OPERATIONS MANAGEMENT MINI PROJECT ON

PIZZA HUT
Introduction
The operations managements are the key path defining elements in any
business. It helps in determining the success or failure of the company.
Without set procedures optimal and accurate results cannot be obtained. The
operation standards at pizza hut have many sided challenges and
opportunities. In this mini project our group tried to analyse the operations
management of pizza hut and how it’s so successful in reaching its customers.
Pizza hut started on 1958. The dream of Frank and Dan Carney turned into
reality when he opened the first pizza hut in Wichita, Kansas. In very beginning
the restaurant was too small, it had just 25 seats available for its customers.
The pizza has superior place in the market, particularly for the Pizza business.
Through the time it has scattered into the markets of the world. Pizza hut is a
part of Yum, which is another big company. The Unique Selling Proposition of
pizza hut is their quality which is holding their customers till date.

Raw Materials:
The outlet that we choose have a very organised system. They get the raw
materials from 5 sources like Chaitanya cold warehouse from where they get
raw chicken and vegetables, Chaitanya dry warehouse from were they get the
beverages, PepsiCo from where Pepsi and seven up come and Ms. Bectors
from where they get bread. According to the manager 236 items are received
per week and among them 35 items of inventory are very important.

Machinery:
The bommasandra branch have a total of 10 machines out of which the
important ones are the dough sheeter and the pizza oven. For the backup
there are extra 2 pizza ovens and 1 dough sheeter. The pizza oven takes 6
minutes to bake a pizza it has a temperature of 245 degree. When the pizza
with all the toppings and requirement are placed in the oven after 6 minutes
the pizza is ready to eat. The manager adjust the time to 5 minutes and
increases the temperature during weekends to meet the demand.
Operation standards at pizza hut
1.Preparations:
The preparation is the process of getting things ready, that will help to
carry out the operations in store. This involves activities like defrosting of
dough, starters and cheese. So that can be used for the next day operations. If
the preparations for the following day operations are not up to the mark, then
that will cause the difficulty or shortage of items that are necessary for the
conversion process. The preparation is done based on demand forecast for the
next day.
2.Make table:
The job of the make table is to make orders that are received from
customers and appears on the micros system. The collection time is 10 to 15
minutes as compare to delivery time which is 30 to 35 minutes. The
preparations of make table is a critical part of the operations at pizza hut. The
right level of products, ingredients condiments and sauces are prepared to the
specifications. That is to be considered vitally that the make table items
character, aroma, freshness, and taste are appropriate and kept at right make
table temperature between 2 and 5 degree centigrade. There are set of rules
for pizza saucing and cheesing, if not followed then it can result in soggy or
salty pizza. This will cause customer dissatisfaction. So the rules are to be
followed.

3.Cut table:
The job of cut table is to receive the pizza and cut them according to the
order guest check and pouch them accordingly. The special consideration is to
be paid when pouching that the right order should go with right guest check.
Mainly the veg and nonveg pizza stickering should be done carefully. If it goes
with wrong order, then it breaks down the flow of the cut table and cause
mess up of the customer.
4.Dispatching:
 The dispatching is tricky and critical work specially when there are more
orders on the shelves and less drivers. But fortunately, this outlet which is in
bommasandra is free from this issue because compared to the delivery orders
the direct footfall of the customer into the store is maximum. So, the delivery
of pizza is minimum and is confined within a radius of 10km within the outlet.
Usually it takes less than 30 minutes to deliver the order to the customer, but
the timing standard vary according to the availability of work force and the
level of peak that business receive in a particular moment of time. However,
pizza hut doesn’t have the 30 minutes delivery strategy like dominos but it
always try to reach it customer in appropriate time.

