8/3/2019 MSCA (1) (1)

1/29

GROUP 1:

HARISH.P

HAEMANANTH.R

RAHUL KRISHNA.K

TRUPTHI.S.VADANA

VIDYA.T

SUPPLY CHAIN TO ENHANCE

CUSTOMER VALUE

8/3/2019 MSCA (1) (1)

2/29

Supply chain management

y The sequence of organizations - their facilities, functions, and

activities - that are involved in producing and delivering a product

or service.

y Supply chain represents a value delivery system starting from raw

materials to final product.

y Supply chain involves procuring the right inputs , converting them

efficiently into finished products and dispatching them to final

destination.

8/3/2019 MSCA (1) (1)

3/29

Elements of Supply Chain Management

Deciding how to best move and store materialsLogistics

Determining location of facilitiesLocation

Monitoring supplier quality, delivery, and relationsSuppliers

Evaluating suppliers and supporting operationsPurchasing

Meeting demand while managing inventory costsInventory

Controlling quality, scheduling workProcessing

Incorporating customer wants, mfg., and timeDesignPredicting quantity and timing of demandForecasting

Determining what customers wantCustomers

Typical IssuesElement

8/3/2019 MSCA (1) (1)

4/29

Flows in a Supply Chain

Source

Supplier

Supplier

Distributor

Distributor

Retailer

End-User

Converte

r

ConverterConsumers

Information Flow

Funds/Demand Flow

Value-Added Services

Material Flow

Reuse/Maintenance/After Sales Service Flow

8/3/2019 MSCA (1) (1)

5/29

8/3/2019 MSCA (1) (1)

6/29

Dominos

y Dominos Pizza is the second largest franchised pizza chain in the

U.S.A.

y Dominos entered India in 1996 through a franchise agreement with

Delhi based industrial VAM BHARTIYA CORP establishing 16 outlets

in Delhi.y By 2002 dominos had around 150 outlets covering over 20 major cities

in India.

y When dominos entered India the concept of home delivery was still in

its nascent stages.

y It came with a strategy of 30 min delivery system within the time of

order.

y This home delivery proposition worked its way into Indian mindsets as it

offered compensation of 30 on price tag if there was a delay.

8/3/2019 MSCA (1) (1)

7/29

Dominos supply chain model

Initialmodel:y initially dominos had a simple mode comprising of three self contained

commissaries in new Delhi, Bangalore, Mumbai which brought their

own wheat, tomatoes and other ingredients, processed then and

delivered them in refrigerated trucks to each outlet.

y With the increase in its operations across India the existing model of

dominos has to be revamped.

yIt also realized that efficient and effective supply chain would help itsignificantly to reduce costs

8/3/2019 MSCA (1) (1)

8/29

Revamped model

y Dominos follows vertically integrated supply system i.e automatic

delivery of raw materials cuts out a lot of the "back of-store" activities.

Costeffective procurement:

it procured raw materials from places where it could reduce its

costs and gain excellent quality value proposition.

Example: it brought wheat from jalandhar and baby corn from

Nepal(where it is 40% cheaper than India).

Convertinglogistics problemsintobusiness:

8/3/2019 MSCA (1) (1)

9/29

y Excellentfleetmanagementfor optimum resource

utilization:Dominos opened outlet in every potential market , which fell in route

between the commissary and places where it procured raw materials. It

helped them to reduce transportation costs and cheaper procurement and

economies of scale.

y Understandingagroclimaticzonecrop

specializationpractices:

It identified specialty crops in each region and then entrustedcommissary in that region to process that specialty crops.

8/3/2019 MSCA (1) (1)

10/29

y Developingthecoldchainlogistics:

It used 25 refrigerated trucks to transport its raw material. It also

transported products of other companies in same route. It helped

dominos to gain profit in logistics centre.

8/3/2019 MSCA (1) (1)

11/29

SWOT ANALYSIS OFDOMINOS

STRENGTHS:

y Dominos Pizza Inc. strong brand equity gives it acompetitive advantage over other industry players.

y The intelligent marketing strategy of heavy advertising is a key strengthto make its brand image retained and differentiated in the minds of itscustomers.

y Dominos Pizza Inc. efficient and effective supply chain managementenables it maintain its goodwill and promises. Its extensive

distribution channels add to its plus points.y In the global era of e-commerce and online shopping it has enabled to

keep pace with the technology by offering online menus, click orderplacement services etc.

8/3/2019 MSCA (1) (1)

12/29

WEAKNESS

1.High fat and high calorie food not good for health conscious people

2.Franchise management.

3. High staff turnover due to lack of training and development

8/3/2019 MSCA (1) (1)

13/29

Opportunities

y There are favourable market expansion opportunities for Dominos

Pizza Inc in India and China where currently it have very few

franchises moreover new product development by introducing

new products in the current menu are a step that can be taken.

y Especially introduction of new flavour additives and pizza toppings that

are region specific can be a good stride for Dominos.

y The distribution network should be further strengthened so as to

ensure market penetration in the existing markets at maximum

optimum levels.

8/3/2019 MSCA (1) (1)

14/29

Threats

y The major threat to Dominos Pizza Inc., like all other fast food

restaurants, is the increasing consumer awareness about the he

harmful health implications associated with high calorie fast food items.

y The researches in the health sector about the fast food products being

saturated with fats, oil, sugars and sodium etc pose a threat to Dominos.

