide
words and the team leader's experience. The primary advantage of this brainstorming is that it
stimulates creativity and generates ideas. This creativity results from the interaction of the team
and their diverse backgrounds. Consequently the process requires that all team members
participate (quantity breeds quality in this case), and team members must refrain from criticizing
each other to the point that members hesitate to suggest ideas. The team focuses on specific points
of the design (called "study nodes"), one at a time. At each of these study nodes, deviations in the
process parameters are examined using the guide words. The guide words are used to ensure that

VII
the design is explored in every conceivable way. Thus the team must identify a fairly large number
of deviations, each of which must then be considered so that their potential causes and
consequences can be identified. The best time to conduct a HAZOP is when the design is fairly
firm. At this point, the design is well enough defined to allow meaningful answers to the questions
raised in the HAZOP process. Also, at this point it is still possible to change the design without a
major cost. However, HAZOPs can be done at any stage after the design is nearly firm. For
example, many older plants are upgrading their control and instrumentation systems.

British Retail Consortium (BRC):

The British Retail Consortium (BRC) is the leading trade association for UK retailing. Although
BRC food safety standard began in the UK, it is now recognized as a global standard. BRC initially
developed its global standard for food safety in order to help the food industry meet legislative
requirements for the food safety acts.

VIII
Appendix E: QUALITY MANAGEMENT SYSTEMS

ISO 9000 series:

In terms of quality control there was difficulty to unify standards that ensure that a product had
been manufactured under quality criteria, after several trials, in 1989, was published the standard
ISO 9000.The requirements of the series represented the consensus of different countries of the
world. More specifically, ISO-9001 deals with the requirements of the quality management system
for an organization to produce compliant products and get customer satisfaction. Within the rules
of the certification ISO 9001, there are specific requirements regarding the responsibility and
involvement of management with the quality system, requirements for preparing and controlling
of the documentation, for the critical analysis of contracts and selection of suppliers, to traceability
and processes control, for measurement, for inspection and testing, analysis of nonconformities
and for continuous improvement, for audits and training.

ISO 22000 series:

Aiming to harmonize the international level, the various guidelines related to food safety
systems, it was developed the ISO 22000:2005 - Food Safety Management systems - Requirements
for any organization in the food chain. This applies the principles of a plan Hazard Analysis and
Critical Control Points (HACCP) programs along with prerequisites, such as Good Manufacturing
Practices (GMP). The standard has a similar format to the standard of ISO 9001 Quality
Management. This similarity allows organizations to implement the specifics of food management
system integrated to the quality management system. In this context the ISO 22000 presents as fact
the benefits of being recognized internationally, to apply to all elements of the food chain and fill
for the food sector, the gap between ISO 9001 and HACCP. The ISO 22000 standards specifies
the requirements to a safety management system that combines elements of food management
system to ISO 9001 templates, as already said, and interactive communication, since
communication along the supply chain is essential to ensure that all relevant safety hazards of food
are identified and controlled. The ISO 22000 considers that the safety of food is related to the
presence of hazards in food at the time of consumption. And because of the dangers that can occur
at any stage of the supply chain, the security must be ensured at all levels of the supply chain. So
it should be applied to producers of animal feeds and other agricultural products, food
manufacturers, packaging, transportation and food warehouses to suppliers of retail and food
services.

Halal food certification:

Halal Food certification is the permit grant for the materials that are according to the Sharia
(Islamic Law). Forbidden, including the categories of unslaughtered carcasses, Swine and
intoxicants including Alcohol.

IX
SIND ACT NO. V OF 1973
THE WEST PAKISTAN FOODSTUFFS (CONTROL) (SIND AMENDMENT) ACT, 1973.
[29th June 1973]

An Act to amend the West Pakistan Foodstuffs


(Control) Act, 1958, in its application to the Province of Sind.

WHEREAS it is Expedient to amend the West Pakistan Preamble.


Foodstuffs (Control) Act, 1958, in its application to the Province
of Sind, in the manner hereinafter appearing;

It is hereby enacted as follows:- Short title and


commencement.
1. (1) This Act may be called the West Pakistan Foodstuffs
(Control) (Sind Amendment) Act, 1973.

