MASTERS OF FASHION MANAGEMENT

OPERATIONS RESEARCH

Assignment II - Inventory Control Tools

17th - October - 2017

Submitted By
Manu (MFM/16/ 395)

[Link] (MFM/16/170)

Submitted To

Mrs. Gulnaz Banu (Associate Professor)

National Institute Of Fashion Technology - Bengaluru

Dominos (Bengaluru- HSR Layout) Inventory Management Model
I. Introduction to the brand Dominos

Dominos Pizza is the second largest franchised pizza chain

in the U.S.A., Tom and James Monaghan bought a small
Michigan Pizzeria called Dominick's, which was jointly run
by them until James traded his share for a second hand car.
Tom revitalized the image by changing the name to
Dominos Pizza. By the late seventies there were over 200
franchise pizza businesses in the States and Dominos Pizza
was ready to go International. In 1983 Dominos Pizza
opened its doors in Winnipeg (Canada), and in the same year opened its one thousandth
store. The locations for Dominos Pizza grew quickly. Despite Domino's Pizza
springing up diverse locations, they were still a very traditional company. Domino's
Pizza menu had been kept very simple and streamlined; they only sold one type of pizza
crust which they named the regular pizza. The pizza menu included just two sizes of
dough, it was not until much later that competition forced them to add a medium and
extra-large sized pizza. There were no such things as side orders you could have Pizza
and you could only drink a Coke with it.

In 1989, Dominos reacted market demand first time in twenty five years and
introduced Deep Pan pizza. This move ensured the growth of Domino's Pizza, as the
same year they opened their five thousandth store. In 1992 they were to introduce the
first non-pizza item to their menu, this was obviously a reluctant move as it was bread
sticks. Domino Pizza dough was already on hand and the making of bread sticks is not
so different. For many years the company had advertised that if the delivery of their
pizzas took longer than thirty minutes then the pizza would be delivered free. This was
parodied by the Teenage Mutant Ninja Turtles movie which specified the "pizza dude
has 30 seconds" to complete the delivery. The turtles pizza was late and they received
a refund of $3 for "being two minutes late, dude!" However the benefits to Domino
Pizza was enormous as millions of kids were to hear the name of Domino Pizza
endorsed on celluloid. In 1993 Domino Pizza discontinued this policy and stated that if
a customer was unhappy they could have a new pizza or a refund. By 1994 Dominos
Pizza marketing policy widened as chicken wings were introduced to the menu. At the
same time the company hit the African continent as they opened a store in Egypt.

By 1996 Dominos Pizza website was launched and the company declared global sales
of nearly $3 billion. Despite their reluctance to add a wider range menu they have as a
company given the pizza industry many innovations that have now become standard.
The belt driven pizza oven was the invention of Domino Pizza and they began using
corrugated cardboard delivery boxes which were very effective at holding the heat
within the pizza during the delivery time. Ever mindful of the fact that a cold pizza must
be about the worst dining experience on earth Dominos pizza introduced the "Heat
Wave," a portable electrical bag system that keeps the pizza hot during delivery.
Dominos (Bengaluru)

There are 99 domino's pizza restaurant in Bengaluru.

HSR Layout
Phone number- 080 2572 7781
Address - Ground Floor, 1573, Sector 1, Agara, Hsr Layout, Bengaluru, Karnataka 560102,
India
Highlights- Home Delivery, Outdoor Seating
Opening hours - (5 Hrs 52 Minutes left) 11 AM to 11 PM
Cuisines- Pizza, Fast Food
Known for - Cheese Burst Pizzas
Cost- Average, Rs. 400 for two people (approx.)
Payment methods- Cash and Cards accepted
Best Seller- Peppy-paneer, Farmhouse, Veggie-Paradise, Veg-Extravaganza
II. Products Offered by Dominos

Pizzas Pastas Breadsticks Cheese dips

Choco lava
Beverages Chicken wings
cake

III. Process involved in preparation of pizza

Step 1 Wheat processed in order to make the dough
Step 2 Dough is made under certain conditions
Step 3 Suppliers send the seasoning and toppings required for the pizza
Step 4 The dough and the seasonings/ toppings from the suppliers arrive at the
commissary
Step 5 The packaged products are sent to the retail outlets in a refrigerated truck

IV. Inventory management model used by Dominos

Just in time inventory model

V. Just in time Inventory model

Just In Time is set of strategic activities, which are formulated to achieve maximum
production with minimal maintenance of inventory. JIT as philosophy is applicable to
various types of organization but on implement side it is more relevant with
manufacturing operations.

