CHAPTER III

RESEARCH MATERIAL & METHODOLOGY

As the title of the Thesis mentions the researcher embarked on the study prompted by a desire to

find out what areas should a fast foods business man concentrate on to deliver customer

satisfaction. There obviously would be several pointers to the issue. But the researcher based on

past professional and work experience felt that supply chain dynamics played a definite role in

bringing about efficiency in many business, and fast foods would be no exception. Hence the

researcher chose the topic of role of supply chain efficiency in enhancing customer satisfaction

in fast foods business.

Customer satisfaction is an area, that has a lot of complexity. What may satisfy one customer

may not hold true for another one. Even for a particular customer the satisfaction parameters and

levels may change time to time. In case of fast foods outlets the offering is a combination of

tangible products comprising the food items served. This would comprise not only the main food

items but also may have with it accompanying materials comprising the cold or hot beverages,

sauces and fillings as well as fresh vegetables and salads. The taste, freshness, preparations,

temperature conditions all would have a role to play in delivering customer satisfaction. Even the

level of garnishing, levels of spice and conditioners all would have a role to play.

Adding to this the price of the product may also have a significant role to play in the process.

While some may like a cheap product there may be others who would look down upon cheap

priced items, making a mental association of cheap items with substandard products. Just

because the item is cheap may not appeal to certain individuals who may be very finicky about

quality.

Fast foods being a service customers would also look at issues beyond the usual four elements of

the marketing mix viz. product, price, place, and promotion, and which are people, processes,

and physical evidence. The product in this case being fast foods which means a quick service

meal, the price would have that much influence as price can have in case of impulse purchases.

Hence in terms of customer expectations and satisfaction levels, the marketer would have to look

at the areas of processes, people, and physical evidence. Some one looking for a meal would

necessarily expect to have the locale and surroundings clean and inviting. If minimum standards

of hygiene are not met every possibility exists of the customer shying away from the outlet. This

being a hygiene factor a study was felt necessary as to which could be the motivating factors that

could ensure customer delight. It was obvious that in case of a food outlet issues concerned with

supply chain would definitely play a very decisive role.

Objectives

1. This study was undertaken to examine in details the role of supply chain management in the

proper functioning of large fast food outlets in the Mumbai Metropolitan area.

2. It was also to study in detail the supply chain processes deployed by large fast food outlets.

3. The study would establish customer satisfaction parameters in large fast food outlets in the

city of Mumbai.

4. The study would configure yard sticks for evaluating efficient supply chain functioning.

5. The study would find linkages between efficient supply chain functions and customer

satisfaction at fast food outlets.

6. The findings would have value for large fast food entrepreneurs in their supply chain

strategy formulations.

7. The study would also document separate ways of managing supply chains by different

players.

This would serve as a model guide for large fast food business operators.

Hypothesis

Based on above objectives, the researcher proposed the following hypothesis:

H1 Efficient Supply Chain Management in large Fast Food outlets ensures enhanced customer

satisfaction.

H2 Inefficient Supply Chain Management in large fast Food outlets results in customer

dissatisfaction.

In case fast foods outlets which had efficient supply chain management were to be termed A and

fast foods which did not have efficient supply chain management B, then the study would have

to establish that there would be significant difference between A and B as far as customer

satisfaction was concerned.

Methodology

Based on the above objectives, the researcher decided to approach the study from the following

angles:

A detailed review of articles in the field of marketing, touching upon consumer behavior and

customer satisfaction, would give insights into aspects that influence customer delights.

Simultaneous review of literature and articles in areas of supply chain management, would give

clarity on aspects of logistics and supply chain management which fast foods outlets could

concentrate upon for better supply chain management.

The study was based partly on secondary research, through literature survey, collation of data

available on the internet, published papers dealing on the subject, and lay publications viz. news

papers and magazines. The other part viz. Primary research was carried out covering fast foods

outlets as well as customers of fast foods outlets.

The research philosophy was to study how successful fast foods outlets run their supply chains.

This could be done by meeting up with such outlets, observing their functioning, talking and

discussing with their officials and from that drawing up conclusions. Apart from the running and

administration of the supply chains these fast foods outlets also ensure that customers

patronizing their outlets obtain overall satisfaction. How they look after those aspects also was

observed by the researcher.

Sampling & sample size

Estimated universe of large fast food outlets in Mumbai Metropolitan was pegged at around

ninety. (http://yellowpages.sulekha.com/fast-food-restaurants_mumbai) Out of this a sample

of 10% ie. 9 large fast food outlets were studied, in terms of their supply chain processes and

practices. These outlets were visited by the researcher, and observational research was carried

out. The times of visit were altered to ensure capturing of operations at different times of the day,

so that the study could bring out data that were not influenced by similar timing.

As to research covering customers, convenience sampling was used. The sample was picked

from representative target consumers. While circulating questionnaires to prospective

respondents, randomness was ensured by having male, female, different age groups ranging

between 18 years and 50 years, in the respondent groups.

To decide on the sample size the researcher looked at two parameters viz. margin of error, to

establish confidence intervals and also confidence levels. Margin of error is the positive and

negative deviation one allows on the survey results for a sample. This in other words is the

deviation between the opinions of the respondents and the opinion of the entire population.

For example if 90 % of the survey respondents give an opinion then a 5% margin of error would

mean that one can be sure that between 85% (90% - 5%) and 95% (90% + 5%) of the entire

population would give the same opinion. Confidence level would indicate how often the

percentage of the population that gave the opinion would actually lie within the boundaries of the

margin of error. Thus at a 95% confidence level one can say that 95% of time the populations

opinion would be within 85% and 95% of the same opinion as given by the sample surveyed.

Table No. 3.1: A typical sample size calculator would be

Population

size

Confidence level 95% Confidence level 99%

Margin of error Margin of error

5% 2.5% 1% 5% 2.5% 1%

1000 278 606 906 399 727 943

10000 370 1332 4899 622 2098 6239

100000 383 1513 8762 659 2585 14227

500000 384 1532 9423 663 2640 16055

1000000 384 1534 9512 663 2647 16317

Source: Didier Dierckx

So with a 5% margin of error and at 95% confidence level, the researcher gathered responses

from three hundred and eighteen respondents and analyzed the same. To understand customer

satisfaction parameters, two focused group discussions were held on the basis of a mixed lot of

large fast food out let customers. A questionnaire was prepared on the basis of focused group

discussions and 300 odd customer responses were obtained. Customer responses were pertaining

to all fast food outlets which they might have patronized in the recent past. In the questionnaire

they were given names of 27 fast foods joints about which they were to comment on two

parameters. One was about their rating each of the outlet in terms of performance on parameters

indicative of good supply chain practices, and the other was about their recording of satisfaction

levels experienced at that particular fast foods outlet, patronized by them. Linkages of efficiency

or inefficiency in the supply chain and customer satisfaction or otherwise were thus established.

Scope & Limitations

Scope of study

The study covered large fast food outlets. Large fast food outlets were those who had more than

one out let in the Mumbai metropolitan area. They might have take away as well as seating and

eating in facility.

Limitations of research project

Small fast food outlets including road side vendors were not part of the study.

Utility of the research project

The research would contribute to knowledge base in the area of supply chain management.

Management students would understand the role of supply chain management in the

enhancement of customer satisfaction levels. Practitioners would also benefit from the findings,

to use resources and budgets for successful implementation of supply chain management

initiatives, in the fast foods industry. The research would also open up scope for further research

in related issues, like amending supply chain processes to improve customer experiences in the

fast food category.

Profile of Fast Foods outlets selected for study in Mumbai

Now coming to Mumbai, one can say that in terms of fast foods consumption Mumbai has come

a long way. Mumbai and its people have developed a taste for fast foods. Even though one may

call it unhealthy, one may call it unhygienic, and one may even claim to avoid it, but fast food in

a fast city like Mumbai is almost unavoidable. In terms of variety fast foods may range from the

samosa one picks up at a joint when hungry, or the batata vadas vended openly at street corners,

or french fries one relishes as a snack at a little upmarket stall, all of these constitute the fast food

chains in the city.

A city like Mumbai is brimming with buying power and people with selective lifestyles. News

papers carry articles regarding eating habits of Mumbai populace be they adults or children.

There are instances of school going kids who simply hate home cooked foods. They would like

to gorge on burgers and noodles every time they feel like eating and to top it all they would

wash the same down with some cola based soft drink.

