ASSESSMENT 3: CASE STUDY

Domino’s India Supply Chain

(Operations Management – POM 602)

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Submitted By:
Rishab
AUD 9799
Enrollment ID: A41011918095
MBA Working Professional (2018-2020)
Amity University Dubai
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Q: Why did Domino's decide to revamp its supply chain operations in India? How was
the new logistics model superior to the old model? Briefly explain the benefits
Domino's derived after the revamp.

"How about a pizza tonight!" This is very typical phrase being hooted a large number of times in
households around the world. With multiple players trying to tap into the fast food market,
Domino’s has been able to stand out well. Be it the crust, ingredients or on time consistent
delivery schedule, Domino’s Pizza is a dominant player in its league thus catering to millions of
customer in the present times. Thus, with the perfect combination of ingredients, Domino’s has
been holding a dominant position in the market with multi fold reach to various consumer pool
around the world.

In 1999, almost around two decades ago, the company was able to sell an ample count of 350
million pizzas thus achieving a significant sales figure of around $3.6 billion. In the United States
where Domino’s hold its primary market and distribution network, adequate delivery schedules
are managed thus ensuring stock management is in line with the regular routine of supply chain
management across all the outlets.

With Domino’s spreading its reach in a vibrant marketplace like that of India, the company has
witnessed several major strategic decisions since the early days of growth till the present age,
thus helping revamp the logistics and supply chain management aspects of business. Earlier,
majority of distribution channels used to reply on general computing tools like Microsoft Excel
and other related computer software’s in order to keep a check on demand forecasting thus
manage day to day schedule of orders and manage day to day stock requirements. Thus, proper
management of resource was a necessary task to make sure the company was not indulged in
unnecessary expenses be it transportation costs or additional storage expenses. Thus, the
management has a daunting task to help improve the demand forecasting requirements of the
company to make sure consistent revenues in business. Many factors comes into the picture
while deciding which software platform to adopt as a part of logistics management. A real time
system with the following stipulations would be an ideal channel for the company to maintain
its ever growing operations in multiple domains:

 Keep a track of inventory and necessary resources thus allowing Domino’s to manage
resource allocation in more systemic and regular basis.

 Help enhance the customer service by following more of a customer centric approach
thus delivering best of products and services.

 Improve the efficiency of purchasing process at location specific distribution channels

 Monitoring regular resource allocation and adjustments to make sure business is not
affected by extreme climatic variations.
When Domino's began to expand its business operations in India, the adoption of food delivery
was still a very early thought to follow upon thus restricted to large urban cities only. Dining out
was more of a common trend in recent days. Thus, to infiltrate the Indian market, Domino's
came up with a well-organized framework of the home delivery system with real-time order
tracking to ensure consistent standards of delivery were maintained.

At first, Domino's had a basic logistic model having self-operational outlet stores in major cities
like New Delhi, Mumbai and others with individual monitoring of resources and stock
management. However, as the business started expanding arms, volumes were expected to
grow three-fold wit opening of further outlets at multiple locations thus requiring a change in
existing management strategies to come up with low-cost supply chain management
mechanism for improved price flexibility in the market. The revamped model adopted by
Domino's came up with some significant advantages such as lower freight costs and inexpensive
procurement thus ensuring improved economies of scale. With the elimination of undesired
processing expenses, Domino's came up with reduced duplicity costs thus distributing operation
responsibilities into location-specific zones.

Thus with an inclusion of an updated logistics model, Domino's was successfully able to slash
down operational costs by significant numbers thus resulting in better customer service and
introduction of new and budget-centric products to tap rising customer preferences. In April
2000, Domino's came up with a low-cost pricing strategy for pizza meals selling pizzas at mere
Rs.49. Altogether with the rising customer base, Domino's was all set to target large corporate
settings along with university campuses and academic institutions to tap the majority of the
targeted pool of customers. Be it offices, railway stations, airports, cinema halls or even
shopping malls, Domino's has made its presence almost indispensable with multiple dining and
regular outlets.

Q: Analysts felt that Domino's took a cue from McDonald's supply chain model in
India. Compare the supply chain models of both companies. Why do you think
Domino's model was considered more complicated?

Both Domino’s and McDonald’s have been competent players in the FMCG market presently.
Out of so many other significant competitors in market, these two companies have been able to
hold up a dominant position in Indian market thus meeting up the taste preference of a vast
pool of consumers irrespective of geographical limitations. When it come to the supply chain
mechanisms of these two companies, both possess an equally consistent and elegant model
thus offering quality products and services. However, Domino’s is believed to possess a rather
more sophisticated logistics model as compared to its counterpart ie. McDonald’s and other
progressive competitors in market. Apart from offering some undeniable benefits such as
reduced freight costs and inexpensive resource procurement and management along with
independent distribution channels across many specific and centralized locations, the former
supply chain model adopted by Domino's had many limitations including infirm figures when it
came to economies of scale as a result of the inability of consumer outlets to bring in business.

References:

http://www.icmrindia.org/free%20resources/casestudies/Domino-Logistics20Management.htm