Report

on
“Operational Management of PizzaBurg”

MGT314
SEC: 20
Fall’2018
Submitted To:
Wasif Sayed Choudhury
Lecturer, School of Business and Economics
Department of Management

Submitted By:
K M Tanvir Ahmed
ID-1612825630

Date of Submission – 13th December, 2018

Executive Summary

PizzaBurg started their journey in 2017 by opening their first branch in Mirpur. After
tremendous success in Mirpur they have recently opened a second branch in Uttara.
PizzaBurg is mainly a Pizza-based restaurant. However, they serve burgers, shakes and
fries too. They collect their raw material mainly from local suppliers such as Bengal Meat,
Mirpur Chicken House and for vegetables they prefer Kawran Bazar. The main attraction
of their pizzas are the cheese. They use verity of cheese in their pizzas. Some of them
which they import (e.g. Cheddar Cheese) and buy other verities of cheese from local
suppliers.
The report is focused on five key topics related to PizzaBurg. They are Process Layout,
SCM, Inventory Management, Forecasting and Quality Management. We have briefly
described each topic throughout the report and by the end of the report the reader will
have a clear idea on how the operations are run at PizzaBurg. The virtue of PizzaBurg is
to insure quality and build a firm customer relation. They believe by gaining the customers
trust and insuring the best quality can lead any food chain to greater success. PizzaBurg
started from zero. A small Pizza place in Mirpur and now they have two branches another
one located in Uttara. They are planning to open their third branch in Dhanmondi.
Company Overview

PizzaBurg is a local emerging Pizza focused restaurant. They started their journey in
January 2017. It is located in Mirpur 2 and they have opened a brand new branch in Uttara
recently. Their primary focus is on Pizzas. However, they have burgers, shakes, fries on
their menu. The owner of the place is Mir Mehadi. He studied in Marketing from North
South University. After graduating, he started Pizzaburg in Mirpur. Since then it has been
able to build a solid reputation among the local customers. Pizzaburg focuses on their
quality of food and building a good customer relation. Their main attraction on Pizzas is
the cheese. In their pizzas, they generally use Cheddar and Mozzarella cheese. They
provide the cheesiest pizzas among other pizza-based restaurants. They believe that by
building a good customer bonding is the key to success.

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Industry Analysis

Political Factors: politics is unavoidable no matter where you go. The entrepreneur at
the pizza burg absolutely recognizes this fact. According to his philosophy, how you
handle politics is the main factor. One can either use it for their own advantage or the
other way around. And as long as you know how to deal with it, it is a nothing problem.
So far, they have been very successful.” To make lemonade out of lemons.” That’s the
way to go.
Economic Factors: They have mixed feeling about the overall economy of Bangladesh.
Since venture capital is not really thing in Bangladesh it is very difficult to gather fund and
get the much-needed early push. That said the economy is not totally a negative thing.
There are some other economic factors that are rather a blessing for them. Because this
is a growing economy, it is much easy to achieve enhancement and gain competitive
advantage. The regulations are lot less strict than other parts of the world. There are also
some help in term of subsidies and tax discount as well.
Social Factors: The society of ours also comes as a blessing to their business.
Throughout every year we have so many occasion and festivals. There is Pahela Boishak
to start with. And there are two Eids and Pujas etc. All these adds up to already booming
sector. On the other the trend is changing. Earlier people used to eat Thai or Chinese
food and now they are more leaning toward pizza, pasta, sushi etc. and to further
accommodate this changing trend, the buying power of people is also rising which is
perfect for their industry.

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Technological Factors: Technology is also playing a major factor. Because of modern
day globalization and access to the highly improved Chinese market the equipment is
much easier and cheaper to get. Also because of the advance of social media and other
communication technology it is very easy for them to do promotional and other business
activity. “This is really a fun and easy time to do business” says the owner.

4Ps

Product: Serving quality

pizza is their focus. They are
mainly of chicken beef or
vegetable variants. There is
also special unit for the
specie lover as well. Other
than pizzas they also serve
Burger, pasta, coffee and
crushers.
Promotion: As for
promotion, they are doing
exactly what Marlboro stared
doing back in 60s. They Use
peer leader approach. And by
doing so they have managed to
reach a large number of customers through very little effort and time. For example, they
have partnered with Manchester united supporters of Bangladesh and it has been a good
hangout place for them as they receive discount match time and all other facilities. Their
main philosophy is to treat them like they are families. Because at the end of the day word
of mouth matters.
Placement: As of now there only outlet is at Mirpur. They have also set up their second
branch at Uttara expecting to open at the end of December.
Price: Their goal was to serve quality pizza within affordable price range. So, their pricing
is although not cheap but not at all expensive. In fact, their price is lower than other
competitors like pizza hut, Sbarro pizza etc.

