SUPPLY CHAIN OF PIZZA HUT: Like many of its multinational competitors, Pizza Hut uses a highly-franchised model that

helps maximize profit margins. However, Pizza Hut also owns Pizza Hut's Supply Chain Services (SCS), a subsidiary that supplies dough, ingredients, equipment and services to the stores owned by the company and the franchises. This model allows Pizza Hut to uphold quality standards and maintain consistency across franchised units, but it also provides the company with a significant revenue stream. Supply chain of pizza hut starts from the suppliers of pizza hut. There are direct suppliers andindirect suppliers of Pizza hut. Direct suppliers of Pizza hut are three named as: Pepsi Company Bake parlour company (Buns) Habib oil Mills (First mineral water) And all other material like Cutlery, meat, vegetables, sauces, and all other material come fromtheir warehouse named as Commissary. That material is purchased by Commissary means indirect suppliers of Pizza hut are: Meat market (Their owns cattle) Vegetable market Sauce companie PURCHASING OF PIZZA HUT: Pizza Hut demands the direct material on daily basis. On every day end pizza hut manager forecasts the demand of next day and gives the order to the suppliers than next day morning the goods come to the 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 the orders from the delivery service there is a specialized system in pizza hut which is connected to the delivery orders service so that 1 order list at a time come in the kitchen and at the managers table also. Than production of pizza according to order starts and they deliver it with in 45 minutes at the door of customer and in pizza hut they just take 20 minutes to prepare the pizza and serve it to the customer.

LOGISTICS OF PIZZA HUT: Distribution channels The type of distribution channel used by Pizza Hut is the direct channel. The direct channel is successful when there is an extremely large market that is geographically

dispersed. The direct channel is also useful when there are a large number of buyers, but a small amount purchased by each. Pizza Hut uses three different methods of selling its products directly to the market. -The first method of distribution used by Pizza Hut is delivery. Customers can call Pizza Hut ahead of time, place an order, and the order is delivered to the customers home. -Another method of distribution is for customers to dine-in. Customers can go to the nearest Pizza Hut, place an order and either leave with the order or eat at the restaurant -The third method of distribution is online ordering. Customers can now go on the Internet and place an order.

The cross-functional and logistical drivers of supply chain performance are: Facilities Inventory Transportation Information Sourcing

FACILITIES

Facilities are the actual physical locations 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 the commissionaires and then transported to different retail outlets. The outlets 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 trucks 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: Operations/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 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 receiving orders from customers. After the order placement of customers, preparation of pizza get started, the preparation time of pizza or the serving time of customers order is max 16 minutes. Whether there are too many customers orders and takeaways, but the pizza huts serving time never exceeds up to 16 minutes. Their ready dough helps them to make the entire customers satisfy in time. Incase of unexpected large number of customers or too many take away and delivery orders, the work is done in a way that one person spreads sauce, other add veggies, other one fills meat and the other person spreads cheese on it and then finally pizza goes in oven. This chain helps to serve customers as quickly as possible. But in normal routine only one person is responsible to prepare a single order (filling, topping etc). In pizza hut, here is no inventory left at end. All the pizzas are prepared as per customers demand. But sometimes, incase of any food festival or food stalls at exhibitions, there may some error occur to estimate the demand of unexpected arrivals of customer. If expected demand is high as compare to actual demand then finished goods inventory may left. At the end the cost has to be paid by company. To cut this cost pizza hut has a straight policy that this ending inventory (remaining pizzas) neither distributed among employees/workers nor stored in refrigerators to resell the next day but directly through into dustbin. The aim is to demotivate workers for producing extra units, keep them not to think that remaining pizzas would be serve to them or they may takeaway to their homes. The other 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 experienceswhere chances of buffer are also considered and 10% buffer ratio is taken. Demand estimation isdone through the mutual participation of the managers of the particular outlet. While estimatingcustomers demand, both, the home delivery orders of customers and those customers who usedto dine inn, take into account.After the demand estimation, operation process started. From 8am to 11am pizza hut gets openfor the production function only. From 11am till 3 at night, customers are welcomed to come innand enjoy their meal. Operation/production includes the preparation of pizza dough according tothe estimated demand. The preparation of dough is go through by three different processes. First p r o c e s s i n c l u d e s t h e a d d i t i o n o f d i f f e r e n t s p i c e s a n d y e a s t i n f l o u r . A l l t h e i n g r e d i e n t s a r e measured and followed SOPs to help maintain the same taste at all outlets in all cities. Skilledand trained labor is used to make the whole process speedy and efficient as well as to reduce thelead time of each process. After the addition of spices, in second process,

