2.

0 Foodservice System that The Foodservice Operation Used

2.1 Foodservice Operation of Pizza Hut

Pizza Hut Malaysia employs a commercial foodservice operation, which operates on a for-
profit basis. It splits into several different commercial foodservice operation segments, such
as the quick service restaurant, casual dining restaurant, and fast-casual restaurant.

2.1.1 Quick Service Restaurant

Pizza Hut Malaysia is traditionally made up of quick-service restaurants (QSRs), commonly

known as the public's fast-food establishment. Quick-service restaurants are typically
operating as a restaurant chain or franchise business model that provides every restaurant
with standardized ingredients, partially prepared foods, and supplies through well-organized
supply chains. Commonly, the fast food is cooked in the kitchen, placed in the trays, and
passed to the customer, while the food is supposed to consume directly from the disposable
food packaging (Ha & Jang, 2013). A quick service restaurant's critical feature is emphasized
convenience, thus making the service level minimal, fast, and efficient. For instance, Pizza
Hut Express location offers a limited menu of foods at a relatively low price and rarely
provide table service. The menu items are prepared in 30 minutes because Pizza Hut utilizes
cooked to order system.

2.1.2 Casual Dining Restaurant

Pizza Hut is considered a large casual dining restaurant after the brand reposition from a
quasi-quick service restaurant. The reason for making this move is to improve the dine-in
experience of the customers. In 2005, several Pizza Hut stores began to utilize the concept of
Enhanced Dine-In (EDI). It creates a comfortable eating environment suitable for all age
levels to attract customers from sitting together to enjoy the meal and developing family and
friends ties with meals (QRS Brands Sdn. Bhd., 2006). There is a significant renovation from
menu offerings expansion and restaurant team uniforms to redesigning interiors and exteriors
with warmer and friendlier ambience. Pizza Hut restaurant provides a broader range of menus
and offers proper dining wares with knives and forks while keeping the menu reasonable. The
foods serve with waited table service, and a longer food preparation time is needed.
Furthermore, some Pizza Hut Malaysia stores begin to enhance the casual dining experience
with a digital concept such as augmented reality (AR) menu boards, greeting robots, tablet-
equipped wait staff, and digital takeaway kiosks to create a new commitment to customer
satisfaction (Low, 2017).

2.1.3 Fast Casual Restaurant

In recent years, Pizza Hut Malaysia has reinverted several casual dining restaurants with the
launch of Fast Casual Delco (FCD) stores by equipping with faster food preparation
equipment and several self-service features. The new, fast casual restaurant is a combination
of quick service and modern casual dining restaurant. The fast casual restaurant is driven by
is its upscale ambience and fairy prices of higher quality food. According to Whitten (2018),
the fast casual restaurant is much smaller than a typical Pizza Hut store and focuses more on
take-out and delivery service. Pizza Hut Fast Casual Delco stores provide limited table
service, and the food is served with disposable wares. The customers need to make their order
and pay first at the counter and then pick up food when it is ready. The store includes
incorporating an open kitchen, quick turnaround back-of-house kitchen systems, and semi-
serviced counter to enhance the speed of serving (Gal, 2019). To cater to pizzas' home
delivery, Pizza Hut has pioneered the idea of online ordering and delivery services on its
mobile app and website, and it also comes along with a rewards system.

2.2 Foodservice System of Pizza Hut

2.2.1 Centralized (commissary) Foodservice system

Pizza Hut Malaysia established the centralized (commissary) foodservice system,

characterized by a large, centralized production facility, transported prepared foods to service
units located in several remote areas for final preparation and service. Food is purchased from
the none end of the food processing continuum, and food is prepared in the central facilities,
resulting in a lower food cost (National Food Service Management Institute, 2002).
Centralized foodservice system operates on a large scale and specialized equipment generally
utilized by commercial food processing plants. This foodservice system also requires a
significant modification in recipes and food production steps.
2.2.2. Flow of process in Pizza Hut Malaysia

The concept of centralized buying and centralized warehousing is applied by Pizza Hut
(Shaikh & Qazi, 2019). There are two types of suppliers in Pizza Hut, which are the direct
suppliers (Pepsi Company, Bake Parlour Company, and Habib Oil Mills) and indirect
suppliers (local meat markets, vegetable markets and sauces companies). Pizza Hut
Commissary acts as a centre supplying vegetables, fruits, sauces, and meats to the restaurant
chains. At Pizza Hut Commissary, there are three types of food preparation sessions: dough
production, hot kitchen, and meat kitchen, thus making them into semi-processed foods.