The Associated Chamber of Commerce and Industry of India has gone on record stating that the

food habits of people in most of the metropolitan areas has undergone a sea change. Rise in

income accompanied by both of the spouses working and therefore having irregular home return

times, all the members are becoming dependent on out of home eating. Availability of numerous

food joints nearby is only fuelling further this propensity to patronize fast foods joints. So it can

be reasonably successfully predicted that urban population will remain and continue to be the

largest consumers of processed foods because of their ever growing income levels and changing

lifestyle. These attractions have grown in intensity because the customers’ habits and eating

ways have also changed radically.

Most of the population comprising people who work for a living, and living in cities in nuclear

units, find the proliferation of fats foods joints actually a blessing as it allows them to cut on their

energy, costs and save time as well. Some of the fast food which may come under the ready to

cook category also help them to save time that was earlier required to prepare and cook , and so

give them the benefit of time on hand for other works. The marketers of such fast and ready to

cook foods also have developed the art to make foods of the customers’ choice.

Any occasion some one talks of fast foods the picture that comes to mind is only French fries,

burgers of different kinds, and sodas and milk shakes. But of late an increased awareness about

nutritional values in food and consciousness about the harmful effect of common fast foods

customers are leaning towards low calorie, low fat, and light to eat items. Today fast foods are no

longer limited to French fries and burgers alone. They are also catering items which are

reasonably high on health quotient.

While the general intake and patronage of fast foods are on the ascent and more so when the

younger generation are concerned a simultaneous concern about the not so healthy repercussions

due to excessive intake of such foods is also raising its head. At times fast foods such as ham

burgers, and other traditional items such as vada pav, samosas, fried potatoes and chicken are not

very good for health, because not only are they steeped in saturated fats and trans fats, but at the

same time they lack any semblance of fibre not to speak of vitamins or for that matter mineral

supplements.

The net effect of such consumptions are that they build up fat deposits around the waist line and

clog the heart flowing arteries and other tubes through which the heart is supplied blood with low

density lipo proteins. These in turn result in several maladies which currently are termed broadly

as life style maladies viz. blood sugar problems, blood pressure problems, cardio vascular

diseases, and mere overweight problems. The disturbing trend is that these symptoms are now a

days manifesting even in young children some times not older than six to seven years.

In order to ascertain what factors may contribute to customer delight in an Indian fast foods

outlet, 5 focus group discussions were conducted, amongst target group of fast foods outlets

customers.

The constituents of these focus groups ranged between 7 and 10 personnel per group.

Selection of constituents was on basis of convenience, but representation was given to males and

females, and the age group was kept between around 15 years and around 50 years, bearing in

mind the fact that personnel below the lower limit and above the upper limit, may not be making

decisions regarding choice of outlets very independently on their own.

Some of the comments captured during the focus group discussions were:

1. “The food of the fast food restaurant should be hygienic and fresh. Restaurant should not

serve food which is stale or which they have purchased long time back.”

2. 2.“The food items need to be safe for consumption. It should not happen that when we

consume the food, we fall ill. The food should be of good quality”.

3. “The surroundings of the joint needs to be clean”.

4. “If the place is dirty or looks unhygienic people would not like to visit the fast food joint.

Dirty place gives a feeling of unhygienic food as well”.

5. “The food that is served should be tasty. If the food is not tasty then people will not prefer to

go there”.

6. “The fast food joint should provide a good variety of food items on their menu. If there are

very limited food items then people will prefer a place which offers a wider variety of food

items”.

7. “The food should not be very expensive. It should be affordable enough to buy or else they

will prefer other food joints”.

8. “The ambience of the place should be good. If the place is too loud or noisy then people will

not prefer it”

9. “The waiters should be friendly and kind to the customers”

10. “The service should be quick. They should take as minimum a time as possible to serve them

and complete their orders”.

11. “All the food items on the menu should be served at any time to the customer, for a customer

it is very frustrating to hear that the item that they ordered is not available today or cannot be

served because it’s over”.

12. “The seating arrangements should be comfortable, the chairs or couches should be

comfortable so that customers can enjoy their food comfortably”.

13. “The fast food joint should play some good music which would add to the great mood while

enjoying the food”.

14. “The place should not be too crowded”

15. “There should be no waiting time to get a seat”.

16. Based on the above a list of a few of the identified attributes that decide the level of customer

satisfaction in a fast foods outlet were :

1) Freshness

2) Taste

3) Variety in menu

4) All time availability of all items on the menu

5) Promptness in service

6) Ambience

7) Friendly approach in service to customers

8) Food should not be very costly – price should have a parity with the offering

9) Quantity per serve

10) Cuisine

A few other factors which were mentioned were :

11) Parking facility

12) Happy hours

13) Crowd at location

14) Reservation facility

15) Size of family that could be accommodated at a time

These attributes were grouped into

1. External Factors

2. Internal Factors

1. Some of the external factors were:

1) Increase in disposable income levels

2) Population Growth

3) Changing lifestyle

4) Standardization of taste and quality

5) Rise in BPO culture

6) Urbanization and globalization

2. Some of the internal factors which drove the sales, on the other hand were:

1) Served fresh and hot

2) Standardization of taste and menu throughout the nation

3) Quickly served

4) Clean and hygienic

5) Standardization of ingredients used for cooking.

6) Most of the items on the menu were available till the end of the day.

7) Happy meals with toys for kids.

8) Facility of celebrating birthday parties.

Of the above internal factors the two factors which were highly influenced by supply chain

management were:

1. Standardization of ingredients used for cooking.

2. Most of the items on the menu are available till the end of the day.

The reasons being Suppliers had to be very particular about the quality and standardization of the

product that they supplied to the fast foods outlet, since these products were used as ingredients

in making the food that was served at the outlets.

Any change in the quality of the products supplied would directly influence the food taste and

quality. As most customers came to the outlet considering the fact that they knew how the food

would taste, maintaining such taste and quality was very critical for the business. Thus all

ingredients that were supplied should be fresh and should meet the quality checks and standards.

Maintaining the stock of these ingredients was also an important part of the business. Since the

outlets as a standard service should ensure that all items on the menu were available throughout

the day till the shop closed, maintaining the stock levels was a major task to be managed. And

meeting such orders and demand on time by the suppliers became mission critical. It directly

affected the reputation of the outlet, and thus ensuring that they deliver the required quantity

within the promised time was of utmost importance.

At this point a study was made to capture the supply chain strategies adopted by some of

the reputed fast foods outlets. The study was conducted in Mumbai.

Study of their organization, their strategies and methods

Some of the popular fast food joints in Mumbai are: KFC, Subway, McDonalds, Candies,

Domino’s Pizza, Papa John’s, Smokin Joe’s, Tibbs Frankie.

The researcher studied a majority of these stores in detail.

1.McDonalds:

1. McDonalds Corporation is by far the WorldMarketLeader in the QSR area(QuickService Restaurant).

2. Headquartered in the UnitedStates it serves around sixtymillion customers on a dailybasis across ahundred

nineteencountries through over thirtyfive thousand outlets. The companybegan operations in 1940 as a

barbecque restaurant operatedbyRichard and MauriceMcDonald and in about eight years time they

reorganized their business asa hamburger servingputlet usingproduction line principles in their operations.

3. A majorpartof their business theyoperate on Franchiseebasis.About seventyfive percent of theirbusiness

theyoperate through thismode. Whileprimarilytheyconcentrateon hamburgers, cheeseburgers, chicken

burgers, French fries, softdrinks andmilkshakes, changingdemand patterns havemade them diversifyinto

salads, fish, smoothies andevn fruits.

4. McDonalds employs about amillion anda halfof employees across the world McDonalds earns revenue not

onlythrough runningrestaurantsbut it also makes a lotofmoneythrough investments in properties as well as

through franchisingoutlets.

McDonalds’ CorporateStrategy can besummed up as QSC & V:

1. Quality 2. Service 3. Cleanliness and 4. D Value

McDonald’s India operations started with their opening of their first outlet at vasant Lok in Delhi

in October 1996. It was also the first McDonalds outlet in the world which did not serve beef or

pork. It’s Indian entry was through joint ventures with Connaught Plaza restaurants in North &

East India, and with HardCastle Restaurants for West and South India. The chain had to contend

with areas of concern in the Indian consumers mind as to how they were preparing the burgers

offering the cheapest burgers was not an easy task. Besides preparing totally vegetarian

items was also a challenge. Additionally they also had to change items in order to cater to the

distinct separate taste of the Indian customers. Wide ranging products such as McAloo Tikki,

McVeggie, nuggets atal had to be introduced to cater to the distinct taste of the Indian consumer.

