Q1.Why did Domino's decide to revamp its supply chain operations in India?

"Let's order a pizza!" It's a common phrase uttered thousands of times

each year in households around the world. When the pizza is finally
delivered, the last thing we think about is where its ingredients came
from. We are usually too busy stuffing our faces. However, if the pizza was
stale or had spoiled ingredients, we would immediately have a negative
perception
of the
pizza shop. After all, freshness
counts.
Domino's Pizza (Ann Arbor, MI) realizes the importance of fresh
ingredients. In 1999, the company sold 360 million pizzas and reached
$3.36 billion in sales. In the United States, Domino's distribution division
ensures that its 18 DCs (distribution centers) are never overstocked or run
out of fresh ingredients. These DCs supply more than 4,500 Domino's
Pizza outlets with items such as pizza dough, sauces, toppings, and even
boxes
for
the
pizza.
In 1999, the DCs relied on general desktop computing tools and Excel
spreadsheets to create forecasts for ordering supplies. Often, the DCs
ordered an extra supply of products to create a "safety stock." If the
perishables in this safety stock were not sent quickly enough to the
Domino's outlets, the company had to throw these items out. Additionally,
in some emergency cases, the DCs were forced to pay expedited freight
charges to deliver products at the last second. Domino's executives knew
they had to improve the company's forecasting methods. The company
needed a real-time system that would:

allow Domino's to increase inventory "turns" (This refers to how long

inventory is kept at a DC. Since many of Domino's items are
perishable, it is imperative to "turn over" this inventory quickly.)

improve customer service by reducing out-of-stock ingredients

increase efficiency in its purchasing process

adjust stock for variables such as bad weather and coupon

promotions.

Q.2 How was the new logistics model superior than the old model?

Q.3 Briefly explain the benefits Domino's derived after the revamp.
By the summer of 2005 when the upgrade to Prescient 6.3 was complete,
another gap in the order management system was revealed. Dominos needed

the ability to stagger inventory receipts. For example, one distribution center
receives five truckloads of frozen meat toppings per week. But because of space
constraints and shelf life, the distribution center wanted to receive one truckload
per day for five days to preserve freshness, but still run only one weekly order
generation. Some products have a 14-day shelf life, says Simonte, so the
difference between a Monday and a Thursday shipment can be dramatic.
Prescients development and support team created a solution to help
accommodate this requirement.
At the same Dominos distribution center the freezer has about 200 pallet slots,
or approximately 8.3 truckloads. Before, Prescient would schedule the five
weekly truckloads of frozen meat toppings to arrive and load up in one day; and
on the next day warehouse labor might have had little to do. But with the new
optimized order logic, Dominos could load one truck per day optimized for the
most efficient delivery.
This way, truckloads contain the amount of product a distribution center will use
in one or two days not a week. Similarly, other ingredients and supplies such as
pizza boxes ship daily (when there is a need) instead of weekly although the
forecasts are still made on a weekly basis. Staggering, says Simonte helps us
maximize our overall supplier chain efficiency.
According to Simonte, in addition to the speed and ease of order generation,
another benefit of Prescient is how it has improved internal training. In the old
days, a new planner had to learn the way his or her predecessor did things. And
since each planner did things differently, this was not the smoothest way to
orient new hires. Now, since planners learn a more uniform approach, training is
easier and less time-consuming. No more keeping data in planners heads or
spreadsheets, says Simonte. Instead, Its all on Prescient. This new approach
allows Dominos inventory management a more consistent output than ever
before.
With Prescient, instead of spending three-quarters of the week manually putting
orders together, Dominos planners can focus more time and attention on
making strategic decisions. For instance, on Mondays, planners review last
weeks data, identify exceptions, and learn how accurate they were the prior
week. By Tuesday, with an up-to-date forecast in hand, planners will kick off a
batch job say 7-10 truck orders (30-50 shipments) per distribution center. After
scanning the data and making small adjustments, the orders are transmitted to
Dominos ERP system. On Wednesday, after receivingorder confirmations,
planners simply repeat the process for freight orders. In short, Prescient was the
perfect ingredient for delivering efficient supply chain solutions to Dominos.
Thats because Prescient understands its clients business issues at a level deep
enough to provide advanced olutions that streamline operations, improve
quality, and save money.