DOMINO’S INDIA

LOGISTICS

MANAGEMENT

PRESENTED BY

NIKHIL S. TATKE

MILIND A. SHEVDE

M.V.SAIMAHESH

AGENDA

• FACTS

• INTRODUCTION

• BACKGROUND NOTE

• LOGISTICS MODEL

• INVENTORY MANAGEMENT

• CONCLUSION

Facts

• Domino’s outlet in India opened in 1996.

• It is second largest in revenue over the world.

• Jubilant Food Works Limited, a Jubilant Bhatia Group company

holds the Master Franchise rights for India, Nepal, Sri Lanka and

Bangladesh.

• By 6th august 2014 there are 772 Domino’s pizza restaurants in

India.

• Revenue

– 70 % from home deliveries

– 30 % from OTC (over the counter) sales

INTRODUCTION

• Pawan Bhatia took over as the CEO of Domino’s in

November 1999

• Bhatia was planning to open 150 new outlets by the end of

2002 covering 23 cities including Bhubaneswar and

Jamshedpur.

• Indocean Chase, the private equity fund bought a 25%

stake in Domino’s operations in India in 1999.

• Indocean Chase advised Domino’s to go beyond its 16

outlets in Delhi to exploit the potential in pizza delivery

business.

• As part of its expansion plans 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 customers.

• Initially, Domino’s had a simple model. It had three self-

contained commissaries in New Delhi, Mumbai and Bangalore

which bought their own wheat, tomatoes and other

ingredients, processed them, then delivered them in

refrigerated trucks to each outlet.

• Bhatia said, “It’s crucial for us to build a low-cost supply chain

operation which takes costs out of the system and in turns

gives us greater pricing flexibility in the marketplace”.

Pastas

Breadsticks

Cheese Dips

Beverages (tie-up with Coca Cola)

Choco Lava Cake

Chicken Wings

PRODUCT OFFERINGS

Pizzas

MAJOR COMPETITORS

BRAND YEARANNUAL REVENUE

STORES

PIZZA HUT 1958 $11.2BILLION >13,700

DOMINO’S 1960 $6.9BILLION >10,000

PAPA JOHN’S 1984 $2.6BILLION >3800

Little Caesars 1959 $1.45BILLION >3500

As per November 2013 data

OTHER COMPETITORS ARE

BACKGROUND

1950Dominick De Varti (Varti) owned a small pizza store named DomiNick’sPizza

1960 Thomas and James bought the store for US$900

1961 James sold his share of business to Thomas

1965 Thomas open two more stores- Pizza King and Pizza from the Prop

1966Varti opened a pizza store with the name of DomiNick’s Pizza in a neighborhood town

• Thomas decided to change the store name, One of

his employees suggested the name Domino’s Pizza.

• Domino’s Philosophy rested on two principles

1) Limited menu

2) Delivering hot and fresh pizzas within 30minutes.

1967 Opened the first franchise store in Ypsilanti

1968 Franchise store in Burlington, Vermont

1970Company faced problems again when it was sued by Amstar, the parent company of Domino sugar for trademark infringement

1980 Domino’s won the lawsuit.

1982It was established Domino’s Pizza International, first store opened in Canada.

1983 It inaugurated it’s 1000th store

• In 1984 Domino’s faced tough competition from Pizza Hut

in the home delivery segment.

• Little Caeser was eating into Domino’s market share with its

innovative marketing strategies.

• In 1993, Thomas took measures to expand Domino’s

product line.

• Thomas gave about 90% of the franchisee agreements in

the US to people who had worked as drivers with Domino’s.

• In 1993 Domino’s withdrew the guarantee of delivering

Pizzas within 30-minutes of order and started

emphasizing on “total satisfaction guarantee”.

• Domino’s entered India in 1996 through a franchise

agreement with Vam Bhatia corp. in Delhi

• By 2000, Domino’s had outlets in all major cities in India

• Goutham Advani, chief of marketing, said, “what really

worked its way into the Indian mind set was the

promised 30-minute delivery”

SAMPEL MENUE WITH PRICES

SALES STRATEGIES

DOMINO’S LOGISTICS MODEL• Analysts felt that Domino’s took a cue from McDonald’s supply

chain model.

• In early 2000, Domino’s came out with its own Logistics model.

• Wheat was cheapest in Jalandhar’s wholesale markets.

• The pizza dough and other items prepared in commissaries were

then sent to the retail outlets again in the refrigerated trucks.

• The retail outlets had to use up the processed dough

within 3days of delivery.

• To get to Jalandhar, the trucks had to pass chandigarh,

Through it is a cosmopolitan population it opend an

outlet to reduce their costs.

• It opened outlet in shimla.

• On the way back to Delhi, the trucks could pick up

cheese from Karnal.

• With the revamped supply chain, Domino’s was able to

leverage its fleet much better.

• The logistics model adopted by Domino’s offered some

obvious benefits including lower transportation costs,

cheaper procurement and economies of scale.

• Bhatia said, “ Our roll-out began only after we mapped

out our procurement strategy

• Domino’s also identified specialty crops in each region.

• Bhatia planned to use Domino’s 25 refrigerated trucks to

transport products for other companies on the same

route.

• Profit center had the potential to bring in Rs 10bn by

2006.

• Domino’s hoped to lower its prices by saving from the

logistics model and third-party transportation.

• In 2000 it announced a cut in pizza prices to Rs49.

OUTSOURCING THE INGREDIENTS

wheat Jalandhar (punjab)

Cheese Karnal, Haryana

Tomatoes Bhubaneshwar, Orissa

Spice South India

Baby Corn Nepal

Exotic Vegetables Sri Lanka

Pepperoni Australia

Jalapeno Spain

Logistics @ Domino’s

WHEAT from (JALANDHAR)

DOUGH

COMMISSARY

SUPPLIERS(Toppings & Seasonings

REFRIGERATED TRUCK

RETAIL OUTLET

Inventory Management @

DOMINO’S

ITEM SHELF LIFE

Dough ball 5 days

Mexican Wrap Base 3-4 days

Cheese Dip 4-5 days

Seasoning and Toppings 4-5 days

Onion, Tomato, Capsicum 5 days

Cheese Blend 4-5 days

• Domino’s is ranked no 1 for the past 3 years in Indian Operation Process.

• Over last 2 years the have opened stores in 15 new cities.

Conclusion

Company Liquidity

Asset Mgmt

Debt Mgmt

Profitability

ROE

Domino’s 2nd 1st 4th 3rd 4th

Papa John’s

3rd 2nd 1st 4th 3rd

Pizza Hut 4th 3rd 3rd 2nd 1st

MC Donald’s

1st 4th 2nd 1st 2nd

OUR EXPERIENCE AT DOMINO’S

DIAL : 68886888

THANK YOU