McDonalds Supply Chain

The researcher studied in detail the supply chain of McDonalds: It was observed that

1. McDonald’s Supply chain is based on the three-legged stool concept :

2. Company – Franchisees – Suppliers Logistics

3. they normally had 100 sales items in the restaurant

4. they were having 400 SKUs in the warehouse

5. they had 200 restaurants per Distribution Centres (~180 DCs globally)

6. their delivery frequency: was approx. 3 times/week, higher in urban areas

7. their vehicles had about two to three stops per route

8. they had Exclusive distributors (3PL)

9. they had a very strong quality focus (Cold Chain, HACCP,QIP)

The main suppliers of McDonalds were

1. Dynamix Dairy Industries (Supplier of Cheese)

1) they had a fully automatic international standard processing facility.

2) they operated a network of milk collection centres equipped with bulk coolers.

3) they had a dedicated quality program.

4) they also had a dedicated Research & Development centre

2. Trikaya Agriculture (Supplier of Iceberg Lettuce)

1) they operated a specialized nursery with a team of agricultural experts

2) they used Drip and sprinkler irrigation in raisedfarm beds with fertilizer mixing plant.

3) Their pack house, pre-cooling and coldroom were located at the farms itself to ensure no

delay in supplies

3. Vista Processed Foods(Supplier of Chicken and Vegetable Products)

1) they had world class infrastructure and support services.

2) they had separate processing lines for chicken and vegetable foods.

3) they operated Hi-tech refrigeration plants for manufacture of frozen food at temperatures

as low as -35⁰CMcDonald’s distribution setup was through RadhaKrishna Foodland Limited who

1. Specialized in providing services

2. they also carried out procurement qualityinspection,storage, inventory management, deliveries

data collection, recording and reporting

3. they had dry and cold storage facility Transportation trucks maintained at 22⁰ C

4. they implemented ERP software

Supply Chain Integration of McDonalds:

Figure 3.1. Flow diagram of McDonalds’ supply chain

Source: through website by researcher

Study of the supply chain practices of McDonalds reveals that there are some very unique

practices adopted by this chain which others can emulate for better efficiency. This chain is

spread across so many countries (over a hundred) and they manage over thirty thousand fast

foods outlets such a wide spread of locations. Besides they ensure a very high standard of

customer expectations in areas of cleanliness, hygiene, taste consistency and speed of delivery.

Much of this obviously is the credit of the way they manage their entire operations. In India too

they are spread across more than forty cities and have over two hundred fifty outlets.

The unique feature of their supply chain is that they outsource majority of their operations. Some

of the theories of operations management such as lean manufacturing, multi layered supply

chain, hub and spoke model are widely used by them. The researcher found that they invest a lot

in training their staff and give high priority to their front level staff being good and efficient in

their jobs. In the process they also rely on a hierarchy which is well defined and roles and

responsibilities are clear.

When McDonalds sought to open in India, one of the first issues they had to address was

cultural and religious issues connected with menu and ingredients. Different ethnic groups had

different preferences and at times taboos, which had to be respected. This would bring a lot of

pressure in standardization of menus, and consequent inventory management of ingredients. This

apart there also lay a huge problem in terms of extremely weak and patchy logistics back ups

existing in the country. So the organization devised a supply chain system that was tiered in its

approach and composition.

They created a tier I supplier group. This group was responsible for supplying products which

went into plates like French fries, potato wedges, vegetable and chicken patties, et al. now these

tier I suppliers were procuring their raw materials from another lot of suppliers who would form

the tier II group. They comprised the agricultural and animal husbandry producers who would be

supplying the raw materials such as lettuce, potato, chicken, coating ingredients and such other

items that were required by the tier I suppliers. With McDonalds controlling both these tiers of

suppliers they could ensure quality was delivered across the supply chain.

McDonalds have also invested in sprucing up the logistics support infrastructure, by arranging

either through ownership or dedicated contractual arrangement special refrigerated trucks which

transport materials from the tier II suppliers to the Tier I suppliers and also from them to the

outlets or central distribution centers under well regulated and maintained temperature

conditions.

Another feature of McDonald’s supply chain system is their ensuring that most of the truck

movements are not unidirectional but also carry back freight. This practice of reverse logistics

being factored in ensures better utilization of freight. To carry out this process effectively they

use cartons, trays, jars that can be refilled, and recycled. They also have strategically located

distribution centers across the country. For the north they have a distribution center at Noida.

Mumbai distribution center caters to the Mumbai and western region. Similarly they have a

distribution center at Kolkata and one in Bangaluru. They very well use the classical hub and

spoke model, the distribution centers acting as hubs which take care of outlets around them. A

few of their important suppliers are Dynamix for cheese and dairy products, Jain Foods for

dehydrated onions, Iceburg & Trikaya for lettuce, Vista foods for chicken patties, Kiran foods,

Riverdale, Cremica for buns, , Radhakrishnan Foodlands, McCain Foods , Amalgam Foods for

fish fillets, AlKabeer for mutton patties. These have already been stated above.

McDonalds ensures consistency in quality by strict adherence to quality standards. The onus on

maintenance of quality is put on the suppliers. They try to bind the discharge of quality

responsibility of the suppliers with satisfaction of customers. Hence if customers are not satisfied

the onus lies on the suppliers. This effectively puts the suppliers on a strict quality regimen.

McDonalds also leverages on water quality management practices of their beverage partner

CocaCola to have their own staff trained in maintaining water quality across the chain.

The researcher also found that McDonalds normally tries to stick to one supplier for one product,

and not have multiple suppliers for similar products. This has two big benefits. The supply

consistency is maintained and this is very critical in food items if taste standards have to be

maintained. The other benefit is the supplier also gives in its best to maintain status. Of course

for this process to be successful, the supplier must be chosen only after due rigorous audit. A

look at average McDonald’s menu will make it clear that they normally offer something like

thirty to thirty five items at their outlets. The offerings however come in various combinations.

They further have complexity in terms of combinations in the meals offered, such as small,

medium, large, and other such variations. These add to the pressure of stock keeping and

inventory levels. McDonalds outsourced its distribution to an outside party viz. Radhakrishna

Foodlands who manage the distribution centers. They control on the overall the truck movements

across the country. They are responsible for on time delivery. Obviously this activity requires a

lot of control over documentations. These may include invoices, delivery and dispatch

documents. Records have also to be kept properly. McDonalds has in turn set up several key

performance indicators through which it can keep track on performance of its service provider.

The factors on which they are assessed are administrative efficiency, total number of cases

managed per man hour, warehouse efficiency, overtime as a percentage of total man hours

worked, in transportation number of cases handled per trip, and overall truck utilization in terms

of capacity and mileage.

In areas of cold chain transportation, there would be different items which would require

different temperature ranges. Some products may be requiring - 18˚ some - 25˚ and others that

may just have to be transported chilled. Products would also be of types which need

transportation at just ambient temperatures. So the transporter ahs to make modifications to suit

the requirements. A particular innovative feature of McDonalds transport vehicles is that they

have side doors which enable unloading and loading of materials without disturbing the order

across the entire truck.

Another unique feature of McDonalds’ supply chain was their orientation towards a pull based

model rather than a push based one. It was replenishment oriented rather than allocation oriented.

A collaborative plan sharing basis of indenting ensures that suppliers are aware in advance of

future requirements on a very transparent mode. This helps them to in turn plan their production

and procurement. In operations a concept known as Make to Order MTO, is generally adopted

here which ensures minimum investment in manufactured inventory. Asking concerned staff the

researcher came to know that the suppliers in most of the cases were able to achieve a near 99%

fill rate.

Another unique feature of the McDonald’s supply chain method was their demand forecasting

system. Named 31Q, of which 3 stands for three years, the period the fast foods chain would

keep checking it’s plans, which normally would mean a rolling plan period, 1 standing for the

immediate next year period, for which detailed forecast is to be made, and again during this one

year period, quarterly breakups would be tracked, denoted by Q of the 31Q method. In this

exercise the suppliers are involved and hence are aware of the entire plan process. Thus there is

total transparency and collaboration cum sharing of information across the supply chain, which

in turn brings about so much of seamless integration across the process.

Individual outlets usually give a three days’ to a week’s advance notice to the distribution centers

for materials required. The Distribution Centers while catering to these requirements, raise a

three months’ rolling indent on the suppliers, and thus the chain is geared up to cater to demands

on a more or less real time basis. With over two hundred and fifty outlets spread all over the

country the other critical aspect that the system has to cope with is on time delivery. The lead

times are planned and maintained with rigor, because delays could jeopardize the efficiency of

delivery, which in turn could adversely affect the supply chain parameter of availability of all

items at all times, as well as the speed of service. Hence the supply chain system needs to ensure

that the outlets get to know the exact time of delivery of each item indented. Hence the

distribution centers need to work backwards to integrate the flow of indents, supply, and

information. The chain is known to keep a maximum of ten days inventory in the system, which

in turn can achieve a thirty six times turn around of inventory.