PRODUCT STANDARDS:
The aim of any business unit is to achieve the complete operational standard
practices. The interview with the manager of pizza hut revealed the fact that
optimal strength is always utilized into the process to get the maximum results
and maintain 100% product quality standards. The manager added, “all dough
should be identified with an accurate timing system as it is very critical to good
dough management, good quality and wastage management.” He also adds
that the wastage control is very important to save overall cost of doing
business. He also believes that the wastage at the end of the day gives a big off
set to the profits. And it also noted from our observation that the waste is so
minimal in this outlet.
1.Defrosting:
The quality without waste is the driving force behind dough shelf lives and
timing system in pizza hut. The dough sheeter makes the dough like a sheet of
paper. The working staff attend the outlet at 8 am then they start preparing
dough in the sheeter machine till 8:45 from 8:45 to 9:45 it is kept in a machine
to get the puff like shape and then from 9:45 to 10:45 it is shifted to other
machine where it is stored around a temperature of 5 degree centigrade. Now
the main pizza base is ready and when the outlet opens at 11am the staff can
prepare the pizza according to the preference of the customer.
2.Topping standards:
Toppings should be spread carefully so that it reaches the taste.
Overlapping of the toppings, give a bad taste of the pizza and damages the
expectations of the customer. There is a 2-finger rule that is applied for
topping. Near the pizza making table there is a clear pizza specification chart
which is clearly divided into pan pizza veg and nonveg. This specification chart
helps to avoid the bad taste and unwanted usage of topping. This chart is a
very good and useful guideline to the staff.
3.Dating standards:
The dating standards are set for every ingredient used in the pizza hut.
The items are labelled with correct MRD (made, ready, discard) label. These
labels indicate the date made, date ready and the date discarded.
4.Product shelf life:
In order to maintain the product quality up to the standard, it is very important
to follow the set rules for the product shelf life. Different ingredients used in
the pizza making process carry different shelf life. The taste and the quality
highly determine on the freshness of the ingredients, and the resultant
happiness of the customers. The shelf life of the raw materials that are kept to
use is 4 hours.
The manager of the pizza hut mentioned that the company is
spending a huge amount of money on the product promotions and marketing
activities for the business. And, the company provides the training to the
employee to how to maintain the product quality. So, every single person
should have to ensure the quality of the product and happy customer makes
more return in the future. In this regard, company had got set procedures and
guidelines to maintain the standards for the specified interactions between the
employees and customer.

Food Temperatures:
To keep the products safe storage the temperature of freezers should be in
between -18 to + or -5 degree centigrade. The seals must be intact so that the
temperature can be maintained. First the raw materials are stored in the
refrigerator box with temperature of -18 degree and then after 3 hours they
are shifted to a room with a temperature of 5 degree. Here the raw materials
are stored in boxes labelled with MRD which is kept there for maximum of 3
days based on the dates on MRD. Bases are also stored in the room in sections
according to the sizes small, medium and large. The shelf life of bases stored in
the room is only 12 hours.

Quality Assurance:
The quality throughout the supply chain rests with the overall team. This is
done by setting extremely thorough and careful standards during product
development. In order to ensure the standards, there is regular auditing and
monitoring system in place. One of the regular systems to check quality is
CHAMPS excellence review. This review system is setup by the YUM company
the parent company of the pizza hut. CHAMPS stand for Cleanliness,
Hospitality, Accuracy, Maintenance, Product Quality and Speed of service.
Quality assurance is achieved through the complaints monitoring system and
their corrections through available remedial methods. According to a research
conducted pizza hut customers say that 31% of their decision to return to the
restaurant is based on the quality and consistent of food.

Core Competence:
The pizza hut has got high degree of core competence in the basic product. The
pizza hut’s dough is treated as the core competence of the business. This
makes pizza hut different from the competitors. The main competitor to the
outlet that we choose is Domino’s pizza which is in less than 1km from the
outlet. But pizza hut through its unique quality has been attracting customers
over the time.

Cost & Variance:

The cost of sales and the sales revenue are the actual things that support the
managers to run the business on track. If the number seems going out of the
track they need to be highlighted and called as variance. We know that
variance is the difference between the actual cost and theoretical cost.
According to the information given by the store manager the revenue of the
financial year 2018-19 is 2.28 crores that is 63000 per day. The productivity
growth of this outlet is 16%.

Wastage:
There are several reasons for wastage of food during the operations
conducted. However, if the forecast made is not effective then the chances of
unexpected results may increase. If the product is defrosted without realizing
the demand for the product then this may cause one of the potential
wastages. But according to the store manager the wastage is minimal in this
outlet that is they manage the raw materials efficiently.

Forecasting:
Forecasting the estimated demand is the real start of every single operational
activity in the business unit. This involves everything from human resource
planning to product planning. Demand forecasting in this outlet is done by
calculating stock in hand and the consumption rate of last three weeks that is
last three Mondays. Forecasting is very important element to carry forward the
business in a smooth way without any disturbances. If everything goes as
planned there will be no problem, but demand can also increase because of
the good weather, special occasions like festivals. According to the manager
the demand is high in the start of the month but that usually slow down in the
end of the month due to less availability of the funds with the customers. The
manager also added that the sales moderate and even slow during Monday to
Thursday and very high from Friday to Sunday.
Employee Performance and Training:
There are a total of 21 employees working in that outlet as said by the
manager which includes 15 pizza working staff, 3 managers, 1 store manager,
and 2 security guards. The employees work nine hours a day where they get
one hour of break. As mentioned by the manager the new employees are
trained in the head office in Marathahalli for a week and then they are sent to
the outlets where they have to train for 5 days that is they receive practical
training from the managers and co-workers which increases the employee
efficiency. The qualification of the employees must be 10th pass and the
language preferences are Kannada or Hindi or English. It is also mentioned by
the manager that no part time jobs are provided for the students in this
branch. And he also added that no extra pay is given for the overtime work
they provide only incentives. If an employee gets good customer feedback
various incentives are provided to him/her like gifts and recognition in monthly
meetings.