(2) It shall come into force at once

2. In the West Pakistan Foodstuffs (Control) Act, 1958, in Addition of section


application to the Province of Sind, hereinafter referred to as the 9-A to West Pakistan
Act XX of 1958.
said Act, after section 9, the following new section shall be
added, namely:-

9-A. Notwithstanding anything to the contrary contained


in section 6 and 9, term of imprisonment for offences
relating to ration document shall be not less than one
month,.

3. For section 10 of the said Act, the following section shall Substitution of section
be substituted, namely:- 10 of West Pakistan
Act XX of 1958.
10. (1) No Court shall take cognizance of any offence
Cognizance punishable under this Act except on a report, in
of offences writing of the facts constituting such offence, made
and mode of by a person who is a public servant as defined in
trial.
section 21 of the Pakistan Penal Code (Act XLV of
1860).
(2) Government may, by notification, direct that all or any
of the offences or class of offences shall be tried in
summary way in accordance with the procedure
prescribed by Chapter XXII of the Code of criminal
Procedure, 1898 (Act V of 1898),.

4. The West Pakistan Foostuffs (Control) (Sind Repeal of Sind


Amendment) Ordinance, 1973, is hereby repealed. Ordinance IX of 1973.

1
SINDH ACT NO.IV OF 1995

THE SINDH PURE FOOD (AMENDMENT) ACT, 1995.

[27th September, 1995]

An Act to amend the Sind Pure Food Ordinance,


1960.

WHEREAS it is expedient to amend the Sind Pure Food Preamble


Ordinance, 1960, in the manner hereinafter appearing:

It is hereby enacted as follows:-

1. (1) This Act may be called the Sindh Pure Food Short title, extent
(Amendment) Act, 1995. and
commencement.
(2) It shall come into force on such date as
Government may, by notification in the official
Gazette, specify.

2. In the Sind Pure Food Ordinance, 1960, hereinafter Amendment of


referred to as the said Ordinance, in section 2 Section 2 of W.P.
Ordinance No.VII
of 1960.
(i) in clause (9), the existing Explanation shall be
numbered as Explanation-1 and thereafter the
following new Explanation shall be added:-

Explanation-II iodized salt shall or the


purpose of this Act be considered as food either
consumed alone or as an ingredient in other foods

(ii) After clause (14), the following new clause shall be


added:-

(14-A) iodized salt means edible common salt


(namak) to which potassium iodide has been
added, for the purpose of fortifying or enriching it
as a means of preventing iodine deficiency and
disorder, in the manner and quantity as may be
prescribed.
SINDH ACT NO.IV OF 1995

THE SINDH PURE FOOD (AMENDMENT) ACT, 1995.

3. In the said Ordinance, in section 37 Amendment of


Section 37 of
(a) for clause (e), the following shall be substituted: W.P. Ordinance
No.VII of 1960.
(e) prohibiting or regulation the use of any
particular matter or ingredient

(i) in the manufacture or preparation of any food;


(ii) as a food.

(b) In clause (f), between the word food and the word
shall the words including iodized salt shall be
inserted.
APPENDIX E: QUESTIONAIRE

1. Define the form of food purchasing in accordance to the food processing continuum-FPC
a. No prior processing (raw/none) c. Processed( complete/end)
b. Mid-range(frozen)

2. Define your Food Service System- FSS


a. Conventional Food Service c. Ready prepared Food Service
System System
b. Centralized Factory Food Service d. Assembly serve Food Service
System System

3. Define quality in terms to principle approach to Garvin:


a. Transcendent quality d. Manufacturing based quality
b. Product based quality e. Value based quality
c. User based quality
4. Quality is the measure of customer satisfaction, who are you? as a customer with your
supplier?
a. Internal customer b. External customer

