BUS2002 Managing Operations

Operations management is a process of administrating business activities to create a high level of effectiveness in the practices of an organization. The operation management is basically concerned with the utilization of resources effectively that will help in increasing the profits of an organization to the maximum level. Domino’s is a global organization which has the most effective pizza delivery services. The organization functions effectively because of its unique and successful operational model, which has helped the organization to establish a business with three outlets into 9,350 outlets, all functioning properly in seventy countries all over the world. The company Domino’s Pizza LLC, which is situated in Michigan holds the control and supply of the raw materials to all the master franchises in different countries.

A Real World Service Business Operations

The vision statement of the Domino’s focuses on a few key areas which are-

• To always be better than their competitors.
• Providing high standards of quality product.
• Facilitating the customers with excellent services.
• Building loyal customers.

The vision of an organization enables the company with a clear approach, which is towards fulfilling those aspects to gain potential customers and increase the profits of the company (Bakshi and Pinker, 2018).

Performance of Existing Business Operations

Global Objectives

The main global objectives of the company are-

• More expansion in the international market by effectively targeting the right audiences.
• The expansion in the variety of the products.
• An effective model which enables excellent delivery services for 24 hours.
• The perfect utilization of the company owned stores, especially in Australia and the United States of America. This will also help in testing new innovations in these regions and can be further applied in the world market depending on their success rate.
• The company’s human resource strategy aims at increasing investments in the areas of training and also for auditing the store. This has the main objective of increasing standards of quality in products and achieving more consistent services.
• The company also has a knowledge management strategy which focuses on the master franchises to use their knowledge and understanding of the local market and their cuisines for any additional products (BRADLEY and CONWAY, 2009).
• Order Qualifiers & Order Winners

Order qualifiers are the basic standards which a product has to meet, for qualifying to be used as a selling product. Domino’s has a strict standard, which is applied to the each product and have to go through a process of qualification.

Order winners are the standards which are achieved by a product due to its high purchasing. The success of a product gets it the final place in the menu of the company (Chase, 2010).

The Value Chain

            For acquiring better knowledge about the different managing operations, it is vital to understand the different driving forces which enables Domino’s to create a product. The value chain of the organization is carried by different driving forces which includes-

• A reliable take away restaurant which has high standards of efficiency.
• A reasonable price system for better quality.
• A wide range of variety which is offered according to the preference of the local market (DuHadway and Dreyfus, 2017).

Domino’s has successfully garnered loyal customers by focusing on these three key aspects in their value chain and has not permitted any type of digressions affect their working system of the value chain, unlike its competitors. The competitors are using a mixed model which does not allow them to focus on the core activities as their attention is drawn towards multiple aspects that are unimportant.

The operational model of Domino’s on the global level focus on a highly skilled staff, lean store and flexibility depending on the various taste buds in a country (Flynn, Koufteros and Lu, 2016). Domino’s identifies the need for using the technology for enhancing the customer experience and that’s why the company has also launched their online application for better customer service. The effective amalgamation of the company level strategies and the operational strategies has provided the Domino’s with a reputation of strong reliability and consistency.

Value Chain of Product

            All the activities which are performed by the Domino’s have a main focus on value adding activities. There are five primary activities which are involved in the working of the company which have the key focus on product production and external customers. The external customers and the services provided to them are paramount for the process to function perfectly. The company has categorized their activities in many parts and the most important one amongst them is the support activities. These support activities are very important for the transformation of the resources. The convenience they provide to their customers is another important process which helps in forming a strong foundation. All these are the various processes of Domino’s that helps the organization to effectively expand and operate in various countries (Gkliati, 2014).