The semi-finished products and ingredients stored in the warehouse are then
distributed to each Pizza Hut franchise stores in the chilled, frozen, or dry form by
refrigerated trucks. The installation of the Truck Temperature Tracking System is necessary
for to monitor temperature and maintain the integrity for cold chain. Additionally, the
explanation for utilizing the cold chain logistics and temperature-controlled vehicles is
because of a greater distance between central production units and foodservice sites and to
ensure the safe transportation and food safety of the raw materials (Shaikh & Qazi, 2019).
The foods are required to cook or thermalize in the receiving kitchen before serving to the
customers.

2.2.3 Advantages and Disadvantages of Centralized Foodservice System

Pizza Hut adopts a centralized structure to establish greater operational control over the
international franchises by standardizing the products and ingredients, which helps in
ensuring that standardized recipes are followed. The pizza dough, raw materials and kitchen
equipment were subsidiary supplied by the Pizza Hut to the stores owned by the company to
maintain the consistency of products quality control and customers’ experience at every food
service site. Another explanation is due to large scale production, and there is a need for
mechanization of preparation by using mechanized equipment to improve food production
efficiency and productivity. This foodservice system could minimize the duplication of
labour and equipment production.

With a centralized foodservice system, Pizza Hut can exploit its purchasing power
and have sufficient negotiation power for the best costs of the purchases. Bulk purchasing of
raw materials from the suppliers can encourage long-term cooperation and get more
discounts. In other words, lowering the average cost of production is the outcome of
economies of scale. The disadvantage of the centralized foodservice system is that there are
high initial capital costs for the construction of centralized production facilities, equipment,
and transportation costs. It is necessary to utilize specialized equipment during products’
packaging, storage, and distribution prepared by central commissaries. This can indirectly
increase the costs due to high costs of maintenance fees.

References

Gal, S. (2019, May 7). Pizza Hut Opens 400th Store in Central i-City Shah Alam. Malaysian
Foodie. Retrieved from https://www.malaysianfoodie.com/2019/05/pizza-hut-opens-
400th-store-central-city-shah-alam.html#.X8AXkGUzapo

Ha, J., & Jang, S. C. S. (2013). Attributes, consequences, and consumer values. International
Journal of Contemporary Hospitality Management, 25(3), 383–409.
https://doi.org/10.1108/09596111311311035

Low, M. (2017, October 10). Pizza Hut reinvents casual dining experience with all-new
digital concept store. HardwareZone.Com.My. Retrieved from
https://www.hardwarezone.com.my/tech-news-pizza-hut-reinvents-casual-dining-
experience-all-new-digital-concept-store

National Food Service Management Institute. (2002). A guide to centralized foodservice

systems.

QRS Brands Sdn. Bhd. (2006). QRS Brands Bhd Annual Report 2006. Retrieved from
https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download/?
name=EA_DS_ATTACHMENTS&id=130759

Shaikh, A. R., & Qazi, A. A. (2019). Centralized supply chain – Food Lord. Emerald
Emerging Markets Case Studies, 9(2), 1–19. https://doi.org/10.1108/eemcs-02-2019-
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Whitten, S. (2018, December 6). Pizza Hut execs “dissatisfied” with growth, brand has “a lot
of work to do.” CNBC. Retrieved from https://www.cnbc.com/2018/12/05/pizza-hut-
execs-dissatisfied-with-growth-brand-has-a-lot-of-work.html