Assignment on

supply chain management

INTRODUCTION

• Pizza Hut is one of the flagship brands of Yum! Restaurant Int. which also has
KFC, Taco Bell, A&W and Long John Silver’s under its umbrella. It is the world’s
largest pizza chain with over 12,500restaurants across 91 countries. Pizza Hut was
started in 1958,by two brothers Frank and Dan Carney in Wichita, Kansas. They
had the idea to open a pizza parlor. They borrowed $600 from their mother, and
opened the very first Pizza Hut. In 1959, the first franchise unit opened in Topeka,
Kansas. Almost ten years later, Pizza Hut was serving one million customers a
week in their 310 locations. In 1970, Pizza Hut was put on the New York Stock
Exchange under the ticker symbol PIZ. In 1986, Pizza Hut introduced delivery
service, something no other restaurant was doing. By the 1990's Pizza Hut sales had
reached $4 billion worldwide. In 1998, Pizza Hut celebrated their 40th anniversary,
and launched their famous campaign "The Best Pizzas Under One Roof." In 1996,
Pizza Hut sales in the United States were over $5 million. The first Indian outlet
was opened in June 1996 in Bangalore. In India, Pizza Hut has 139 restaurants
across 36 cities. Pizza Hut has been voted the “best family restaurant” for the
second year running at the 2007 Tommy’s Parent Friendly Awards. "Pizza Hut is
known for quality, innovation and category leadership.
 Background
• Pizza Hut entered India in 1996, and opened its first restaurant in
Bangalore. Since then it has captured a dominant and significant
share of the pizza market and has maintained an impressive growth
rate of over40 per cent per annum. Pizza Hut now has 95 outlets
across 24 cities in India; and employed nearly 4,000people by end of
2004. Yum! has invested about US$ 25 million in India so far; this is
over and above investments made by franchisees. Yum! Brands Inc is
the owner of the Pizza Hut chain worldwide. A Fortune 300
company, Yum! Brands owns Kentucky Fried Chicken, Pizza Hut,
Taco Bell, A&W and Long John Silver’s restaurants worldwide.
Yum! generated more than US$ 25.9 billion in worldwide sales in the
year 2003, and has more than 33,000 restaurants in over 100
countries.
 Operational Practice through
(C.H.A.M.P.S.):
• C : Cleanliness
• H : Hospitality
• A : Accuracy
• M : Maintenance
• P : Product Quality
• S : Speed

• Pizza Hut strictly follow the norms to attain the quality product .They
have adopted the best operational practice to attain the customer
satisfaction. They are doing their operational practice under an umbrella of
C.H.A.M.P.S .So here comes the role of supply chain because if they want
to provide a quality product to their customer and on the other hand they
want to responsive as well the cost will definitely go high so to be efficient
enough they have to manage their supply chain.
 Ingredients of Pizza:
• mozzarella cheese
• pepperoni
• sauce
• base
• potato
• vegetables
• wheat
• baby corn
• spices
 Products of Pizza Hut
• Pizzas

Pastas

• Soups and salads

• Desserts
 Outsourcing the Ingredients:
ITEMS PLACE

Wheat Jalandhar(Punjab)
Cheese Karnal, Haryana
Tomatoes Bhubaneshwar, Orissa

Spice South India

Baby corn Nepal

Pepperoni Australia
mozzarella cheese Spain
Market Share:

20%

32%

DOMINOS PIZZA OTHERS

48%
 Supply Chain drivers of Pizza
Hut:
• "Supply chain management is the factor that
differentiates the winners and the losers in
this business," drivers play an important role
in terms of the responsiveness and efficiency.
We must examine the cross-functional and
logistical drivers of supply chain performance:
facilities, inventory, transportation,
information, sourcing, and pricing.
 Inventory:
• It encompasses all raw materials, work in progress
and finished goods with in the supply chain. As the
base is prepared in the commissionaires and then
transported to different retail outlets and the outlets
keep the inventory stock of only three days because
it is the perishable good so the inventory stock cost
is reduced .As only the base is transferred to the
store so in case of any particular item demand is
increased it do not creates any problem.
 Transportation:
• To deliver the base from the commissionery to
different outlets the use the refrigerated trucks in
which the base is kept and there is a control of
temperature which they set according to the distance
between the commisionary and the outlets. There
are 110 trucks to supply the base 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 so
long as the counters are along the highway or the
truck's route. In this way they use their
transportation and maintain their efficiency.
 Sourcing:
• As we have seen above that the Pepporine
mozzarella cheese is imported from Australia and
Spain respectively so it will take time an
increased the cost also so they have to manage
but on the other hand to compensate the increased
cost they maintain the local supply chain to
reduce the cost like vegetables, wheat, tomatoes
are imported from India .So they provide the
world class facility and taste my importing its
main ingredient from Spain and Australia but
other ingredients from local vendors.
 Pizza and logistics?
• It is wrong to conclude that running a pizza chain is easy by
looking its front-end operations. Compared to the complexities
involved in managing a supply chain, the promise of pizza
delivery within 30 minutes or offering it free is a child's play
for pizza chains. "Supply chain management is the factor
that differentiates the winners and the losers in this
business,"  

On the other hand, Pizza Corner imports all its potato

requirements from Canada. The other major imports for Pizza
Corner are cheese and olive oil. Lately, the company has
started sourcing cheese from a Bangalore-based company.

For the Pizza Hut chain, cheese is imported from New

 Responsiveness and Efficiency:
• As we have seen that pizza hut open their outlet in bulk in a
particular city so they are responsive enough and they provide
delivery within 30 minutes or offering it free is also to increase
their responsiveness it is difficult to maintain such kind of
responsiveness because it will incur extra margin and the profit
margin will decrease that’s the main reason they open their
outlet in bulk and if a particular customer order a pizza where
pizza store is not available that store immediately call the
nearest pizza corner to deliver that particular order to be
responsiveness and if a particular product is not available they
use to do transfer in and transfer out in which they take the
product from different outlet.
Supply chain diagram of Pizza Hut:
Pepsi Company and
Cremica bakes
Sauces

Dough
Meat market

Filling
Vegetables
Topping

Bakes
Ware houses

Customer(pizza hut)
Delivery service
 Value preposition:
• Value proposition determines determines additional
ways of adding value to your offer without affecting the
price, so as to create a greater worth for the customer.
This is called ‘value proposition’. The value chain
analysis means of increasing customer satisfaction and
managing cost more effectively. This is a systematic
approach to examining the development of competitive
advantage. Value chain analysis is particularly useful
tool for looking at competitors, and identifying sources
of competitive advantage.
 PRESENTED BY-
ANUJ CHAUHAN (1101)