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 Process Layout and Mapping

Supplier 1 Supplier 2 Supplier 3 Supplier 4

Purchase Department

Quality Control

Production
1.Making Dough
2.Process the Dough
Quality control

3.add sauce
4.add chicken/beef
5.capsicum
6.mashroom

Final Quality Check

Serve the customers

As we can see the purchase department buy from their suppliers of different goods like
Cheese, chicken, beef, vegetable and other groceries. Then the Quality control
department checks out to make sure everything is in order and of expected quality. When
done, they move on to their production

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 The production process begins with making the dough. After which they process
that to by putting it in the facility in order to make it useable. After that several units of
employee do their specific assigned task such as adding sauce, chicken, mushroom,
paper, capsicum mushroom. This whole process is totally monitored by the quality control.
Each of this task starting from making the dough all the way down to serving the customer
are all divided in each unit where each employees are placed.
When all these are done the quality-control make a final check with the cheese to
make sure it has put together properly. And now it is ready for the customer to enjoy their
delicious pizza.

Supply Chain Management

PizzaBurg is a growing restaurant, which understands the taste of young generation in
terms of food, interior design and pricing of the food. PizzaBurg maintains a very stable
supply chain management, which helps them to achieve a very good customer
relationship as well as supplier relationship. PizzaBurg serves different types of pizza and
burger.
So first they purchase their raw material from different location on the basis of
reasonability, availability and quality. They mostly use imported cheese and has some
local cheese suppliers. One of them is ‘Cheese Express’. Their meat supplier is Bengal
meat. They have some limited supplier from where they get their raw material. They
maintain a very good supplier relationship for the sake of on time material delivery,
reasonable pricing and quality products.
PizzaBurg set their menu according to the demand of their customers. Their production
system is daily basis. Production starts when order comes. Once the order is placed, they
assign their worker according to their efficiency so that they can finish the order on time.
Customers are given a particular serial number to receive their food right after placing
order. After finishing the work worker notify their customer to take the food according to
the serial. They claim to serve their order within 15-20 minutes. Their quality controller
always check their food before serving it. They have divided their production system into
many sections as a result the total outcome is very fast as well as it increases workers
efficiency. Their customers are mostly the teenager middle class people. They provide
home delivery service as well.

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Such as Toyota production system, PizzaBurg believes in standardization. They try to
maintain their food quality and always believe in serving the quality and standardized
product.

Vegetable
Suppliers

Supply Restaurant Customers

Cheese Inventory
Collector
Suppliers

Beef/Chicke
n Suppliers

Bullwhip effect
PizzaBurg hardly suffer from bullwhip effect as they start their production after getting
order from their customers.

Supplier relationship based on Kraljic Matrix

According to Kraljic matrix, PizzaBurg suppliers are segmented in four categories based
on Financial Risk and Supply Risk:

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 LEVERAGE STRATEGIC
• Furnitures • PIZZA OVENS
• Decoration • kitchen
Items chimney

ROUTINE
• Vegetables BOTTLENECK
• Meat/Chicken • Pizza pans
• Raw material

Here, the X-axis defines the Financial Risk and the Y-axis defines the Supply Risk.

Supplier relationship based on Sako trust model

PizzaBurg collect their raw material from local market. They have built a goodwill trust
with their local suppliers. They have a firm relation with all of their suppliers. They always
collect their cheese from a local dealer called “cheese express”. They are dealing with
“cheese express” since their establishment. They have been supplying PizzaBurg fresh
quality cheese at a good price. Company like Bengal meat supplies beef to PizzaBurg.
They have chosen Bengal meat because they do not compromise with their meat’s
quality. And they collect chicken meat from Mirpur Chicken House. PizzaBurg collect their
vegetable from “Kawran Bazaar” but they have to go to different vendors on the basis
availability and quality
.