All the above are achieved with a complete control over the quality and adherence to food safety

requirements. Hazard analysis critical control point HACCP in short, certification is adhered to

and this in turn ensures the quality of food items which maintains quality. HACCP is an accepted

industry level certification process. McDonalds also has some in house methods to maintain and

ensure quality of food. Named supplier quality management systems SQMS and distributor

quality maintenance program DQMP these are two in house methods used by McDonalds to

ensure food quality safety standards. The first one viz SQMS is a worldwide McDonalds system

which is mandatory for adherence by their suppliers across all places. Apart from HACCP

standards this also incorporates some of McDonalds’ own methods and practices. The DQMS

applies mostly to the operations of the chains’ distribution centers. McDonalds also has team of

in house auditors to monitor and control implementations.

Taste is the next factor on which the organization keeps a close watch. To maintain and

effectively improve delivery on this requirement the chain has a very advanced sensory program

in place. For the Asia Pacific region their central control point is located in Hong Kong. Sensory

experts are trained here. The experts are sourced from the suppliers’ as well as the quality

assurance teams. At the source itself namely at the producers and suppliers plants the outputs are

tested and rated by a sensory team member. The food item is also given a grade. The scoring has

a cut off and those scoring above are only allowed out of the plant. This is also followed up by

cursory checks at the outlets, on a surprise random basis. At half yearly or quarterly periods

management teams carry out a product tasting exercise at suppliers’ locations, when they may

fry, taste and allot scores to products and ingredients. This ensures maintenance of consistency

and high quality. Besides all the above the chain also has a system of picking random samples

from outlets and getting the saem tested at the laboratory in Hong Kong.

All the above is driven by a very robust SAP based ERP system. They also have some other

systems which are integrated to offer a seamless smooth flow of information. These systems help

in maintaining high visibility of operations across the entire chain, automated replenishment

orders, progress of sales, and tracking inventory on a real time basis. The organization has

leveraged the best of many disciplines to give it a cutting edge over competition, and enhance

customer satisfaction through the best of processes and systems. .

Domino’s Pizza:

Domino’s Pizza is an American restaurant chain, which specializes in franchisee based pizza

delivery operations. It is headquartered at the Domino Farms Office Park in Ann Arbor chartered

township, Michigan US. Founded in 1960 it is the second largest pizza outlet chain in US.

Domino’s introduced a slew of innovative and novel marketing concepts in 2007 and 2008,

including franchising arrangements, mobile ordering and tracking systems. It also reinvented the

type of pizzas that the outlet served, improving the taste and formats. Hiring a new CEO it

improved its sales significantly in 2010. In 2012 Domino’s Pizza removed the word Pizza from

its name logo, to emphasize it’s foray into non Pizza business.

Domino’s experimentation with the assured delivery within thirty minutes ran into some

problems due to delivery boys getting into street accidents and settling consequent lawsuits. So

in 2007 the company introduced a new slogan “ypu got 30 minutes” which alluded to the earlier

slogan but stopped short of promising delivery within 30 minutes or refunding amounts and or

delivering the pizza free. However the company continues to offer the thirty minutes guarantee

in Colombia, India, Vietnam & Turkey. India has become the largest international Pizza market

for Domino’s outside it’s home market. In India the franchise is run by Jubilant Food Works. In

India the company had to adapt to local tastes by way of chicken tikka masala, kima dopyaza,

which inturn the company has also adopted internationally.

Supply Chain of Domino’s

The chain’s procurement process for Raw Materials is highly organized.

Raw materials like wheat, baby corn, tomatoes and spices are got, out of which wheat was

bought in from Jalandhar and then sent to the commissaries in refrigerated trucks.

They have four commissaries which are Regional Centralized Facilities. These are located at

Delhi, Bangalore, Kolkata, and Mumbai

After procurement the chain’s distribution system is organized as under:

The Pizza dough processed from the wheat is sent to the retail outlets again in refrigerated

trucks. The organization also takes care of the logistics requirement for sending frozen foods, at

a temperature of minus 18⁰C. In case of prepared foods the same are sent in refrigerated trucks

that maintain temperature range of between 1 to4⁰C.

Figure 3.2. Flow diagram of Domino’s supply chainDomino’s Supply Chain of Domino’s

Source: through website by the researcher

In early 2000, when Domino’s in India, wanted to inject more capital into its operations, through

investments from bankers as well as even a planned IPO, the chain was advised to ramp up its

operations. This in turn needed a re look at its supply chain activities, involving the entire gamut

of sourcing raw materials to transporting them to central locations for processing, to delivering

Wheat

Dough

Warehouse

Refrigerated Trucks

Retail Outlet

them to customers. Upto that point Domino’s model was a relatively simple one. It operated on

the basis of three bases which procured and sold groceries and such items. These were located in

Mumbai, Bangalore, and New Delhi. These units procured their own wheat, tomatoes, and other

ingredients on their own, processed them and delivered to outlets in refrigerated trucks. However

this model would have to be changed to cope with increased pressure of volume.

In case of Domino’s the supply chain played a more critical role as their offering being more

home delivery oriented transportation and handling costs played a very important role in overall

costs and profitability. Because Domino’s was more of a home delivery based model, it’s

dependence was more on transport rather than in locations. It also had to have in place a very

efficient back up system to take orders on call and route them properly. When Domino’s was

looking at revamping its’ supply chain management system, it could definitely look at

McDonald’s model but in terms of operational procedures and spread there were fundamental

differences between the two. Because of location spread differences centralization which could

work for McDonalds could not work that smoothly for Domino’s. So Domino’s decided to

concentrate on centralized procurement of wheat, maize, corn, tomatoes, and spices. Since wheat

was cheapest in Punjab and adjoining areas the chain concentrated on procurement there and

transportation to the Delhi processing center in refrigerated vehicles to make the dough for it’s

pizza bread. The dough thereafter would be dispatched to the outlets in refrigerated vehicles. The

chain invested in maintaining regulated temperatures in the refrigerated vans to ensure that the

dough retained proper consistency when being transported across different distances depending

on the outlets’ locations. A method adopted and perfected by them was that the dough after

receipt would have to be consumed within three days. The condition was such controlled that if

the dough was not consumed within the three days the balance would have to be discarded. What

Domino’s did was that if they found the trucks had to pass important cities en route they opened

outlets there so that the transportation would happen without incurring extra costs. Thus since the

dough trucks had to pass Chandigarh while on its way between Delhi and Jallandher, they

opened outlets at Chandigarh. This was a logic for their scaling up of operations.

Many fast foods outlets at times adopt pricing strategies keeping in tune with market demands

and customer expectations. So one may see an outlet trying aggressively to build market share by

adopting a penetration pricing on the main item and making up on the margins on other side

items. Here the logic is that the price conscious consumers who at any time form the bulk of the

customer base need to be wooed on a constant basis and for them the lower price platform may

work very effectively. The fringe customers who by and large may not be that price conscious

may be given other benefits and not only obtained through lower prices. Some times the fast

foods outlets may deliberately keep high ticket items to attract niche customers. Since price

competition is very acute in the quick service restaurant category, pricing has to be adopted with

caution and also must be accompanied with regular follow ups. While pricing by itself is a

differentiation parameter in foods category, in fast foods outlets study has shown that the issues

covered under supply chain management play a more crucial role in the whole matter. Whenever

they resort to special categories and offers where they carry out a strategy of making different

margins in separate food items the role of the supply chain becomes even more demanding.

Availability of the separate ingredients in adequate quantities to deliver the entire product mix

assumes even more significance. One can easily see that in McDonalds there is always an

emphasis to sell more of potato fries and cold drinks along with their value meals. Similarly one

would observe Pizza centers trying to sell more of garlic breads and wedges along with value

meal pizzas.

When one looks at supply chains one observes that the process of procurement involves

balancing and getting an answer to the mix of demand and supply cum sourcing of commodities

and items required to carry on the day to day business. Due to demand pressure and rising costs

of sourcing the suppliers are mostly asking for increased prices for items required by fast foods

outlets. The fast foods outlets on their turn are also most of the times not in a position to drive

hard bargains. At the same time the outlets are not very easily able to pass on the rising costs to

the customers. Herein therefore comes the criticality of the supply chain management efforts.

In this balancing act one would come across proponents of centralized procurements where in

they can drive economies of bulk buying, whereas there may be others who do not subscribe to

this theory, and would like to depend more on close to outlets sourcing which could ensure better

management. Some times the issue of reducing carbon footprints through movement of foods

over long distances could also affect decision process. Freshness and local tastes could also be

influencers in such decision factoring.

