Domino's India Logistics Management
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Case Details:
Case Code : OPER005
Case Length : 10 Pages
Period : 1999 - 2003
Organization : Domino's
Pub Date : 2003
Teaching Note : Available
Countries : India
Industry : Food, Beverage and Tobacco
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Domino's Logistics Model
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Analysts felt that Domino's took a cue from McDonald's supply chain model (Refer
Box and Exhibit III for McDonald's model). However, they opined that the level
of complexity in McDonald's system in India was not as high as that of Domino's.
Commented Bhatia, "McDonald's operations are not as spread out as ours. They are
in four cities while we are in 16. Centralizing wouldn't work on such a
geographical scale."
Thus in early 2000, Domino's came out with its own logistics model. It began at
the point 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.
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For instance, 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.
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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. Chandigarh with
a cosmopolitan population, was a potential market for Domino's products.
Therefore, Domino's opened an outlet there. The cost of entry was low
because there was no additional costs incurred on transportation of
products... |
Exhibits
Exhibit I: The Pizza Hotline
Exhibit Ii: Domino's Worldwide Revenues
Exhibit Iii: Mcdonald' Supply Chain
Exhibit Iv: Mcdonald's - Outsourcing The Ingredients
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