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Effectiveness of supply chain
To achieve effective supply chain PizzaBurg adapt the standards of SCOR. They have
performed the following steps:
Plan: First PizzaBurg make plans about the collection of raw material then they allocate
the raw material according to customer demand and order.
Source: They find their source of raw material. PizzaBurg collects their raw material from
local market and they prefer to collect the raw material from the selective supplier.
Make: Their production system is divided into some steps so that they can make their
food efficiently.
Deliver: They deliver their food on time and they have delivery service as well inside
selected areas of Mirpur. PizzaBurg always keep in touch with their customer.

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Inventory Management

PizzaBurg mainly focuses on B2C business. Their main customers are the end users who
regularly visit their restaurants in different branches. These consumers are of different
ages though their target market is young generation. The Inventory management system
they follow is Just In Time system. They also have other inventories like raw materials
e.g. (wheat flour, vegetable, chicken,
beef, packaged mushrooms, black
Olive, frozen items like cheddar
cheese, Oreo and KitKat) the only work
in process inventory they have is
(Pizza dough) that is made before
hand to serve the customers on time.
They rarely have finished good items
as most of the foods are rotting food
items. PizzaBurg has a strong and
trusted supplier base. Most of the
vegetables they collect are from the
famous importers from kawran bazar.
They collect chickens from Mirpur chicken house and beefs from Bengal meet. The
expected demand actually varies time to time. In summer, March is the pick hour for
them. PizzaBurg sells the highest number of units that time. On the other hand, rainy
season and winter are the dull season for their sales. Inventory and purchase manager
do the forecasting for the quantity needed. As per forecasting estimated amount of
materials are proposed to the suppliers. Suppliers serve the quantity accordingly. If the
suppliers fail to provide the required quantity, they try to manage from other local
suppliers. In that case, supply risk is very low as wheat flour is very cheap and available.
Financial risk they had is with the cheese vendors because of quality factor. They collect
a handmade local cheese known as cheddar cheese to be very costly and sometimes
have to pay extra for it. PizzaBurg do not follow EPQ or EOQ models for the optimum
quantity. Rather they follow PPF (production possibility frontier) for the best output.
However, surprisingly the owner mentioned that to maintain an economics of scale and
fulfilling demand of more pizza orders. Sometimes they ask more quantity from the
suppliers. Though it increases fixed cost but it helps a lot to have a strong grab over the
market in the long run. Nevertheless, the question remains what is their efficient ordering
quantity. The owner replied 40 kg chickens as example would be the optimum quantity
for chicken in each branch. Other amounts he escaped for confidential purposes but he
added that the amount would be not more than 100 kg. Therefore, we can assume their
efficient ordering quantity is 100 kg.

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Considering the facts, we can say that PizzaBurg follows JIT inventory management
system. It allows WIP goods to be minimum. (Though every day, they had to incur a loss
of 600-700 BDT with extra pizza dough, which is ignorable). PizzaBurg is very responsive
day-to-day shifts in customer demands. They do not rely on computer schedules. (ERP
approaches). Most of the activity is pretty much standardized. Since it is the ideal practice
to maintain timing, quality and top-notch standards.

Forecast Estimated Suppliers

The Quantity are
informed
amount In hand

Pizza burg Suppliers Order local

places delivers suppliers if
order order fails

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Quality Management
In the food industry quality maintain is the most important element. If a firm does not
maintain the quality of its food, it could not survive in this competitive market. Quality and
taste of the food are the things that attract the customers the most. So, good quality
management is must for any company in the food industry. Usually, the manager of a firm
does quality management.
However, here for PizzaBurg, the owner of PizzaBurg controls the quality management.
He has given extra effort to maintain good quality pizzas. For doing so, there are
employees who check every ingredient of the pizzas. There are many ingredients of a
pizza. The main ingredient is the pizza dough. Every pizza’s dough is made in the kitchen
of pizzaburg under the supervision of quality checkers. After their approval, the pizza’s
doughs are used to make pizza. Then other ingredients are bought from only some
specific suppliers. Like, in meat section, beef bought only from Bengal meat to assure the
quality of the meat. And chickens bought from Mirpur Chicken House. Vegetables and
cheese bought only from a specific vendor whom they can trust to maintain the quality.
They always use fresh vegetables and meats for their pizzas. Which they receive daily
from their suppliers. They do not refrigerate anything to maintain the quality of the food.
Often they dump the unused doughs, which do cost them around 500-600 BDT per day.
Then the whole process of making the pizzas are different segments. Like, the doughs
are made by one group, another group wash the vegetables and meats, another group
cut vegetables and meats, another group put the cheese and others necessary sauces
and spices and lastly one group bakes the pizzas. A team, who check the quality of every
steps, monitors all these processes. If that team find anything wrong rather than expected
or the quality of the food not leading up to the mark, it will be dump immediately as waste.
After the whole process before serving the dish to the customers it is rechecked by the
owner itself to check the quality of the food and offer possibly the best foods to the
customers to satisfy their customers. From all of this PizzaBurg maintain their quality of
foods, attract the customers, and earn their trust to PizzaBurg’s foods