Subways the chain of sandwiches follows a method where under orders are placed every

Tuesdays and are received every Fridays, at their central depots. Each outlet places it’s order to

the central call center in such a way that these orders are routed to the central location and from

there supplies are made by bike supported delivery boys. The outlets are supplied on a

replenishment basis on a real time basis. Some outlets also dispense with central locations for

certain items altogether. Local procurement of sauces and such items are quite common.

At times these fast foods outlets may also adopt aggressive expansion plans even during periods

of slow downs. The motivation might be hopes of having real estates across the country and

capitalize on a future upturn and having a head start over competition. This may sometimes be

the reason why fast foods chains are planning to spread across tier II cities in a big way.

Quick service stores will come to depend heavily on efficient procurement strategies. Uncertain

and extremely fluctuating raw material prices are any procurement manager’s biggest headache.

Apart from rate fluctuations, inflation also is a big spoilsport. Lack of good quality common

infrastructure compounds the matter further. Every where the available common infrastructure

are either of a low order or are not maintained properly. Firms can upto a point invest and

improve infrastructure but overhauling major infrastructures are extremely costly. In this context

local sourcing and procurement assumes a lot of significance. Thus local vendors start assuming

a significant important role in the whole system. The researcher earlier in the chapter had

elaborated about McDonalds structuring their procurement on a multi layered basis. Local

sourcing also has the effect of controlling costs of materials. Many foreign fast foods outlets

operating in India, have realized that adapting to the Indian taste and palate they have to depend

on many locally sourced materials. Innovations in the areas of material contents are also being

carried out by Indian branches of fast foods outlets so that dependence on imported items can be

reduced. Some of the coffee chains have totally changed over to local sourced coffee as

McDonalds have done regarding lettuce.

ERP systems have also helped such outlets to keep track of inventory levels and supplies.

Technology has been always a great enabler of controls and efficiency. Subway has greatly

moved in to e procurements. Fast foods outlets are also realizing that instead of treating vendors

as adversaries, if the level of cooperation and sharing of plans are enhanced it may help all. At

times when any promotional offer gets underway, the vendors are able to fulfill requirements if

they are given access to the plans of the afst foods chain. The fast foods chains on their part are

also realizing that this sharing of plane ultimately helps them only, because then chances of

running out of stocks become less. Hence collaboration is slowly taking precedence over in

house competition. Of course spurts or slacking of actual demands vis a vis planned demands can

still happen but the disruption can be smoothed to very large extent. Here also the outlets are

planning on sharing or inter unit transfer of inventory to mitigate such risks. So procurement

flexibility and multiple supply chain configurations are becoming the order of the day.

Effective vendor management would therefore entail building long term working relations rather

than short term cost cutting and building margins. It is a well known fact that too much of price

squeezing on suppliers often turns counter productive, because the suppliers in turn may adopt

shortchanging tactics to cover losses or reduction in margins. In the end such measure may result

in compromising of quality or other service standards and would definitely adversely affect

customer satisfaction levels. Rather investing in means which may improve efficiency in

consumption parameters and also reduction of wastes may help. Instead of changing vendors

frequently it would help to have long term arrangements based on trust and dependability. Even

as McDonalds has done training vendors people in the ways of the fast foods chain cango a long

way in improving standards of performance. The researcher found that Costa Coffee (though not

included in the current research) had a practice of sharing with their partners like air lines

catering who would serve on board food the actual costs of items like sandwiches and agree to a

predicted commission structure such that all parties are aware about the margin build up and

sharing. This organization have also gone into reduction of costs by indigenously procurements

of paper cups which could end up in massive savings just because of the volumes involved.

Items to be streamlined are selected on the basis of Pareto principle of 80:20.

Moving further Subway has gone in for creating international purchasing cooperatives in various

regions. Being formed into cooperatives they ensure steady supplies and also ensure quality

because of long term ongoing relations. Regional supply chain advisory groups guide such

cooperatives. At times hedging short term procurements with long term procurement

arrangements are also resorted to on order to reduce impacts of fluctuations in supplies demands

as well as prices. Costa coffee has a system of three year long term contract along with short

term six monthly arrangements which keep on updating. These in combination can to a great

extent modify price fluctuations and volatility in the markets. At times in order to reduce

overdependence on single source supply units in some instances may arrange to have tie ups with

more than one supplier in certain ingredients.

The quick service restaurants often follow some broad strategies in their procurement policies

and initiatives. They often selectively pick up a few of the product items on the basis of either

Pareto principle of 80:20 or ABC classification of 10:20:70 and concentrate on those items

which can have a harder impact on profitability than the others. Thus for example in the case of a

chicken serving chain, the chicken, oil, flour, and seasoning may be the key ingredients, whereas

for a pizza outlet the important items may be wheat, flour, cheese and tomatoes. Depending on

the comparative criticality of these items the procurement emphasis may change.

The chains have to periodically reexamine the entire procurement process and flow. While a rise

in basic costs may affect the procurement price, there are several other items that migh also

impact the procurement costs. These are packaging costs, transportation costs, local taxes and

levies, as well as cost of credits. Changing minimum and maximum ordering quantities,

purchases in larger packs or lots, changing frequencies of orders, changing the format of item

like tomato puree instead of tomato sauce, obtaining at centralized location and such other

measures could also have softening effects on price volatility. At times cutting short the supply

chain by buying direct instead of through intermediaries could also play a price softening effect.

Going directly to contract manufacturers by passing the main manufacturer can also reduce

prices. These work particularly where the value chain is long. Negotiating prices with contract

manufacturers can also result in reducing intermediate mark ups and reduce overall cost of

procurement. Outlets should wherever possible realign their product portfolio in line with

procurement price indications. So if there is certainty of procurement price of certain items going

up it might make sense to realign products based on reduced dependence on such items. Lastly it

would make a lot of sense to be keenly observant of price trends on a regular basis. Vigilance

always pays.

Pizza Hut

Pizza Hut is an American restaurant chain and international franchisee who are known

worldwide for their Pizzas and side dishes. In the market the chain is known as Pizza Hut Inc. It

is a subsidiary of Yumi Brands. In 2012 the company had more than six thousand outlets in US

alone. It also had presence in more than ninety countries across the world, serving Pizzas through

over five thousand outlets.

Pizza Hut operates through various formats viz. traditional family style dine in locations, store

front delivery and carry out locations. It also has locations that offer a hybrid model which has a

combination of dine in, carry out and delivery system. Catering Italian theme dishes such as

penne pasta, chicken pomodoro, they also run the Italian Bistro under the Pizza Hut brand name.

Pizza Hut ran into some problems with the authorities in UK over excessive use of salt in their

products. Their pizza toppings were found to have salt much more than average safe prescribed

levels. Pizza Hut has massive expansion plans covering it’s Indian operations.

Pizza Huts direct suppliers include PepsiCo for beverages and Cremica Group for Buns and

bread items. They also list several indirect suppliers. They procure their chicken requirements

from Brazil. In vegetables they source potatoes from Australia. The sauces are procured from

various organizations locally.

When it comes to the distribution they outsource their operations to several parties. Snowman

Frozen Foods is their main provider for cold storage facilities. They have around sixteen

warehouses in the country, supported by a fleet of over a hundred trucks that are equipped with

Carrier and Thermo King Transport temperature control units.

The total cold storage capacity at their disposal is between a hundred and twelve hundred tones.

Pizza Hut banks a lot on communicating the freshness of their pizzas. They have roped in film

personalities to emphasize this point. Pizza crusts to be served fresh creates pressure on the

supply chain operations and the chain has to be very careful in constant monitoring of the same.

One of Pizza Huts uniqueness was that unlike Domino’s where the dough is normally prepared

in a central commissary and distributed to locations, Pizza Hut makes the dough in the outlet

itself most of the time. This ensures the freshness better.