Location Issues:
The pizza hut outlet is in bommasandra, electronic city it has no issues.
Because it is an industrial area and the staff come there often to part or have a
good time and the branch also get many delivery orders. As there are many
colleges and schools near it, pizza hut became a hangout place for youth.

Importance of Customer Experience:

Customer care is the core point of the concentration behind the business. Pizza
hut treats the customer as king. The most important fact is to find out the ways
through which the customer wants can be fulfilled effectively. There are many
procedures and standards set by the top management in order to interact with
same way the brand does. They want to be treated well, respected,
understood and to get what they want, when they want it. In other words they
simply want a good experience and the reassurance of knowing that they will
have the same good experience every time they come into contact with the
brand.
Pizza hut is selling pizzas, but this is what other competitors have been doing.
So, what makes it special about it? The product alone is nothing, but the
service is also important. That is the factor which makes customers as repeat
customers. The attitudes, values make key differentiations. As per the
managers information in order to achieve desired results the team members at
Pizza hut are provided with a set guideline for the interaction with customers.
The guideline is called Moment of truth or customer mania plus.

Moment of Truth:
1.Order taker:
The order taker is the key person who works as a bridge between the company
and the customer. Is he/she makes customer happy, the business will likely to
repeat otherwise can drain to the competitors. This result not only the loss of
the customer but also the loss of several networks of the lost customer.
2.Response:
The management should respond to the customers in no time in order to
satisfy them. The food must be delivered hot and the service delivery must be
efficient. The feedback must be taken from very customer in order to
understand the taste and preferences of the customers.
3.Delivered on time
4.Delivered completely.
5.Invoiced correctly
6.Undamaged products to be delivered.
There should be every reason for the return of the customer. Without
fulfilment of the expectations that will not be possible. However, the team at
pizza hut follows the guidelines and makes customers happy, but there may be
several factors that may cause to the dissatisfaction. In general, the possible
factors may be for instance, rush of customers and not enough staff available
to take orders or to pick up a phone, late delivery or the rude attitude. The
manager of the store added that customers don’t come to Pizza hut just for the
food they can get food anywhere, what most customers want when they visit
is a good time.

Marketing:
The marketing plays very important role for the business. The customers
receive message though marketing, thus it become very critical that the
company should highlight the customer expectation in the marketing message.
The company invest considerable resources to find out the exact wishes of the
customers. According to the pizza hut manager the database says that the
primary customer are teens and young adults. The main marketing in this
branch is done by proving pamphlets door to door or sending text messages to
the registered customer number attracting them with exciting offers. And the
other way is giving ads in the newspaper in the form of pamphlets. These are
some of the marketing strategies followed by pizza hut.

Product Development:
The pizza hut success is not the matter of isolated activities. But it is the
company’s restless efforts to put innovations into the realities by turning needs
and wants into the shape of products. Product development ream run focus
group to study the consumer behaviour towards product choices.
Sometimes product is launched after having selected study of the chosen
sample, but it does not survive for long time. This may cause occurrence of
cost or the wastages to the stores. For instance, the four for all, cheesy bread,
Bombay wings, Indian pizza are all the examples of failed products. However,
the company has launched successful products as well. For instance, cheesy
bite pizza which has cause around 24% increase in pizza sales overall.

Conclusion and Recommendations:

The operations management shows the performance of each individual unit
that is participating in over all acceleration of the engine of business. The
business may have sometimes low speed and high speeds. It highly depends on
the strategies that the top management set for the business and the way the
strategies are followed by the key components that tun the actual business.
The operations at pizza hut have multifaceted situations. Each component
working in the process cycle of business plays equally important role to win the
customer. However, if any one of the units deviating from the set standards it
will cause a variance in the performances to overall. Thus, it is concluded that
the success of the business is possible through collections of inputs from all the
units participating in the conversion process to the delivery of output which is
simply called operations management.