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Forecasting
PizzaBurg is on the verge of becoming one of the most famous Pizza-based restaurants
of Bangladesh. After the successful start in Mirpur they have opened their second branch
in Uttara. They believe in quality and teamwork with a commitment to customer
satisfaction. They have an experienced and hardworking team that provides the best
quality food and customer service. This is what helped them gain popularity locally in such
short period.

Employees
PizzaBurg has created a strong and stable culture in their workplace. They have a
fantastic bunch of hardworking people who play their roles responsibly and punctually. In
the two branches combine they have around 40 workers.

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 Employees
2

10
8

Manager
Steward
Chef
Counter Attendant
4
Public Relations

16

They have 2 branch managers, one on each branch. About 8 stewards. They have a ‘self-
service’ policy. However, the stewards are there to insure the food quality is perfect by
going table to table and asking customers personally. Around 16 chefs are working in an
organized fashion. Every one of them has a unique task. In the kitchen, they follow the
Toyota Productions 4th principle, the ‘Heijunka’ method. By leveling out the workload, they
get to serve Pizzas quickly. One makes the dough, another adds the sauce, and then the
next person adds toppings and so on. They have 4 counter attendants, two on each
branch. They have more than 10 Public Representatives. Their job is to capture the
targeted customers and market their restaurant online. As we know, there are different
groups such as Foodbank and Food bloggers. The PR team, promotes their foods and
replies to the reviews made by the customers. Simple yet a brilliant way to cut cost on
marketing.

Forecasting for production

The forecasting process of PizzaBurg is simple. They mainly follow a Naïve forecasting
process. So, if they sell 100 Pizzas in January, they forecast they will sell the same
amount in February and if the actual sell in February is 120, they forecast in March, 120
pizzas will be sold. However, sometimes they also follow the moving average forecasting
method.

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Suppose, they had a demand of 43 Pizzas in March 40 in April and 41 in May.

So, they forecast the demand of June by adding up the 3 most recent demands then
dividing them by 3. For example: (43+40+41) = 124/3 = 41.33 ~ 41. So, they assume
the demand of the month June will be 41 pizzas.

By following basic forecasting methods, it gets easier for PizzaBurg to purchase raw
material and maintain inventory. As they are, a restaurant and their raw material are
perishable they maintain a lower inventory and provides JIT service.

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Recommendation
PizzaBurg is an emerging restaurant of Bangladesh. They have gained much popularity
in a very short period. Most of their customers love their Pizzas because of the verity of
cheese and excellent toppings. Definitely, any cheese lover will fall in love with their
pizzas. However, we believe they need to lessen the amount of cheese on their pizzas.
Having said that, the use of various cheese is what stands them out from all the other
pizza-based restaurants. We would also recommend them to be unique in terms of interior
designing. We believe they can reach even greater heights if they sort out these details.

Conclusion
This report represents the operation management of PizzaBurg. Their operational
process is described elaborately starting from their process mapping, supply chain
practices, inventory management, forecasting process and quality management. These
practices are done at a regular basis to accomplish their goals, capturing the market,
ensuring the quality of their food and gaining customer trust. From their baby steps they
have come a long way and hopefully if they continue to build such strong customer
bonding and maintain the quality of their food, they will become a top tier pizza restaurant
of Bangladesh.

References
Liker, J. K. (2003). The Toyota Way. New York: McGraw-Hill Education.

PizzaBurg. (n.d.). Retrieved from Facebook: https://www.facebook.com/pizzaburgbd/

Stevenson, W. J. (2007). Operations Management. NY: McGraw-Hill Education.

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