PIZZA HUT

SUPPY CHAIN
SIDDHARTH MALBARI.
ROLL NO. 52
 Supply chain of pizza hut
Like many multinational competitors, pizza hut uses highly-franchised model
that helps maximize profit margins. However , pizza hut also own s pizza hut’s
supply chain services
(SCS), a subsidiary that supplies dough, ingredients, equipment and services to
the stores owned by company and franchises. This model allow pizza hut to
uphold quality standards and maintain consistency across franchised units, but
also provides the company with significant revenue stream.
Direct suppliers of pizza hut named as:
• Pepsi Company
• Bake parlour company (Buns)
• Habib oil Mills (First mineral water)
And all other material like cutlery,vegetables come from
their ware house named as “Commissary”.
•Meat market (Their own cattle)
•Vegetable market
• Sauce companie
 Purchasing of pizza hut
Pizza hut demands the direct material on daily basis. On every day
end the pizza hut manager forecasts the demand of next day and
gives the order to the suppliers than next day morning goods come
to pizza hut. All indirect material i.e vegetables, sauces, meat,
cutlery and all material is purchased by the ware house named by
“Commissary”. The material comes from warehouse by the trucks
on every Wednesday. Then pizza hut takes the orders from its
customers who come to pizza hut and also take orders from the
delivery service there is a specialized system in pizza hut which is
connected to delivery orders service so that 1 order list at a time
come in the kitchen and at the manager’s table also than
production of pizza according to order starts and they deliver it
within 45 minutes at the door of customer and in pizza hut they
just take 20 minute to prepare the pizza and serve it to the
customer.
 Logistic of pizza hut
*Distribution channels
The type of distribution channels are used by pizza hut is direct channel.
The direct channel is successful when there is an extremely large market
that is geographically demand in small cities like Sargodha, Gujarat, Sialkot
and Gujranwala. There other competitors are in this cities so if they will not
make there outlets there they will lose competitive advantages.
The other thing is there prices are high if they will lose there prices poor
people will also like to buy there pizzas and the house hold trend of food
will change after sometime, people will like to buy food rather than making
it at home.
*After implementing theses strategies they can get:
•Maximum return on their investment
•value proposition
•Expands their business growth
•Increase in sales
*The cross-functional and logistical drivers of
supply chain performance are:

•Facility
•Inventory
•Transportation
•Information
•Sourcing
Facilities:
Facilities are the actual physical location in the supply chain
network where product is stored, assembled or fabricated.
The two major types of facilities are production sites and
storage sites.
Commissionaires in Noida, Mumbai, Kolkata and Bangalore.
Inventory:
The base is prepared in commissionaires and then transported
to different retail outlets.
The outlet keep the inventory stock of only three days because
it is a perishable good.
Hence, the inventory stock cost is reduced.
As only the base is transferred to the store, in case of any
particular item demand is increased, it does not create any
problem.
Transportation :
They use the refrigerated trucks in which the base is kept and
there is controlled temperature.
There are 110 trucks to supply the bases across India.
There is also a vacant space in which extra base is kept to fill the
demand of a particular store.
The company will not incur any additional transportation costs as
the counters are along the highway or on the truck’s route.
Information:
There was no proper medium of coordination between the
suppliers and the out let managers.
This all happened because of customer database was not
maintained and outlet manager could not recall the need of
customer.
The cost got increased and they were not able to come across this
problem in the absence of proper information system.
Therefore, commissionaires were created.
 Operations of pizza hut
*Operation & production management of pizza hut:

Operation process started from 8am to 11am pizza hut gets

open for the production function only. From 11am till 3 at
night, customers are welcomed to come in and enjoy their
meal. Operation/production includes the preparation of pizza
dough according to the estimated demand.
All of the processes include machines and labor both. Each
dough is prepared by a single person but each person is
assigned to complete a single task in order to improve
efficiency.
The different size of dough is prepare to response the
requirements of customer. In third process, dough get backed. All
of three process include machine and labor both.
Each dough in not prepared by a single person but each person is
assigned to complete a single task in order to improve efficiency.
Till 11am , all the dough get prepared and rest of the pizza
preparation process i.e filling, topping and baking is done after
orders from customers. After receiving orders from customers.
After order placement of customers, preparation of pizza get
started and preparation time or serving time of customers order is
max 16 minutes. It does not depend on number of order or
number of customer. their ready dough helps them to make entire
customer satisfy in time. The work is done in way that one person
spreads sauce. other add veggies, other fills meat.
Till 11am, all the dough get prepared and rest of work filling ,
topping is done after customers orders.
The reasons are to estimate demand more carefully and not to
compromise on quality.
Pizza hut estimates demand on daily bases. demand estimation is
based on past experiences where changes of buffer also
considered and 10% buffer ratio is taken. Demand estimation is
done through the manual participation of the manager of
particular outlet. While estimating customer’s demand, both, the
home delivery orders of customers and those customers who used
to dine in, take into account. After the demand estimation,
operation process started.
STRATERGY OF PIZZA HUT
Pizza hut works on jit they order direct supplies according to
demand for just in time strategy they prepare themselves few
hours before
•All team members are prepared before pick hours with
vegetables required for toppings. they keep things ready in line.
Keep lemonade syrup ready so that they just have to 7 up when
the customer ask for lemonade.
•They be ready with different patties (pizza base)
•During peak hour they provide pizza making time 15-20 min
while there cycle of making one pizza is only 7 minutes. In
normal case they provide pizza making time 10-14 minutes.
This, they do so that the customer have food as early as possible
and their table gets vacant so that more and more customers are
served.
Quality Management Of Pizza Hut
To ensure rigid international bench-marks in the quality of the
products the services at all its restaurants across the world,
pizza hut has a secrecy shopper program in which an unknown
official visits a restaurant and evaluates it on certain defined
parameters called C.H.A.M.P.S. that stands for Cleanliness,
Hospitality, Accuracy, Maintenance, Product, quality and speed.
Base on the report submitted by the official, the restaurants are
rated and in the rare case of finding under performers, they are
kept under strict vigil. This is the most important for food chain
like pizza hut. All the employees’ back of-the-house i.e the
kitchen assistants are trained accordingly. They are given extra
classes in order to meet quality standards set by pizza hut
around the world. This strategy is important in order to satisfy
the CHAMPS. This strategy is strictly followed.
 IMPROVEMENT IN SUPPLY CHAIN
PERFORMANCE
 Implemented in pizza hut to fulfill the quality standards. Different quality management staff is also
there in pizza hut. The shift managers have the task to observe whether the quality standards match or
not, whereas there are a total quality management department at the main office in Gurgaon. This
department has the task to implement quality standards and know whether they are achieved or not.
 Pizza hut has worked a lot to increase the responsiveness towards customer’s demand. Few years
back they had some complaints from customers who ordered from home delivery service.
 Actually the pizza hut claims that where ever you live, your location does not matter, we deliver your
order with in 45 minutes to you.
 For this purpose they have designed their own software system at which they save the data (name,
contact and address) of customer who call attheir call centre to order pizza & enjoy the home delivery
service .pizza hut now tracks not only phone orders, but online orders and can track real time what
commercials people are watching and respond to.
 By sending another person pizza hut now successfully improves the flow of it supply chain process.
After the implementation of specialized software they have achieved :
 Maximum return on their technology investment.
 Provides the fastest time to value.
 Enables them to work with single vendor to reduce integration and implementation issue
 Is build by experts on foundation that expands as their business grows.
 Rapid time to value.
 Cost effective by this way they have improved their supply chain process.
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