Figure 3.3 Flow diagram of Pizza Hut’s supply chain

Source: through website by researcher

KFC Kentucky Fried Chicken

KFC was originally an initialization of the full name Kentucky Fried Chicken. This chain was in

the beginning only in selling fried chicken based fast foods. It is headquartered in Louisville,

Kentucky, US, and that is how it derived it’s name Kentucky Fried Chicken. It’s the world’s

second largest fast foods chain, only after McDonalds. Operating in around a hundred and twenty

Source: through website by researcher

KFC Kentucky Fried Chicken

KFC was originally an initialization of the full name Kentucky Fried Chicken. This chain was in

the beginning only in selling fried chicken based fast foods. It is headquartered in Louisville,

Kentucky, US, and that is how it derived it’s name Kentucky Fried Chicken. It’s the world’s

second largest fast foods chain, only after McDonalds. Operating in around a hundred and twenty

Source: through website by researcher

KFC Kentucky Fried Chicken

KFC was originally an initialization of the full name Kentucky Fried Chicken. This chain was in

the beginning only in selling fried chicken based fast foods. It is headquartered in Louisville,

Kentucky, US, and that is how it derived it’s name Kentucky Fried Chicken. It’s the world’s

second largest fast foods chain, only after McDonalds. Operating in around a hundred and twenty

countries, and through around twenty thousand outlets. KFC is a subsidiary of the Yum Brand

who also operate Pizza Hut, and Taco Bell.

Harland Sanders an entrepreneur started KFC by selling fried chicken from a roadside stall in

Corbin, Kentucky, immediately after the depression in US. In early fifties Sanders realized the

future potential of opening franchisee operations and gave franchisee rights in Utah. KFC

through popularizing chicken as a fast food, broke the strangle hood of hamburgers in the fast

foods apace. Sanders did another marketing initiative and that was branding himself as “Colonel

Sanders” which transformed him into a part of the American culture and even to this day his

picture is widely used in KFC advertising. But subsequent rapid expansions saw KFC selling

itself to an investor group. In the sixties KFC became one of the first fast foods chain opening up

internationally in UK, Mexico, and Jamaica. It’s expansion continued and in nineteen eighty

seven it was the first American restaurant chain to open it’s operations in China. Today China is

KFC’s largest market.

After opening in India by two thousand thirteen KFC was operating over three hundred and fifty

outlets in the country. Adapting to the Indian palate KFC sells vegetarian chick pea burger,

paneer burger, chicken wings and such items. In it’s Bangalore expansion drive KFC also

introduced vegetarian meals like rice meals wraps, and other side dishes. KFC also uses Indian

spices in most of its dishes to suit customer taste.

Adapting to local requirements KFC launched “So Veg, So Good” menu. However KFC local

management aver that through all this they are not moving away from their core focus of chicken

offerings, but these would only help in strengthening and broadening their customer base in the

country.

In Mumbai their menu includes WOW, snacks, burgers, toasted wraps, box meals, the usual

chicken, group meals, rice bowls and desserts. The chain has had to face some protests as well.

People for ethical treatment of animals have been after KFC regarding their practice of fattening

chicken artificially which is a cruel practice. A continued movement by PETA in Bangalore over

some period did bring about some improvements in the way all the fast foods outlets in India

treated their source of animal meat. KFC’s contention has been that on the whole their being in

the country and serving in the fast foods sector generates a lot of employment in the country,

besides their contention is that they do not directly own the chicken farms but source their

requirements from contractors.

Subway

Subway which writes their name in a stylized way and use as their logo, is again an American

restaurant chain that sells submarine sandwiches (subs). A submarine sandwich derives its name

from the fact that the sandwich is made by using a long bread roll (Italian or French bread) which

is split either into two pieces lengthwise in the middle, or it is opened into a V shape at one side

and the bread roll is stuffed with a variety of fillings be thay meat, cheese, vegetables and other

seasonings. The fillings vary place to place and thus can adapt very easily to local tastes.

This chain is owned and operated by Doctor’s Associates Inc. Subway is one of the fastest

growing fast foods chains in the field. The chain is headquartered in Connecticut. While

submarine sandwiches are their main product, they also sell wraps, salads, and a variety of baked

items. Their items vary according to the countries that they operate in. They set up base in India,

in 2001 via a master franchising, at Delhi. In India Subway do not sell beef and pork, and have a

wide range of vegetarian items on their menu. They operate over four hundred outlets in the

country, and are spread across seventy cities. They even opened all vegetarian counters in

Jalandhar and Ahmedabad. Franchisee models usually operate on a low investment cost basis.

And besides the Subway model is relatively easy to run.

Sales ex Subway outlets are highest at airports because they are large footfall areas and also

because the offerings at Subway outlets are very limited the traffic moves fast. Subway plans to

increase their presence in the country in a large way. They plan to invest in training the

franchisee staff to bring about uniformity in operations. They are aggressively planning to spread

their franchisee base across the tier II & tier III towns.

Candies

This is a purely Mumbai based quick service restaurant, and is further very localized in it’s

operations, having three outlets in Bandra West only. This outlets is known for good taste of the

food it serves. It operates take aways, home delivery as well as sit in dine as well. It primarily

sells on pure value for money with no frills attached. The outlet started operations about thirty

years back. They serve a mixed cuisine of snacks, main courses, desserts and drinks. Their

spread of sandwiches, rolls, salads, and desserts are quite wide and can cater to wide range of

tastes.

The three branches of candies have their individual style and have stamp. Candies @

MacRonells is much like a Portugese villa, with blue and white walls accompanied by winding

steps. One can opt for open sitting in the terrace or in air conditioned rooms. Candies at Bandra

Reclamation is more of a low lit intimate space which is perfect for an early dinner, a leisurely

breakfast or even a cup of coffee at any time. The one at Union Park is just for pickups and carry

away type of food. This joint caters to over a thousand customers per day, and has a variety of

items on offer.

It runs it’s supply chain, on the basis of a close knit operation, it’s main advantage being that the

chain not wide spread , the entire span of control is very manageable.

The chain has a kitchen which occupies six thousand five hundred square feet of area. All food

gets cooked at this one kitchen by a fleet of about a hundred cooks. The operations start early in

the morning and continue till evening. So all the items originate from one central place. The

cooks are organized in a way that individual cooks specialize in some specific dishes only.

Foods are prepared in batches and are sent to counters from morning. The supply chain is so tight

that a just in time type of inventory management is followed. But this is also possible to an

extent because the entire operation is not widespread. Some of their best and fast selling items

are chicken sandwiches, chicken tikka rolls and mini pastries. To ensure constant supplies are

maintained uninterrupted they keep sufficient stocks of inventory of raw materials and

ingredients. The supply chain is very well coordinated and controlled.

Papa John’s

Papa John’s is by and large the fourth largest take away and delivery mode pizza chain in the

US. The chain is headquartered at Jeffersontown Kentucky. The chain was founded in 1983 as a

very small outlet built up from used pizza making equipments. However the pizzas proved so

popular that the outlet started expanding. Though some of the outlets have a sitting place to eat

pizzas Papa John’s model is delivery based. The chain works on franchisee mode, the franchisees

paying a royalty of roughly 5% on sales. Advertisement is also co opted. The chain set up shop

in India in 2006. The chain’s operations in India is carried out by Om Pizza & Eats Pvt Ltd. The

chain boasts of offering better ingredients and hence a better pizza. They claim to deliver dough

fresh to their outlets, the green pepper are store cut to ensure freshness, their pizza sauce is

imported from California, and the meat supplied by them has no fillers. They depend a lot on

their supply chain to ensure customer satisfaction.

Smoking Joe’s:

Smoking Joe’s is a Mumbai based pizzeria which was founded in 1993. Over the years it has

expanded and now operates through over sixty stores located in other cities as well. It mainly

concentrates on Pizzas and Pizza related items. It serves both vegetarian and non vegetarian

items. Garlic breads, open submarine sandwiches, desserts, and salads are items that the chain

sells besides pizzas. Again this chain is able to operate on the basis of a close knit supply chain.

Tibb’s Frankie

This outlet was the brain child of Amarjit Singh Tibb, who during a stopover in Beirut tasted a

local Lebanese preparation made of Pita Bread with liberal stuffing of a variety of fillings, and

decides to come out with Frankie which was to have it’s unique blend of Frankie Masala. After

receiving good reviews from friends and acquaintances Frankie was set up in more outlets in

Mumbai. Tibbs over time became associated with not only good taste but also with value for

money. Now the chain boasts of over 250 outlets across the country. Over the years the chain has

made improvements in its menu, and also varieties. They have over twenty varieties of frankies

and different flavours have also been incorporated. The chain has of late redecorated their outlets

décor, they have introduced new ways of packagings, introduced the home delivery model, and

have also moved abroad.

To generally capture the feelings of customers the researcher has recorded the opinions of a few

customers and they are transcripted below:

One customer male, around 45 years of age above middle class

On my “Eating-Out” experience with fast food restaurants, I must admit that as a couple we do

eat-out regularly at a variety of restaurants and have a mixed bag of experience that ranges from

Very Good to just about OK:

McDonalds: It’s a very good experience but over a period of time it gets monotonous as the

service is very robotic to say the least. You walk-in with a greet and Namaste the traditional

India way of welcoming a guest. That’s where the customer empathy stops. Here on the

customer places his order and the order taker punches in the dish ordered and collects the cash

post which within their prescribed one minute you are served with your dish. As a customer I

find an acceptable seating place, relish my dish which at most times fulfils the taste bud needs

and makes the eat-out at McDonalds a fulfilling experience.