Corresponding Operations Layout (Store Level)

The main focus of the Domino’s is in providing high quality products and services. The following corresponding operations are performed in a store-

• Minimizing the Cost of Operations: Domino’s reduces the operational cost, by continuously improving their efficiencies and also slowly and gradually bringing an improvement in their various processes which are a part of their working store.
• Store Locations are Strategically Finalized: Domino’s finalizes the location of their stores after a strategic plan, which focus more on quick delivery to the customer and different ways to increase their profits (Gligor, 2016).
• Store Designs are Production Oriented: Domino’s has a main focus on providing excellent services to the customers. In this attempt the company has a store design which is production oriented, to serve the customers with better quality and services.
• Efficient Delivery Process: The delivery process has a number of stages, which are taking orders, preparing the order, boxing and then delivery. The store’s staff work in a coordination to smoothly work through this process.
• Dominos PULSE System: Domino’s has a PULSE system which has been incorporated to improve their operating efficiency. This is also helpful in providing easy access to data associated with finance and marketing that further helps in improving the corporate management of the company.
• Process & Product Innovation: Domino’s encourages and support different innovation processes and products which are very helpful in improving the quality and efficiency in the company (Harvey, Heineke and Lewis, 2016).
• Focused Menu: Domino’s has a well-planned menu that focuses on the needs of the customers and the quality which is being offered to them. The menu which is finalized should also have minimum possibilities for errors and it should also be expediting the complete delivery process specially the order taking process and the preparation of the order.
• Evaluation Program for Store Operations: Domino’s has to successfully audit the store performance and for this they have an evaluation program for the operations of their stores, also in context with the customers ensuring that all their needs and expectations are fulfilled (Jerbrant, 2013).

Supply Chain

The organization Domino’s have an approach that is for the effective management of their supply chain which is make-to-stock approach. This approach has been adopted as the company has a lean production policy along with stock control. They also have a management policy which is for the just in time stock. Domino’s has a very innovative and modern model of supply chain which ensures that the different purchases which are made in the different franchises all around the world are managed centrally.

Domino’s has a supply chain network which is known as Domino’s supply chain services. This subsidiary is fully owned and is responsible for supplying the dough, kitchen equipment and various raw materials which includes the different ingredients that are helpful in the production process. This also includes the machinery which is required for production (Narayanan, Balasubramanian and Swaminathan, 2010). Other important aspects of the supply chain-

• Domino’s has a centralized department of buying, this enables the company to leverage their power of buying, which also facilitates them with an opportunity to negotiate for all their different purchases. The scale on which the purchases take place also determines whether the suppliers will be included in the Domino’s supply chain services. For example, Domino’s has a very close relationship with Coca-Cola. Coca-Cola is more like a partner than a supplier and are also a part of the Domino’s supply chain services. This has happened because Domino’s agreed to the terms of selling only Coca-Cola products in all their stores in the entire world.
• Domino’s has a centralized system that helps in ensuring the quality of products which are being used for the food. Also the supply of similar kitchen equipment and machinery makes the task of training the staff very easy.
• Domino’s has a large purchasing power due to their wide market. This helps the company to hedge appropriate prices, especially during the time of price fluctuations. This also enables them to utilize and apply their bargaining abilities and power with the suppliers (Reimann and Ketchen, 2017).
• Domino’s has centralized their supply chain services in their master franchises too. Here to understand this better, example of the United Kingdom has been taken for better understanding.
• All the foodstuff and the raw material in the UK is prepared at Milton Keynes, which serves as the central commissary.
• From here the raw material is forwarded to the distribution centers, which are situated in Penrith, Nass & Milton Keynes.
• The distribution centers, then supply these foodstuffs to the individual stores mostly once in three days. But the supply of the stores also depends on the requirements of the stores which are tracked through the Domino’s PULSE system (Riley, 2010).
• Importance of Forecasting: Forecasting is also an important role in the supply chain of dominos. The different methods of forecasting which the company utilizes is for the smooth working of the supply chain. With the help of forecasting, the company is able to recognize trends which influence the operations of the supply chain. Some of these trends are very helpful in bringing alteration in the supply chain which further helps the organization. Forecasting is also utilized by Domino’s in calculating the seasonal shifts in the demand. The management then makes some changes which are finalized after the seasonal forecast.

Scrutinizing of the Business Quality

Domino’s has a huge pressure on them for maintaining the quality of their products as it is important for their brand image and for maintaining loyal customers of the company. There is more added pressure on them as the pizza world widely is identified as a food which is “unhealthy”. Domino’s has a supply chain of their own and there is a process which is followed strictly. From the central commissary, the raw materials are sent to the distribution center. And from there they are forwarded to the individual stores and which happens at every third day. This regularly movement of food stuff helps in preventing over pilling and also completely supports the just in time philosophy. This is a good approach as it helps in maintaining the quality of their each product as all the raw materials used are fresh and nothing is stale (ROTH and MENOR, 2009).

