Report on

Supply Chain Management of Domino’s

Submitted by:

Ajay Singh Chauhan PGDM/2nd sem/201027

Manab Jyoti Gogoi PGDM/2nd sem/201028

Raja Das PGDM/2nd sem/201029

Joseph Mukherjee PGDM/2nd sem/201030

Bimalendu Konar PGDM/2nd sem/201031

Partha Sarathi Paul PGDM/2nd sem/201032

Nilam Pokhrel PGDM/2nd sem/201033

Nilam Das PGDM/2nd sem/201034

Jyoti Ray PGDM/2nd sem/201035

Gaurav Tripathi PGDM/2nd sem/201036

INTRODUCTION

Domino’s pizza stores are operated by Jubilant FoodWorks Limited, a food-service

company which holds the Master franchisee rights for Domino’s pizza for India, Nepal, Sri
Lanka and Bangladesh. In January 1996, the company opened their first Domino's pizza
store. In September 14, 1996, the company was converted into a public limited company and
the name was changed to Domino's Pizza India Ltd. The Company was formerly known as
Domino’s Pizza India Limited but changed its name to Jubilant FoodWorks Limited (JFL) in
September 2009.
Domino’s has built a niche in the home delivery arena and has built a branding
strategy around it. In the year 2004, they launched '30 minutes or free' campaign which
promised a quick and fresh delivery of pizzas at the customer’s door step. Presently Dominos
uses occasion based segmentation as the most important way to segment the market. For
family celebrations and small parties the emotional component of “Khushiyon Ki Home
Delivery” and the implicit feeling that it is not just food but happiness which is getting
delivered makes it an attractive option for family celebrations.
The company was the largest pizza chain in India and one of the fastest growing
multi-national fast food chains between 2006-2007 and 2008-2009, in terms of number of
stores. As of March 11th, 2010, the company operated 300 stores in India located in 20 states
and union territories, as well as 5 stores through a sub-franchisee, DP Lanka in Sri Lanka, all
in Colombo. Their Domino's pizza stores in India are generally located in neighborhood
markets in urban areas. Out of 300 stores in India 234 stores also had the dine-in facilities, as
opposed to their global strategy, where the main focus has been on home delivery. It also
operates pizza stores located in food courts in shopping malls and in institutional campuses. It
is currently based in Noida, India. Below is a map of India showing the cities in which it
operated pizza stores.

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SUPPLY CHAIN MANAGEMENT
Initially, Domino’s had a simple supply chain model. It had three commissaries in
New Delhi, Mumbai and Bangalore, which worked as self-contained, independent outfits.
They bought their own wheat, tomatoes and other ingredients, processed them, then delivered
them in refrigerated trucks to each outlet. But increasingly, as volumes began to grow and
more towns were brought under the fold, the model stretched far too wide. In January 2000,
Domino’s began rolling out its own logistics model.

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 Domino’s plan to expand the business led it to revamped its entire supply chain
operations, from sourcing raw materials to shipping them for processing at a central location
to delivering it to the customers. Domino’s first decided procurement strategy for its key raw

materials like wheat, baby corn tomatoes and spices. For instance, wheat was cheapest in
Jalandar’s wholesale market. Its refrigerated trucks got the wheat back to the commissary in
Delhi.The Commissary processed the wheat and prepared the pizza dough. The pizza dough
and other items prepared in commissaries were then sent to the retail outlets again in
refrigerated trucks. The temperature inside the truck was fixed based on the distance between
the retail outlets and the commissaries. This was to set the dough at a particular level when it
reached the outlets. The retail outlets had to use up the processed dough within three days of
delivery. If they failed to do so for some reason the entire quantity was discarded.

As the trucks had to go through Chandigarh, to reach Jalandhar, and since

Chandigarh was a potential market for Domino’s products, it opened an outlet there. The cost
of entry was very low because there was no additional transportation cost. The same logic
was extended to Shimla. From Chandigarh, Shimla was just a three-hour drive away with a
large market, especially in the tourist season. And on the way back to Delhi, the trucks pick
up cheese from Karnal, a town on the Chandigarh-Delhi highway. This cheese was
transported to its commissaries across the country

Based on the agricultural map of India, Domino's looked for the best product at the
lowest cost.Thus, tomatoes come from Bhubaneshwar, spices from the south, baby corn from
Nepal (where it's 40% cheaper than in India) and vegetables from Sri Lanka (Refer Table I).
Similarly, Domino's India planned to extend its operations to Nepal, Sri Lanka and Dhaka.
The company planned to establish a commissary in Sri Lanka. 

TABLE I
OUTSOURCING THE INGREDIENTS
Wheat
 Jalandhar (Punjab)

Cheese
 Karnal, Haryana

Tomatoes
 Bhubaneshwar, Orissa

Spice  South India

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 Baby Corn
 Nepal

Exotic Vegetables
 Sri Lanka

Pepperoni
 Australia

Jalapeno
 Spain

Supply chain model of Domino’s

There were three obvious benefits of the revamped supply chain model:

1. Lower transportation costs

2. Cheaper procurement
3. Economies of scale.

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 It also cut out the duplication in procurement and processing of the raw materials
across each of the three commissaries. Based on the agricultural map of India, Domino’s was
looking for the best product at the lowest cost. Identifying specialty crops in each region also
had strategic implications for Domino’s. It allowed the commissary in a region to specialize
in processing a particular crop. For instance, the commissary for the eastern region in Kolkata
was responsible for buying tomatoes, processing them and then sending them to all the other
commissaries. Similarly, the northern commissary sent out pizza bases. This way, not only
did it cut out duplication, the dangers of perishability were also minimized. Domino’s also
planned to use its fleet of 25 refrigerated trucks to transport products of other companies on
the same route. The savings from the logistics model and money from third-party
transportation was passed on to customers in the form of lower prices.

LOGISTICS
Domino’s has an association with GATI for meeting its distribution and logistics
requirements. They have a Logistics requirement for sending frozen foods, which have to be
sent at a temperature of minus 18 degree Celsius and of refrigerated trucks in which food is
sent at a temperature range of between 1 to 4 degrees Celsius.The four commissaries
(Regional Centralized Facilities) – Delhi, which serves the whole of North; Bangalore, which
serves whole of South India; Kolkata for the Eastern region and in Mumbai, serving the
whole of Western India. There are inter-commissary movements that are regularly required
too. In the North, they make fifteen deliveries a month in stores in NCR and approximately
ten deliveries a month to outstation stores, which are in excess of hundred in total. Also they
use reverse logistics to pick up material from the vendors to their central facility in Delhi.

REFERENCES:
 http://www.icmrindia.org/casestudies/catalogue/Operations/OPER005.htm

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 http://www.capitaline.com/user/framepage.asp?id=1&treeid=1

 http://investing.businessweek.com/research/stocks/people/board.asp?ticker=9515743

 Jubilant Foodworks IPO prospectus Jan 2010

 Mr Yogesh Singh-Logistics Manager

Domino’s Pizza
Ph. No.-9810306880