5. How do you measure your speed of performance?

6. In order to avoid stock out frequency, how you measure your fill rate?

7. What if the demand planned for the material is late or not timely delivered, how you adjust
the malfunction recovery?

8. The items ordered are one off time/ on time delivery or scheduled delivery.
a. Working days ( only business days)
b. Calendar days (all days in a month including weekends and holidays)
c. Promise date( date the supplier committed to meet)
i. Original promise date ii. Revised promise date
d. Required date ( delivery date needed by the customer)

9. What quality audits/ ISO standards followed by you?


10. What is the supplier rating system at your end?
11. Does your restaurant prefer a policy of having few suppliers or many suppliers?
12. How much visibility has been provided to suppliers by sharing information about forecast
and change of plan?
13. We can also ask how whether they are using technology such as EDI, ERP in traceability of
supplies?
Appendix H: INTERVIEWS

Note: for the sake of ethical perspectives and commitment to the experts, only two of the
interviews are put forward:

INTERVIEW#01

1. Food purchasing system is processed/complete food processing continuum.

2. Actually McDonalds procurement system that is what we call the food supply chain
system, is based internationally, but in Pakistan we follow certain systems and that is first
the land law and then our own standards, we source our requirements directly from our
concerned supplier, so that we have an equality to taste in context to what we are serving
in all over the world, and what changes have been made with region culture wise. We have
certain supplier that provide us fully cooked food, that includes all the patties and frozen
items and only they need to be heated/ re-thermalized to a required temperature. Every
product has its particular time and temperature that we need to give it so that for even fries
and patty to fry to a certain time till it can be come to eatable and serving form. In our
restaurants, assemble-to-order supply chain is followed, that all the food is available in pre-
cooked form and only assembling is done that is for example for burger patty is cooked
and mayonnaise is placed with lettuce and other condiments as par accordance and quantity
of the recipe, that is no food processing work is taken place at our restaurants, neither
further food manufacturing. Only assembling is taken place that buns are toasted, patties
are re-thermalized on hot plate despite of being already cooked since they are at -180C
temperature, therefore the kitchen staff re-thermalized them to a certain form or either some
of our patties are grilled to a certain range of temperature and time like our fries require
7minutes to cook at 3500C and patties require 2-3 minutes at 2000C, for this measurements
certain timers are placed. We follow centralized purchasing and overall assembly serve
food service system, that is raw materials are procured, the products are reached to our
distribution centers-DC, both local and imported .Venus Pakistan is the distributor of
McDonalds and through our DC center, we transport our products to restaurants all over
the Pakistan that meets McDonalds expectation of cold chain management and with an on
time delivery.

3. Actually McDonalds overall global supply chain theme is quality at supplier. By


becoming our supplier, this is not an easy task and easy process, because our supplier needs
to follow certain quality audits on annual basis. Not just annually but also weekly and basis
by having each and every product tasted and tested , quarterly audit takes place in our own
labs for inspection of samples from suppliers. Our quality is totally being managed at our
suppliers end. Whoever the concern supplier is in the provision of protein (meat and
chicken) from backend as decided by the DC, a concern McDonalds inspection person is
present there that looks into the production process of protein for McDonalds. Our system
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that is from DC till to reach our customer, no quality check specifically is not done. Our
supplier checks and manages all the quality. Reaching in our restaurants, staff looks after
it that. Our theme is all in all of quick service restaurant that is we have a limited time
frame and have to serve the food to our restaurant customers in a time frame of 19seconds
as soon as the order gets punched. Therefore, we check our quality at initial stages with the
supplier, our DC and inspections persons.

4. Orders are directly placed to our DC where it handles all the items of supply. Ordering
cycle , inventory in hand , current usage trend of that product , current transient time of that
product , shelf time of that product , these all the factors that we measure before we place
the order to have an appropriate speed of performance.

5. Best thing to avoid stock out frequency is to carry the inventory. We have a certain buffer
inventory level developed and defined for each and every product that we need to maintain.
So in that way we are always able to avoid the stock out frequency and maintain back
orders by buffer stock usage and it totally depends upon the perishability of shelf life of
the product.