The items on their menu whichever you order are always consistent with taste, quality, and

freshness that leaves a fulfilling feeling at the end of the day. This is also true of whichever

location of McDonalds you choose and whatever time of the day.

On the variety offered on their menu it is seen that over a period of time and number of visits

made, the menu is very restricted and one has no choice but order from same limited choice thus

seeping in a sense of boredom for a palate tickling variety seeking customer.

One of the good developments lately, has been McDonalds has introduced breakfast on their

menu thus increasing their offerings as well as getting in a new set of customers.

Dominos: Is yet again a very good experience particularly when it comes to sitting at home

watching your favorite game and also enjoying a well done very delectable pizza. Dominos have

mastered their delivery standards extremely well such that I have had no instance till date where

my order has been delayed by virtue of which I could have been the beneficiary of a free pizza.

On the other hand as any Indian who loves Indian dishes one can’t have a pizza more than once a

month and this is where the experience with Dominos gets restricted to once a month or at best

twice monthly. Dominos too of late has been reviewing their menu spread and fully

understanding the Indian mentality have of late been increasing their options on the toppings as

also some new dishes. More recently they have also been advertising on TV channels very

aggressively which in some ways does influence customer choice.

Pizza Hut: A fast food restaurant that caters to the Indian palate and which in my view has been

evolving over time. The Pizza’s here are tasty and have a good blend of the Indian spices and

aroma that makes them the first choice Pizza for many customers.

Recently they have added a number of other dishes and in the process have expanded their

offerings in the Indian market. They have a wide choice of meals ranging from Value meals to

Weekend meals to family meals thus making it very convenient and an option of first choice.

Having said this, their service in one of their locations for a sit-in meal was found below

acceptable standards, where there were issues relating to a delayed serving, notwithstanding their

stewards being quite process driven and not understanding customer urgency on being served.

KFC: An OK place to sit and eat. KFC too like Pizza Hut is fine only up to a point where you

can help yourself. If they have to serve you then I don’t see any difference between our Udipi

restaurant and KFC as their expertise lies only with a limited menu range and self service.

My experience with KFC also tells me that it varies from location to location and I had a very

bad experience at their South based outlet wherein they erred on the very order that I had placed

vis-a-vis what they finally served me with. To make matters worse the service staff was quite

adamant that he had served me the right dish as ordered by me but was equally willing to change,

which I found very strange.

Kailash Parbhat: Is one place that I really like. This place gives me a very homely feeling and the

ambience is one that gives a warm touch to the kind of food that is served.

The variety offered on their menu makes it a very inviting place and staff serving the customers

too are quite adapt and very natural in their serving style. The food items are very tasty and have

been very consistent over the years no matter how many generations have gone by. They have a

few branches spread across Mumbai and at most of these locations one does experience a similar

service level with the dish tasting almost the same as at their original location at Colaba.

The staff, the ambience, the aesthetics are all vey Indian and it makes one feel quite at ease

especially when you are out with a family for an eat-out.

DP’s a very locally famous restaurant services a large variety of dishes and serves the college

youth largely. This is because DP’s is situated in the midst of Mumbai’s most popular

educational Institutions namely ICT formerly UDCT, VJTI, Podar & Ruia notwithstanding a

number of schools run by some very old Trusts like IES & St. George.

While the traditional VadaPavs and Misal are very popular at this restaurant, a variety of snacks

like Dosa’s, Idlis and the entire range of Chinese items too are very popular.

The ambience here is very different from a Pizza Hut or Dominos but they have their own charm

and attraction and are very popular with the local crowd. They also have a seating arrangement

outside their enclosed area giving the customers to breathe some fresh air even while having

their favourite dish.

Shivsagar: Have a number of restaurants that serve typically the Indian dishes ranging from the

traditional Idli’s and Dosa’s to the Chinese Bhelpuris which have their own flavour and taste.

Eating at the Shivsagar restaurants does deliver a sense of fulfillment with regard to quality and

content. However one has to compromise on the aesthetics & ambience which are very normal

and not very exciting or inviting to a customer.

The customer base here covers a cross section of people ranging from the youth to the adult,

single walk-ins to a full family, small time entrepreneurs, door-to-door salesmen to the labour

class to who find this ambience and food items attractive to drop by.

Another customer around thurty five years of age, senior executive in a Bank

McDonalds:When my friend visited one of their suburban store he found that their chicken dish

was not the same as KFC where the chicken dishes are more succinct and succulent in taste. He

also found the McSpciy quite good and tasty.

However this friend had a very bad experience with a very poor behaviour from one of their staff

at another location. This person was out with his family and while the restaurant was not

officially closed entry was obstructed by a table that was placed between the doors.

However on request they were allowed in but also told that they had limited service only

available and that only one or two items form the entire menu were available. This was inspite of

the friends mother pointing out to the service staff that more items were available on display and

why they could not entertain their request.

Dominos: My own experience with Dominos has been one which is very interesting and

intriguing.Interesting because no matter which location you go to and I travel a lot PAN India,

and you find the pizza tasting almost the same and the service turnaround being within the

traditional 30 mins.

Intriguing because and I have experienced this on many occasions, that the quantum of the

toppings content varies from store to store as also the person on the job at that moment who is

servicing your order. Equally intriguing is how they manage to deliver within 30mns when most

of su caught in traffic snarls almost at every nook and corner of the city. This probably explains

why of late many customer s have been complaining very bitterly about the delivery TAT of 30

mins where in many cases they have taken anywhere between 60 mins to 180 mins with no

explanation to such a violation of their delivery standards.

I am not sure if others have experienced the above but it will be interesting for the Dominos

Management to take note of the same and if found true address the same on priority as it does

leave behind a very confused customer

Pizza Hut: While the Pizza Hut Pizzas are very famous globally, and in India too, my experience

over the years has not been too comfortable. I have quite a few instances wherein they have

declined having received an order even after the same has been transacted by me, instances

where there has been an unacceptable delay of more than 30 mins with no compensation being

offered even though their services deliverables promise the same.

On checking with my friends they too have had a number of such instances which ultimately

leaves us to go to Pizza hut since your are in love with Pizzas and probably not with Pizza Hut.

KFC: Worldwide has a repute as one of the best places to have chicken nuggets and sliced

chicken pieces notwithstanding their preparation abilities to make it extremely delicious and

mouth watering. Having said that I being an ardent KFC fan have always backed my favourite

KFC for eat-outs. However, it is very disturbing to know that KFC in India has a number of

complaints about late delivery, order not being executed after having taken the same, finger nails

in chicken pieces, in appropriate billing etc that makes one wonder if KFC follows double

standards.

It will be interesting and noteworthy for KFC management to take note of all such customer

complaints and not only address the same immediately but also revert to the customer concerned

so as to seek a good word of mouth and customer recovery process since such dissatisfied

customers will never return once they leave with a bad opinion.

A few more customer reviews:

1. I visited the Mulund West Station Branch of McDonalds. I found their food to be quite fresh.

My favorite happens to be the Filet O’ Fish. I found that their customer service is very good. The

staff is very well mannered and serves customers quickly.

2. Just last week, I visited the McCafe at R City Ghatkopar. I ordered a Chicken McGrill which

was fried to perfection and served with nicely toasted buns, tomatoes and mint sauces. Another

thing I love at McD is the coke float which is a mix of dairy fresh vanilla icecream and Coca

Cola. I find McD to be a good restaurant for the whole family with hygenic food and good

service with a good value for money. The entire experience was awesome.

3. Mcdonalds or McD as everyone calls it, is a fun loving place where you can hang out with

your friends. Me and my friends, always arrange a meet up at a nearby McDonalds. I think that

they are the real king of burgers in India and they serve some awesome burgers and french fries

and the restaurant is not heavy on the pockets. As I am vegetarian, I can only comment on the

veg burgers and I think that they are delicious. It is perfect for a quick bite if you are in a hurry

as well as good to sit for some time if you want to hang out. The ambience and décor are good.

They play birthday songs if you are celebrating birthdays. Sometimes the staff is arrogant and I

have observed that they are arrogant if there is a lot of rush in the restaurant. So I feel that the

staff should be properly trained to handle people during rush hours. The washrooms should also

improve in terms of space if possible. I have found the washrooms to be quite congested.

