Dominos Pizza: Logistics & Operations Management Analysis

About Domino’s Pizza Enterprise

Describe about the Article for Logistics and Operations Management Domino’s Pizza’s Process Technology.

Managing logistics and operations in a business is highly crucial to ensure that the company meet out the requirements and necessities of consumers on regular basis. Conversely, to perform the logistics operations productively and effectively, the fundamental step is to consider proper and timely management along with various multiple areas which includes manufacturing, finance, banking, public sector, strategic management, corporate governance etc. Also many supporting processes are there that helps in managing business properly and efficiently (Higgs 2013).

Customer Process technologies is a collection of tasks and related structured activities which produces a particular product for a specific customer. It could be broadly determined in 3 processes

Management Process Technology

Operational Process Technology

Supporting Process Technology

The management process technology is related to governing the operations of a business such as strategic management process or corporate governance process of some business (Higgs 2013. The Operational process is connected to the core business of the company which creates the main value stream and supporting process is mainly the backend operations such as accounting and technical support.

This report is focused towards performing an analysis on Operational Process Management of Domino’s Pizza Enterprise which includes basic operations such as manufacturing, purchasing, sales and marketing.

Domino’s Pizza is an American restaurant chain and is also an international franchisee pizza delivering corporation; this organization was founded in 1960 and is the second-largest pizza chain in the United States. Domino’s pizza has nearly 9500 franchised and corporate stores in all 50 U.S. states and 60 international markets (Steve, R 2011). The products delivered by Domino’s are Pasta, Pizza, oven-baked sandwiches, Boneless chicken, wings, salads, a variety of dessert items along with breadsticks and cheese sticks. A new recent addition to the product line is a ‘burger pizza’ which they claim to taste like a pizza but looks like a burger.

Domino’s Pizza had a vision of being number one amongst all the pizza companies and also number one amongst the people (Nathan 2010). And its mission is focused on selling more and more pizzas and to add more fun to the life of its customers. Since its beginning, Domino's Pizza had an insurance that clients might accept their pizzas inside 30 minutes of submitting a request, or they might get the pizzas free.

The successful and effective stock management and network of Domino’s Pizza empowers it to uphold its guarantees and goodwill in the market. The wide seizure mediums of the company help it to attain focus on its productivity. In this global era where e-commerce trade is at its full pace, Domino’s is not behind and offering online ordering along with mobile applications, and clients could get their pizzas on a single click. It has been researched that the percentage of online ordering in U.K. has reached to 46.2%.

Customer Process Technologies at Domino’s

The vision statement of Domino’s is “Brilliant and Unique individuals on a mission to provide best pizza in the world at the doorstep”. Domino’s aims to bring convenience, happiness and fun by making tastiest pizza in the world and fulfil their commitment towards their guests.

This is the reason, Domino’s efforts towards whether a new product or old, great delivery and take away service, presence in world or value for money deals, everything is co-ordinated towards making connections more grounded.

Domino’s started its mission to become customer friendly somewhere around 2008 when it was almost clear that people have developed a taste for the delicious pizzas of Domino’s. The various process technologies at Domino’s includes marketing and advertising through ecommerce technology which means tie up with various social networking sites and mail accounts and so on to promote their pizzas online.

Another customer process technology Dominos makes use of is an online application along with a mobile application to order pizzas online. In fact, in today’s date more than 50% of pizza sale is through online orders (Nathan 2010).

Domino’s has various unique selling prepositions that comprises of

Product Gratification Assurance: The Company owns the entire responsibility for the satisfaction with their products which means they are serving fresh, hot and tasty to the consumers. If the customer is not satisfied with their order Domino’s promises to refund entire money.

Delivery at Doorstep in 30 Minutes: This is the only pizza company that provides the service of doorstep delivery in less than 30 minutes or the consumer gets his pizza free, except for the rainy days.

Take-away order in 15 Minutes: Company guarantees the fulfilment of customer’s order at the outlet in maximum 15 minutes, if not the customer gets a free voucher for a pizza which could be used in the given time limit.

Delivery is free of cost: Company do not charge extra to deliver pizza at doorstep.

As discussed above this paper will try to improve Domino’s operational process technology which is concerned with advertising, marketing, and manufacturing and purchasing of raw material and similar other things.

Advertising and marketing is one of the major steps in Operational Process Technology along with a major role in company’s revenue generation techniques. At present, Domino’s is using online promotion schemes through social media and other sites and promotion through pamphlets and hoardings. These all of the measures are great in itself but not sufficient as the competition in this field is now very vast so company must take innovative measures regularly in order to grow its revenue.

Alternate Technologies

Social media networks are wide and large and every human breed could be found on it so it is one of the best platforms to be use in a more enhancive way. One of the alternate is to make the use of powerful hash tags which is both popular amongst users and also they don’t need any extra advertising cost. It is absolutely free and grows as a chain.

Manufacturing of base pizzas and other sides are done at their factory which includes transportation costs and also does not guarantee freshness. An alternate to it could be training chefs at outlets for how to make these bases and the proper measurement of size and everything. If the customers themself see it they would be happier and sound towards pizzas as they would consider it hygienic and fresh product. The price of pizzas at Dominos is quite reasonable that even people from lower middle class could sometimes afford it. Still company must introduce some varieties for rural class of people to expand company’s revenue.

International markets are another step in operational process technology which should be improved and enhanced. At present domestic market of Dominos is shrinking while it has shown a rise in international markets, hence company must think of it as well as an alternative.