6. Normally malfunction does not happen in our system that we are very much vigilant to
manage to our inventory that checking the stock levels and contacting the DC about the
stock levels in order to avoid such scenarios. But yes, we can never say no to certain special
scenarios that cannot be denied resulting to malfunctions. Due to uncontrollable factors of
important shipment, due to catastrophic effect or natural malfunction it could not be on
time , uncontrollable factors makes the transient time a bit stretch and time elapsed goes
beyond the time line. Another factors with the DC is that container cases becomes damage
or it happens when while inspection it becomes damage, in order to have a clear and close
vision of it .All the scenarios are faced but here our inventory buffer supports us in such
malfunction scenarios because we have a massive volume of inventory .We are managing
the inventory in a such a way that what if we are facing with a small loss or damage of the
shipment or something happen unexpected or uncontrollable , we cover up easily it via our
buffer inventory levels already managed to cover up. All the loses either big or small are
covered via insurance.

7. For each and every restaurant we have certain scheduled dates for deliveries that is 2 days
in each week by our DC for each restaurant. And it is a particular schedule that is designed
and we are working 6 days in a week for delivery, opted and managed by our DC twice in
a week in accordance to requirements of the restaurants from Monday to Saturday opted
by our DC. Dates are completely scheduled that on for example Monday and Thursday we
are doing certain one region regions and on Tuesday and Thursday we are doing another
and so onwards to others. They are fixed and we dont change, unless change to certain

XIV
gazeted and religious holidays. A recent strategy happens resulting in a big malfunction
that our container size are 40 foot container and law has passed to stop all the vehicles that
bears the seized of 40 foot . This situation really hurt the inventory and speed of
performance mainly to our three restaurants located in DHA localities .Since our DC
transportation system are all in the commercial vehicle category of 40 foot, this made the
scheduled delivery shatter, low speed of performance, higher elapsed time so we push our
backup plans by raising the buffered inventory from all and recovering that by the normal
distribution.

8. McDonalds has its own standard to drive quality that is standard quality management
system - SQMS. Recently we have changed our standard to Food Safety System
Certification - FSSC22000 that is will be followed by 2018 onwards and the supplier also
will be in need to follow those too. Also with it McDonalds uses the HACCP (Hazard
Analysis & Critical Control Point) quality control system that is applied to keep food safety
and standards to a level and follow the highest quality as well .We have a system that the
products are required to conduct around 72 specific safety protocols that marks to total
2,160 safety checks and procedures monthly and turns down to 25,920 annually before
arriving to restaurants. If we talk about the protein every incoming shipment of the protein
that we get is tested for certain microbiological test like of E.coli, and then held until tests
return.

9. Overall rating system is depending on the quality provision and service level of our
supplier, the proper submission of the invoices, documents and shipments I accordance to
our proceedings and standards. Rating is a continuous process that our team keeps on
working on it to have quality and ideal supply chain mechanism.

10. We have only those supplier that meets our standards, we do have many suppliers for
different products and varies with product but we have 80-100 approx.

11. Suppliers are and connected via contact of DC and with our branches to have a visibility
clearly and to have a timely supply.

12. McDonalds international have own software called Merlin where all the suppliers are
registered. Actually McDonalds supplier are not only for one McDonald market, but they
serving to whole global market, so there are certain procedures that supplier need to follow
like supplier need to have their own WSI number worldwide, and also each and every
product of the supplier is registered to McDonalds overall system through our RIN
number, so we provide RIN numbers and WSI. So that way supplier registered globally
and any market can reach to our supplier after the approval of their regional head office

XV
and can have business, this is how we manage data of supplier and managing a uniformity
and quality to our system.