the different sizes of dough is prepared to response the requirements of customers. In third process, dough get baked.All of the three processes include machines and labor both. Each dough is not prepared by asingle 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, toppingand baking, is done after receiving orders from customers.After the order placement of customers, preparation of pizza get started, the preparation time of pizza or the serving time of customers order is max 16 minutes. Whether there are too many c u s t o m e r s o r d e r s a n d t a k e a w a y s , b u t t h e p i z z a h u t s s e r v i n g t i m e n e v e r e x c e e d s u p t o 1 6 minutes. Their ready dough helps them to make the entire customers satisfy in time. Incase of unexpected large number of customers or too many take away and delivery orders, the work isdone in a way that one person spreads sauce, other add veggies, other one fills meat and the other JIT STRATEGY 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 peak hours with vegetables required for toppings. They keep things ready in the line. Keep lemonade syrup ready so that they just have to add 7 up when the customer ask for Lemonade. They be ready with different patties ( pizza base) During peak hour they provide the pizza making time of 15 20 minutes. While there cycle of making one pizza is only 7 minutes. In normal case they provide the pizza making time of 10 14 minutes.

This they do, so that the customers have food as early as possible and their table gets vacant early so that more and more customers are served.

QUALITY MANAGEMENT To ensure rigid international bench-marks in the quality of products and 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 stand for Cleanliness, Hospitality, Accuracy, Maintenance, Product quality and Speed. Based 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 a 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 the quality standards set by Pizza Hut around the world. This strategy is important in order to satisfy the CHAMPS. This strategy is strictly

implemented in Pizza Hut in order to fulfill the quality standards. Different quality management staff is also there at Pizza Hut. The shift managers have the task to observe whether the quality standards are met 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.

IMPROVEMENT IN SUPPLY CHAIN PERFORMANCE Pizza hut has worked a lot to increase the responsiveness towards customers demand. Few years back they had some complaints from the customers, who ordered for 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 softwaresystem at which they save the data (name, contact number and address) of customers who call attheir call centre to order pizza and enjoy the home delivery service. Pizza Hut now tracks notonly phone orders, but online orders and can track in real time what commercials people are watching and responding to.After receiving the order from customer, pizza hut let go the bike rider. But sometimes customer complaint that they did not receive their order at the time. This may happened because of traffic jam, in case of accident of bike rider or due to disorder of bike in the middle of the way. To maketheir customers satisfied with their service, pizza hut found a solution that whatever the sort of,whenever there may some problem occur, the bike rider must has to call at pizza hut and makethem aware of the problem. After receiving call from that rider, pizza hut immediately sends theother rider to deliver the order and at the same time call centre connects the call to that customer w h o i s w a i t i n g f o r h i s d e s i r e d o r d e r , e x p l a i n s him whole situation and requests him for hiscooperation and patience (if t h e r e m a y f e w m i n u t e s e x c e e d s u p t o 4 0 m i n u t e s ) . B y s e n d i n g another person to deliver customers order, pizza hut now successfully improves the flow of itssupply 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 a single vendor to reduce integration and implementati o n issues Is built by experts on a foundation that expands as their business grows Rapid Time to Value Cost effective.By this way they have improved their supply chain process Recommendations: The supply chain strategy of Pizza Hut is very good but there area of supply is so small. They are providing there products only in big cities of Pakistan. There is so much

demand in small cities like Sargodha, Gujarat, Sialkot, and Gujranwala. There other competitors are moving in theses 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 some time, people will like to buy food rather then 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