In today’s time international market is growing strong and Dominos as well.  It has been researched that the global market is developing a taste for fast food and especially pizza, mainly because of falling dollar w.r.t U.S., rising appetites for pizza and rising incomes abroad, hence expanding international market can prove to be a great approach to grow revenues and presence worldwide (Long, Dulwich and Gay 2015).

Because of its popular brand name Dominos could expand its market with little marketing, distribution and other incremental infrastructure growth. Also, as the company has a business model orientation as franchisee based it is easy to expand with little working capital and expenditures. Also, in last 60 consecutive quarters international revenues of Dominos has always shown positive results with a zero negative. Hence, expanding globally is a great way for long term growth internationally.

As per other operational process technology is concerned it has its own benefits too. Changing pattern of, manufacturing base pizzas at home location and exporting to other nations to training employees to make base pizzas and dough at the outlet itself can prove to be great start for the company as it would be easy to manage inventory and the loss incurred from expired and torn out material would be minimum.

Long Term Benefits

Manufacturing base pizzas at home location and exporting to other nations is beneficial from many aspects as the cost of importing and exporting will be minimised and freshness in the product will be maximised. This will boost up the company’s revenue as the customers could see with their bare eyes, the making of their pizza. This will increase the trust and faith of customers in the company (Long, Dulwich and Gay 2015.

Goodwill of the company will increase in both markets international as well as domestic. This will also give high rise to Dominos amongst its competitors as today’s generation is hygiene and health conscious so they would definitely prefer fresh over preserved.

As far as the budget and costs are concerned implementation of this change would lessen the entire cost of the production, as the preserving cost of dough and base pizzas at inventory would be saved. Also, the transportation costs will be saved including taxes in importing and exporting material. Though there will be a little extra overhead as a need to train employees in making pizza’s base to meet the quality of Dominos and also to preserve its brand name. Still it is very less compare to the cost of preserving it as the trucks has to be fixed at a proper temperature so that the contents inside remain as it is and if due to some reason they fail, entire quantity has to be discarded (Li and Wearing 2014).

Cost of expanding international markets would need a little extra amount as capital and expenditures but it will still be less because of its franchisee-oriented business model. Dominos popular brand name will allow it to expand with limited infrastructural costs and limited marketing and advertising costs. Dominos has shown a recent spike in its revenues and company could use its extra cash flows to invest in entering emerging markets. To attract more franchisee owners in different countries, company could increase franchisee’s incentives and could also lower down the fees concerned with it. Company can also increase revenue-sharing percentages in the franchisee’s favour (Long, Dulwich and Gay 2015).

To implement the expansion of franchisee stores, its compensation and benefit overseas Dominos must provide various kinds of franchisee supporting programs. The company must originate a training programme for the employees to provide appropriate knowledge regarding company’s policies, rules and regulations, how the company does functions as well as the other important elements relating company’s commercial business.

One of the crucial steps in expanding internationally is attraction towards franchisee because licencing and franchising system is the main point mode of company’s entry in international markets. To attract new franchisees FDS must provide a proper strategy for recruitment process: “Franchisee Development Services publications like ‘The Franchisee Magazine’ are the right vehicle to carry editorial that reports on facts as provided by the Domino’s Pizza Franchisees. This notifies explorers who are seeking for the brand and system that will form the idea vehicle with which to achieve business success (Horvitz 2010).

To effectively grow its international chain Dominos must effectively work with local pizza chains globally. Dominos must also use other modes for expanding its business in foreign markets such as opening stores which are solely company owned. This will generate revenues completely on the basis of sale and not royalty. Thus the percentage of profit will be much more than royalty trend because in that case a large percentage is being given to the franchisee owner (Li and Wearing 2014).

To implement the idea of change of pattern in manufacturing base pizzas and other related tasks company could opt to introduce benefits scheme amongst employees by offering them a test of making dough and bases, that who all qualifies in the test with the same exact quality Dominos desires will be given a hike in their salaries. Also, their work load will be lessened as they do not need to work at other areas of the outlets except for making pizzas. Along with it, company must recruit potential new staff for the same in case existing employees do not meet the expectations.

Another step towards cutting cost and providing fresh materials to customers is by deciding its own logistics model and developing its procurement strategy for its key raw materials like spices, tomatoes, baby corn, wheat etc. Dominos must consult local providers and growers of vegetables and spices instead of exporting it from its own country. Company could arrange almost every type of vegetables from the local market easily and even at cheaper costs in markets like India, Bangladesh etc. Hence, it would be cut the transportation costs and will enhance the freshness in the products (Horvitz 2010).

Conclusion

It is believed that pizza has a global appeal and demand for pizza at doorstep without paying any extra costs are growing internationally on daily basis. Though Dominos is successful in building a large platform in international markets, still there are many doors of opportunities and necessities for it to grow and expand. Being in top ten amongst international markets Dominos must think of being half of the total long-term potential store base in these ten markets.

Instead of deciding on just one perspective to improve and implement, it is advisable to include all three discussed above which are the part of operational process technology. Apparently, Domino’s must not stop its existing services and must continue to provide its clients their tastes. Additionally, they must keep growing in worldwide markets by pushing their propelled innovation into areas that does not have a great deal of those alternatives accessible like pizza hut and U.S. Pizza stores.

There are many opportunities for the company in the real market. It could grow in the developing countries as people there are becoming more aware. Also it could introduce more products that are low in calories and it could even overcome one of its weaknesses by implementing this idea.

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