INTERVIEW#02

1. In TGIF and Burger King, everything that we purchase is fully cooked that is ready to
fry and ready to serve. As per the patty recipe, nothing raw production is done in our
restaurants. The patties are re-thermalized and some are grilled, certain other ingredients
and condiments are added like garlic, mayonnaise and cheese add to have the flavor factor
and the final product is ready. We have approved vendors where they the preparation and
the purchasing of the product is done. Mostly all of the items we use are imported. We
havent reached yet towards the local vendors. But we have talked to K&Ns, seasons and
Big Bird. We are developing some products with them. we do not give approval to the local
vendors not that easy due to the standard protocols of our brand are strict that it really very
difficult for the local vendors to follow those protocols, those are FSC-22000 and British
retail certification-BRC and the localized brands are in difficulty for its practically
implemented on ground levels. Our brand protocols do not give a room to any of the health
hazard or unsafety thing happen to any of the customers, that the in TGIF all the patties are
imported from Malaysia, UK and KSA. Fries are also imported from different regions. If
we try to do the things in a localized version there is such a big criticality with our brand
that the takes the ethical characteristics of the animals that how old the animal is? The
slaughtering is done after how long period passed after its birth? When was it slaughtered
how long the blood was led to flow out of the animal? Feeding and environmental tactics
also for the people who are looking after it are following the hygienic protocols and what
if the females are working what flexibility has been given to them? This is the professional
food and safety standard that has to be done! In Pakistan, the local vendors do, not follow
this approaches, because these mechanisms require lots of investment. The reasons we
cater to all the health and safety protocols, the reason we are expensive. We have only two
options to follow, either we forward the demand only to those international vendors that
our brand has passed or if we need to work with localized vendors, they should be into our
certified standard. The main concern in the selection of the certified localized vendor is the
facility how they are preparing the chicken and what precautionary measures they are
taking. We have placed metal detectors that before packaging our material is passed
through it in order to find any iron or metal particles in the patty or raw material. So those
who are the alliance with us they have to put the metal detectors as well. In import cost
bearing is high, advance payments that all the flow of funds is transferred to them are used
with high lead time, and lead time can sometimes reach so high due to extrinsic and
catastrophic factors because the shipments are coming via sea which is the cheapest form
of transportation. Sometimes air transportation is also used. If we focus on the localized
vendors we can have worked of all over the calendar days and with a required date, but the

XVI
imported shipments are orderly on schedules delivery basis but turned on to revised
promise dates. Our chicken consumptions are around 50,000kg per month since we are
running 32 burger king and 2 TGIF branches. We are big volume players that why we get
lower costs of highly quality items.
2. We are not following any of the prescribed standards, our vendors need to follow the
protocols that are FSC-22000 and BRC. ISO 9000 and 21000 are localized. Our volume
and the quality protocols are our negotiation power.
3. We have done our own working on the trends that the forecasting has done on the
systems as well and manually also. In burger king we follow two things, one is the issue
list, the list and that bears the items issued to restaurants and our audit department that
measures the consumption of the respective items. Our strategy is the imported items in
the Burger King is 2-3months that is 90days at the time the inventory is running. This is
our buffer inventory since we have a one-month consumption and lead time is of 60-90days
so we keep a 60 days buffer inventory on hand that counts to a total of 90 days total
inventory.
4. For the malfunction recovery, we use the alter most approach. All the shipments being
done are via sea but the biggest drawback is the lead time. We do the procurement not on
the total basis of cost because the quality maintenance depends upon the cost up and down
of the product. Malfunction appears in the inappropriate forecasting that I have mentioned
we do the forecasting month to month and malfunction is recovered by the buffer stock
that we pit in already with the inventory. If malfunction happens we use the buffered stock
and in order to produce it again, we order at the same time twice to the vendor to deliver
the shipments. We have total three warehouses in Pakistan that is Karachi, Lahore, and
Islamabad. If the shipments docks are late we use the interdistribution transfer IDT / back
fridging-BF/ inter depot transfer that the stocks end at one warehouse so to overcome it till
the external shipment the demand is transferred.
5. The consumptions are on calendar days and purchasing is done on working days. We
have revised promise dates with the vendors .once the product is out in the sea, its our
fate then the delivery is on time or some disaster happen that makes the delivery late and
lead time becomes high.
6. All food item is imported. Non-food items like the packaging material is 70% imported
7. Supply rating system is based on the certified quality provider, liability factor bearer,
and flexibility in the provision of the material that is to be on time delivery.
8. Merlin software connectivity is with the international market with a reporting tool
called business intelligence but that snot user-friendly.

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