‡ The case gives an overview of Domino's revamped supply chain operations in India. ‡ It discusses the various benefits of the new logistics model and discusses the reasons for the revamp. ‡ The benefit of low costs achieved through the new model was passed on to the customers in the form of lower prices. ‡ The case also compares Domino's new supply chain model with McDonald's supply chain model.

‡ Pawan Bhatia became CEO of Domino¶s Pizza India in Nov 1999. ‡ Started reworking on pizza chain¶s India strategy. ‡ Planning to open 150 new outlets by the end of 2002 covering 23 cities including Bhubaneswar. ‡ In late 1999, Indocean Chase, the private equity fund bought a 25% stake in Domino's operations in India from Domino's franchise in India.

‡ Domino's planned to go in for an initial public offering (IPO) in the next two years. ‡ Indocean Chase advised Domino's to go beyond its 16 outlets in Delhi to exploit the potential in the pizza delivery business. ‡ Analysts felt that Domino's had to rethink its supply chain operation because it was the biggest area of costs. ‡ Since 75% of Domino's customers ordered either from office or home, it did not have to lease large plots of land in prime locations to attract traffic. ‡ Instead, it needed an efficiently managed call centre to bring better returns.

Analysis of the Domino·s supply chain and its comparison with McDonald's supply chain model.

‡ Domino's revamped its entire supply chain operations:from sourcing raw materials to shipping them for processing at a central location to delivering it to the customer. ‡ It had three self-contained commissaries in New Delhi, Mumbai and Bangalore which:bought their own wheat ,tomatoes & other ingredients, processed them, then delivered them in refrigerated trucks to each outlet.

‡ McDonald¶s took 4 years and around Rs 450 crores to set up the food supply chain even before opening its 1st restaurant. ‡ McD India has pioneered the cold chain management system. ‡ They provided assistance in the:Selection of high quality ingredients Drip-irrigation technology Refrigerated transportation style Fully automatic international standard processing facility. Network of milk collection centre equipped with bulk coolers.

‡ Analysts felt that Domino's took a cue from McDonald's supply chain model. ‡ They opined that the level of complexity in McDonald's system in India was not as high as that of Domino's. ‡ McDonald's operations are not as spread out as Domino¶s. ‡ They are in four cities while Domino¶s in 16. Centralizing wouldn't work on such a geographical scale."

‡ In early 2000, Domino's came out with its own logistics model. ‡ Domino's purchased wheat for making the pizza dough. ‡ Domino's first decided the procurement strategy for its key raw materials: wheat, baby corn, tomatoes and spices.

‡ Wheat was cheapest in Jalandhar's (Punjab) wholesale markets. ‡ Domino's refrigerated trucks got the wheat back to the commissary in Delhi. ‡ Commissary processed the wheat and prepared the pizza dough. ‡ The pizza dough and other items prepared in commissaries were then sent to the retail outlets again in refrigerated trucks. ‡ The temperature inside the truck was fixed based on the distance between the retail outlets and the commissaries.

‡ This was to set the dough at a particular level when it reached the outlets. ‡ The retail outlets had to use up the processed dough within three days of delivery. ‡ If they failed to do so for some reason the entire quantity was discarded. ‡ To get to Jalandhar, the trucks had to pass Chandigarh,Domino's opened an outlet there. ‡ The cost of entry was low because there was no additional costs incurred on transportation of products.


Sign up to vote on this title
UsefulNot useful