Case 04 Dominos Pizza Distribution Strategy

SCM Case Presentation

Dominos Pizza Distribution (DPD)

Mission Statement : Exceptional People On A Mission To Be The Best Pizza Delivery Company In The World

Dominos Pizza Distribution Center Services

Food servic e
Equip. & Supply (E&S)

The goal of DPD is two-fold: 1) Streamline supply chain, eliminate non-value added activities 2) Reduce/eliminate logistics activities that stores need to perform

Distribution Structure

Pizza Outlet (4500)

Distribution Center (18)

Characteristics of Supply Chain

Few SKUs Known customers Pizza Outlets:
Accessible demand information

Complexity
High Volume, High Velocity - 10000 deliveries per week Synchronous Processes Consistent product quality, standardization

Present Performance Metrics

10-15 hour order cycle time from initial order entry to dispatch Actual delivery time 2 to 24 hours

No order cut-offs even after the truck has left

Currently ship 98% of their deliveries 100% correctly

Example of SC complexity
Information system solution provides a planning engine that allows this dynamic product planning

4 million pounds of dough produced and delivered to stores every week

Dough Distribution

Dough that is too young or too old shouldnt be used

The dough is shipped keeping in mind the time for delivery

Shipment is initiated when the dough is young

Evolution of IT Systems in DPD

1980s : UNIX based customized systems

Late 1990s : Strategic Shift towards ERP

Why ERP?

Integration of all systems

Work-Flow Driven, Real-time visibility

MIS system implementation

Optimized inventory Monitoring and co-ordination Dynamic delivery: Pizza dough according to age Sustainable competitive advantage

Distribution Requirements Planning (DRP) system

User sets inventory control parameters Calculate the time-phased inventory requirements

Improved Customer Service

Technology Choices PeopleSoft EssBase Cognos

ERP Pure Internet Architecture (PIA) Distributed operations support DBMS Multidimensional platform for Analytic applications support Business Intelligence/ DSS Cost Management System

Modular

Build around the software

No significant modifications

Dynamic Planning

View operations as a single unbroken supply chain

Optimize Distribution

Materials management

PeopleSoft

Spare parts and replacements

Quality control of purchasing

Improve supply chain practices

Reduce inventories Shorten cycle time Reduce idle time 10 Optimize setup and tear-down costs

Forecast to Cash Model

Supply chain
Re-Engineering Eliminates Departmental outlook Include Non-core processes Integrated view of supply chain activities

Phased Implementation
Phase I Implementation

Phase I Design
Phase II Design

Phase II Implementation

Phase 1 : Core transactional functionality, Basic DSS & Planning

Phase 2 : Greater functionality depth in processes to increase efficiency and effectiveness. Sophisticated integrated planning and advanced decision support

Implementation
Communication of operational vision
Communication programs of DPD

Functional Training
Training on new processes

Involvement in Design & Implementation

CFTs for design & involvement of all in implementation

Advanced Systems End User Training Technology Support