            Domino’s also has a procedure which is applicable for the approval of all their supplies. Through this process all the food products have to go through fulfilling all the standards and requirements which are stated by the company to their suppliers. They also have a food technology, which they utilize for their each product, ensuring that all the food stuff supplied to them is of high quality standards, is safe and also legal.

            Domino’s also ensures that all the products and foodstuffs are risk assessed and the wide variety of products which they use fulfills the global standards of BRC that are for food safety. They also use the food technology standards which are also utilized for checking the quality. Regular assessments are also conducted on all the suppliers. Quality checks are also performed on various samples which have been taken for analysis and also on the delivery products. The quality check is also conducted through the feedbacks which have been received by the consumers.

            Domino’s performs a lot of activities which are important for the quality check of the product. But the organization does very little for checking the quality of the service which is provided to the customers. Customer service is very crucial as it is through it that helps in forming loyal customers for the company (Sulek and Hensley, 2010).

Recommendations for the Alternative Managing Operations

            Amongst all the popular food chains in the world, Domino’s stands on the 12^th position. Different food chains are ahead of it due to the new strategies which they are applying with the changing trends in the society and the world. There is an emergency in Domino’s that is asking for new strategies which have to be implemented to increase their world ranking (Yagci, 2011).

            The most appropriate model which should be implemented for improving the performance of Domino’s is the Slack Model. This model is best for prioritizing performance and is based on a criteria which is effective for winning orders. This model will also be helpful for Domino’s to resolve issues which it is currently facing due to high competition.

• Excess Zone: Domino’s has the habit of giving their customers a lot of discounts. This is their strategy to attract more customers. Now, the various offers of discount due help in attracting customers, but a large number of discounts, leads to less margin of profit and above all tends to reduce the brand image in the people’s eyes. Domino’s has to bring a control over their discount offers which will definitely not affect their sales (Corsinovi and Gaeta, 2015).
• Appropriate Zone: The Company has a very strong image of an unmatched and effective home delivery. The highest efficiency in delivering food has helped him in staying ahead of its competitors. The “30-minute-delivery” has given the company a solid image in the eyes of the customers. This is the biggest strengths of Domino’s which also shows and creates a balance between their competitors and Domino’s.
• Improvement Zone: Domino’s has to do something which will inform people about their quality products. They have to build new strategies which help in exhibiting and popularizing their quality standards, through means of advertisement or any other medium which broadcast and publicize the quality of their products (Cucchiella and Koh, 2012).
• Urgent Action Zone: Domino’s has to build diverse and new plans which will help in checking their customer services. The various competitors of Domino’s have been successfully in taking away their customers due to the competitor’s effective customer services. Also, the product design of the company is asking for improvement and urgent actions (Jabbour, 2009).

Evaluation of the New Strategies

            It is very important for the Domino’s to regularly evaluate the performance of the new strategies which has been implemented for the betterment of the company.

• All the new strategies which have been implemented can be effectively evaluated through a keen observation or monitoring. Monitoring of the changes which have taken place after the implementation, will inform about the different aspects clearly. For example, monitoring of reduction of the discount which are given by the company on sales will help in evaluating the customer’s perspective (Tachizawa and Wong, 2015).
• Evaluate the customer service through a quality call or a service call to the customer. Ask them about their experience and also the improvements which are needed by the company.
• Conduct surveys and question the customers the different aspects which make Domino’s better from its competitors and what are the areas in which it lacks behind (Talib and Randhir, 2017).

Conclusion

            After analyzing the different aspects of operation management of Domino’s, it can be said that the company is in a situation of flux. The company has shown a lot of innovation with the increasing competition, but all of them were push-based, whereas they should always be pull-based. The company is building strategies which are more of a catching up attempt rather than excelling the competitors and reaching bigger heights. Domino’s has to bring changes which are intuitive and also customer-oriented, which will help in gaining its lost customers and forming new ones.

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