JIT is based on the following fundamentals:

JIT manufacturing and ordering
Elimination of waste
Lean management
Signal System (Kanban)
Push-Pull System
With the above fundamentals in place, JIT delivers the following:
Continuous improvement of production and order processing.
Elimination of non-value added activities and procedures.
Simplification and advancement of the existing systems.
Creation of safety environment and ensuring total quality management.
Creation crossed skilled workers.
VI. Inventory management process at Dominos

Dominos uses an Enterprise supply chain planning application to monitor the

inventory in the commissary. This optimizes orders by looking at the minimum
requirements for each product based on inventory levels at the distribution center
and on days of supply to meet the minimum requirements that Domino's has
established.
Planning system receives demand signals from the retail stores through the
company's enterprise resource planning system and aggregates these demand
signals to establish replenishment requirements.
Dominos works on a quick and accurate inventory planning. They can rely on
the planning system to make sure their suppliers do not overburden their centers.
The inbound trucks must be fully loaded to control freight spend. The ERP
system knows the weight and dimensions for each product as well as the volume
and weight restrictions of the trucks, and whether they are company-owned vehicles
or for-hire carriers. The optimization logic builds fully loaded trucks of all the
product need for that delivery.
The overriding constraint for the planning system is to never run out of product
at the DCs.
The confidence in the planning system helps them reduce distribution centers
safety stocks-and in cutting corporate costs - with no risk of running out. Also, the
freshness requirement throughout the supply chain and the limited space at all
points do not allow for excess inventory anywhere.
They work on a just in time inventory model.
In the event of a promotion, the ERP system contains a library of promotion profiles
and real-time analysis of the current period. The system can overlay new
knowledge from the corporate marketing department that is likely to influence the
new promotion. Based on this data, the system provides recommendations for
promotion adjustments.
Store orders are filled every night at each Distribution center. Every truck, which is
part of a private fleet, is fully loaded to serve stores of Bangalore. The trucks handle
both dry and refrigerated product. The deliveries are made during the following day
when store activity is not at the peak. The standard order cycle is within 24 hours.
Domino's guarantees its franchise stores first-time delivery accuracy.
VII. Case Study Dominos 30 minute delivery
Domino's pizza comes with a 30-minute guarantee from the time an order is placed. If
the time taken to deliver the pizza is more than 30 minutes, the pie comes free if it costs
under Rs 300. And in case it costs more than that amount, the company subtracts Rs
300 from the bill.
Here's why. Domino's pizza comes with a 30-minute guarantee from the time an order
is placed. If the time taken to deliver the pizza is more than 30 minutes, the pie comes
free if it costs under Rs 300. And in case it costs more than that amount, the company
subtracts Rs 300 from the bill. In case it is more than 4 pizzas, it is regarded as a bulk
order and the guarantee does not apply. So by and large, all processes at Domino's are
geared to meet the 30-minute deadline.

Frontend Frisbee

When a customer calls, the order is flashed on the kitchen screen. The pizza maker
looks at it and gets down to the job at hand. There is the obvious dough stretching,
saucing and cheesing, and depending on the nature of the order, 'itemizing' or topping,
before it goes into the oven. Baking takes 6 minutes from where it goes to the cut table.
Finally, it lands up on the routing table where it is packed as per order in pizza delivery
boxes (read: warm bags) that SDPs carry to the last mile. "On average, we deploy 6-7
people on the process depending on the store size," says Harneet Singh Rajpal, VP-
Marketing, Dominos Pizza India. So this is how the 30 minutes divvy up. From order
to oven, it should not take more than 4 minutes. Since the oven takes six minutes to
bake; cutting, packing and pick-up make up for, say, another five minutes. And delivery
time should never exceed eight minutes. Add all that-it's a neat 23 minutes. "We're
designed to deliver in 23 minutes and give a seven minute buffer to our employees for
unforeseen traffic, rains etc.," says Rajpal. The 50-year-old Kaul's calling is thus
justified.
With 20,000 employees across 552 stores spanning 118 cities, the process is performed
de rigueur day in and out. But the story doesn't end there. In the backend, materials
need to move from the 180-odd business partners or vendors to the four factories or
'commissaries' as they are called inhouse, before landing up at the stores. This is where
each ingredient in the supply chain comes under sharp scrutiny.

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