Domino's India Logistics Management
“We are more a logistics company than a food service chain.”
“Supply chain management is the factor that differentiates the winners and the losers in this business.”
- Pawan Bhatia, former CEO, Domino's Pizza India.
INTRODUCTION
In early 2000, Pawan Bhatia, the CEO of Domino's Pizza India (Domino's) was a man in a hurry. Ever since Bhatia took over as the CEO of Domino's in November 1999, he had been frantically reworking the pizza chain's India strategy. Bhatia was planning to open 150 new outlets by the end of 2002 covering 23 cities[1], including Bhubaneshwar (Orissa) and Jamshedpur (Bihar).
In late 1999, Indocean Chase, the private equity fund bought a 25% stake in Domino's operations in India from the Delhi-based industrial family, the Bhartias, who held Domino's franchise in India. Domino's told investment bankers at the fund that it planned to go in for an initial public offering (IPO) in the next two years. Indocean Chase advised Domino's to go beyond its 16 outlets in Delhi to exploit the potential in the pizza delivery business.
Unless a well-thought-out expansion plan was put into place, the IPO was unlikely to find too many takers. 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 customer's.
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. However, volumes were expected to increase when Domino's planned to open new ...