In addition to this there are other researches showing the potential

harmful effects associated with the artificial additives, flavours and

preservatives added to these fast foods.y Intensive competition and franchise management which vary with

currency fluctuations pose a threat to the company.

8/3/2019 MSCA (1) (1)

15/29

1. Develop strategic objectives and tactics

2. Integrate and coordinate activities in the internal supply chain

3. Coordinate activities with suppliers with customers

4. Coordinate planning and execution across the supply chain

5. Form strategic partnerships

Recommendations for creating anEffective

Supply Chain

8/3/2019 MSCA (1) (1)

16/29

8/3/2019 MSCA (1) (1)

17/29

McDonald's

McDonald's was started as a drive-in restaurant by twobrothers, Richard and Maurice McDonald in California, US inthe year 1937.

By mid-1950s, the restaurant's revenues had reached

$350,000.

Ray Kroc, distributor for milkshake machines, expressedinterest in the business, and he finalized a deal for franchisingwith the McDonald brothers in 1954.

He established a franchising company, the McDonald SystemInc. and appointed franchisees.

8/3/2019 MSCA (1) (1)

18/29

In 1961, he bought out the McDonald brothers' share for $2.7

million and changed the name of the company to McDonald'sCorporation. In 1965, McDonald's went public

In 1996 Mc Donald's came to India.

Two separate operations in Northern & Western India.

Partners and their management teams trained extensively inIndonesia & the U.S.

Approximately 75% of the menu available in McDonalds inIndia is Indianized and specifically designed to woo Indiancustomers.

The McDonald's philosophy of QSC&V is the guiding forcebehind its service to the customers.

8/3/2019 MSCA (1) (1)

19/29

BUSSINESS MODEL

McDonalds operations is a unique business model comprisedof the Company, our suppliers and franchisees (also calledowner/operators). Often referred to as a three-legged stool, all

three parts of this business model are essential to McDonaldssuccess around the world.

8/3/2019 MSCA (1) (1)

20/29

McDonalds Supply Chain

McDonalds has a dedicated supply chain in India and sources99% of its products from within the country. The company hasstrong backward integration right up to the farm level.

McDonald's has extremely good logistics system in India. It hassome systematic procedures

1.quality assurance

2.demand based delivery

3.centralized ware housing4.cold chain maintenance

8/3/2019 MSCA (1) (1)

21/29

Relationship between McDonalds and its

suppliers Trikaya Agriculture: Supplier of Iceberg Lettuce

Vista Processed Foods Pvt. Ltd: Supplier of Chicken and Vegetablerange of products (including Fruit Pies)

Dynamix Diary:Supplier of Cheese

Amrita Food:Supplier of long life UHT Milk and Milk Products for Frozen

Desserts Radhakrishna Foodland:Distribution Centres and cold storages.Completely dedicated distribution and supply chain.

8/3/2019 MSCA (1) (1)

22/29

Trikaya Agriculture Supplier of Iceberg Lettuce

Vista Processed Foods Pvt.

Ltd

Supplier of Chicken and Vegetable range ofproducts (including Fruit Pies)

Dynamix Diary Supplier of Cheese

Amrita Food Supplier of long life UHT Milk and MilkProducts for Frozen Desserts

Radhakrishna FoodlandDistribution Centres and cold storages.

Relationship between McDonalds and its

suppliers

8/3/2019 MSCA (1) (1)

23/29

SWOT ANALYSIS OF

MCD

ONALD

SSTRENGTHS:

Quality measures through supply chain management.

Encourage new ideas from within

Big Mac Egg McMuffin.

Large available amounts of capital for future restaurants due toholding a limited number of corporate owned restaurants.

Economies of scale

8/3/2019 MSCA (1) (1)

24/29

WEAKNESS

Weak product development Poor relationships with franchisees

Fluctuations in profit (which has been improved in 2008 after the

franchising of many corporate owned restaurants)

OPPURTUNITIES: International expansion through continued franchise opportunities.

Only serving 1% of the worlds population

Growth in the beverage industry (by 2011 - $71.4 billion in sales with

70.8% being coffee drinks)

Introduction of local offerings (i.e. Tech Burger with special

condiments and toppings)

8/3/2019 MSCA (1) (1)

25/29

THREATS

Mature industry

Strength of competition

More health-conscious consumers

Changing demographics

Fluctuation of foreign exchange rates

Increasing commodity and fuel prices

8/3/2019 MSCA (1) (1)

26/29

Effective supply chain lead to strategic

competitive advantage for McD

onald's Lower inventories

Higher productivity

Greater agility. Shorter lead times

Higher profits

Greater customer loyalty

Integrates separate organizations into a cohesiveoperating system

8/3/2019 MSCA (1) (1)

27/29

1. Improve operations

2. Manage increasing levels of outsourcing

3. Reduce transportation costs

4. Combat competitive pressures

5. Manage increasing globalization

6. Address challenges posed by increasing importanceof e-commerce

7. Tackle uncertainties in complex and dynamic supplychains

8. Manage inventories

Key changes which have made supply chain

management a critical function:

8/3/2019 MSCA (1) (1)

28/29

conclusion

y Effective supply chain management represents the shift in

focus of business organizations to get the benefits of low

operating costs, product availability & customer satisfaction.

y Supply chain systems configure value for those that organize

the networks. Value is the additional revenue over and above

the costs of building the network.

8/3/2019 MSCA (1) (1)

29/29

THAN Q