4. Mcdonalds drive thru is a convenient way of picking up food on a trip. I have tried the drive

thru at Panvel, just before the Mumbai – Pune Expressway. I found the staff to be very nice and

helpful and I was pleasantly surprised to see that the prices were really quite reasonable. I only

wish that McDonalds gives options of non aerated drinks with the meals. They don’t normally

encourage it. I also found some of the french fries to be a bit stale. But overall it was a pretty

decent experience.

5. I’d wanted to try out the McDonald’s Breakfast for quite a long time. I finally managed to give

it a try this weekend with a friend who is a bigger foodie than I am. McDonalds serves breakfast

at some outlets in Mumbai between 7am and 11 am. I visted the one at Phoenix Mills, Lower

Parel. We managed to try many things on the menu, which isn’t very vast, but quite interesting.

My friend had the non-vegetarian meal and I tried the vegetarian meal. Both included a cup of

piping hot, surprisingly good coffee, a serving of hash browns and a McMuffin. I had the Veg

Supreme McMuffin and my friend had the Sausage McMuffin with Egg. Both were very tasty.

The hash browns were delicious and hot but were very oily. We also tried the Hot Cakes with

Syrup and Butter. These were also quite good. They also serve hot chocolate at breakfast, but

they refuse to swap that with coffee if you get the meal. I also found that the lady at the counter

refused the swap. Maybe if there was someone else they would. They also serve hot chocolate at

breakfast, but they refuse to swap that with coffee, if you’re getting the platter.

Breakfast at McDonalds is quick, fun and relatively cheap. But it is not very healthy. You can try

it once in a while but it is not very healthy in the long run.

The above are given as a support of the details which were followed by the researcher in

capturing the essence of the fats foods business.

Some of the popular food items

Figure 3.4 Sandwiches high in calories

Source : healthmeup.com photogallery

As a result people have now started talking of Healthy Fast Foods Some examples of healthy fast

foods could be:Vegetable burgers that are made from whole wheat and that too baked and not

fried. In these instances the bun is prepared using whole wheat and not the usual flour or maida.

Due to this ingredient the fibre content goes up substantially. In usual burgers the filler patty is

fried and that too deep fried to make it more tasty. But here instead of frying the patty the same

is baked and which ensures that the amount of fats is avoided.The ingredients for the patty is also

different vegetables such as beans, peas, beet root, to the maximum extent possible, and may be a

little amount of carrots and potatoes. To make the offering more appealing spinach, coriander

and mint leaves can be added. Some additional healthy fillings between the bun and the patty

such as tomatoes, cucumber, lettuce, grated carrot and such items can also be used. All these help

in not only making the burger more appealing, but also adds to the healthy aspect by taking care

of increasing the healthy fibre, nutrient, and vitamins, and simultaneously reducing the harmful

elements such as fat and trans fats. Also making sure that the fat and oil portion is kept to the

minimum, the use of butter and cheese can be minimised. All these go to make a very nutritious

and health boosting vegetable burger.

Figure 3.5. Whole wheat baked Non Veg Burger

Source: healthmeup.com photo gallery

At times people would like to have a non-vegetarian fast food and yet want to remain healthy.

In such instances, the server can use bread or bun made of whole wheat in place of the usual

flour or maida, and for the patty minced chicken along with vegetables can substitute for the

regular meat based ingredients. These will ensure that the serving is at the same time appealing

to the taste and palate, at the same time it will also be a very healthy chicken burger. A majority

of the population would not come out in public to say that they are fond of fast foods and yet that

is the fact. Under such circumstances one has to find easy ways to deliver fast foods that are

cheap and filling and also high on taste factor.

Figure 3.6 Sandwiches

Source: healthmeup.com photo gallery

In order to make a pizza that is tasty and at the same time healthy one may make some changes

in the pita bread foundation for the pizza. Normally this pizza base is made of flour and that too

super refined. This can easily be replaced by whole wheat. For the material to be put on the top

several vegetable alternatives such as spinach made into a puree, capsicum parts along with

sliced tomatoes, onions of course along with corn, carrots, beet root, olives, can be used.

Health being a foremost issue raking the minds of customers the researcher felt that giving a list

and description of some such food choices would enable both servers and consumers.

More such items can and are continuously researched and experimented upon Customers are

getting more and more discerning and choosy in their requirements. So a traditional approach

based merely convenience, taste, and price may not hold good for long.

Figure 3.7 Whole wheat veg pizzaas

Source: healthmeup.com photo gallery

Further if the pizza is not topped up with cheese and other such fattening agents then the

resultant pizza will not only be healthy but also full of natural nutrients. It will have vitamins,

anti oxidants, minerals and of course a lot of fibre. What more can one want?

Figure 3.8 Baked samosas

Source: healthme up.com photo gallery

Normally items like samosas are deep fried. But instead of that if one was to bake the samosas

the process would help in reducing the calories, and at the same time a very good as well as full

of health snacking item. For the outer cover within which the stuffing will be present, flour can

be easily replaced by whole wheat. Inside one can use a healthy mix of vegetables such as peas,

carrot, potato but which is boiled instead of fried. Thus while maintaining the taste and aroma the

food is kept light and hence the consumer can avoid the pitfalls of a high calorie and fatty snack.

It is important to have an eye for such adaptation because in the long run consumers health is

also a matter fo concern for the vendor. In today’s market when consumers are more aware about

health aspects this is very important.

Figure 3.9 Baked cutlets

Source: healthmeup.com photo gallery

If one was to bake cutlets in place of having them fried the result would be a healthier option.

Baking would reduce the calories content because this food would on the whole have lesser fat

content and at the same time maintain the quantum of fibres, vitamins and other nutrients as the

stuffing would have vegetables comprising carrots, peas, french beans, potatoes, beetroot, etc.

Minced or cery finely shredded chicken could be added for the non-vegetarians. French fries are

known all over the world. But instead of making them with salt and excessive fats, they can also

be made in a more healthy way just by baking the potato chips and avoiding addition of fat and

excess salt. As an alternative the same can be served with tomato ketchup.

Figure 3.10 Baked potato chips

Source: healthmeup.com photogallery

Figure 3.11 Grilled roasted chicken

Source: healthmeup.com photogallery

As a very likable non vegetarian snack fried chicken is a very common snack food item served

at all major fast food joints. In this case a healthier option would be to roast or grill the chicken

after trimming all the fat from it, and then preparing the snack.

Usually when people take packed lunches or tiffins they go in for sandwiches which are very

easy to make. It can be made filling tasty and healthy by following a few easy procedures such as

avoiding use of fats and butter, and including good nutritious vegetables such as leafy ones,

cucumber, tomatoes, onions and such items. A well made sandwich can even serve as a dinner

item.

Figure 3.12. Whole Wheat Veg. sandwiches

Source: healthmeup.com photogallery

The same sandwich can be made healthy and wholesome if it is prepared using whole wheat

bread slices instead of normal bread slices. Thereafter the fillings can be with vegetables such as

tomatoes, cucumber, capsicum, grated carrot, beetroot, lettuce etc. by applying only a dash of

butter one can cut down the calories. Those who are non vegetarian or egg eaters, sliced and

minced boiled eggs along with a dash of mayonnaise can serve the purpose of making it a

healthy egg sandwich.

Figure 3.13 Pav bhaji

Source: healthme.com photogallery

This Indian popular fast food uses a a bread bun which is called pav to be eaten with a vegetable

based curry which has some gravy. In this case also to make the snack healthy and nutritious one

can have the pav made of whole wheat instead of flour and for the curry combination use

vegetables that are leafy and nutritious and also have it prepared with as minimum quantity of

oils and fats. Boiling instead of frying the vegetable mix would ensure that fat contents are kept

at a minimum.

Usually with most of the fast foods an accompanying drink of choice is cola based. Now these

are not only practically of no nutritional value, they at the same time add to the calorie intake.

Instead of this an alternate drink can be fruit smoothies which can be made by blending some

fresh fruit with ice crushed into a base along with some syrup made from honey or dairy item.

The smoothie can be also laced with chocolates or peanut butter to add to the taste. Since they

have some fruits and other ingredients to add body, they are rich in fibre to some extent. Much

like a milk shake they also have more consistency and will be thicker than any plain cola drink.

To make it even more tasty and attractive to all age groups yogurt, ice creams can also be added.

They give more supplements like protein, vitamins, and nutrients. Fruits such as bananas,

papaya, guava, apples, chicku, custard apples, can add to the body, whereas citrus fruits,

pineapples as well as different berries such as rasp berry, gooseberry, straw berry can add to

flavour and taste as well as variety. They can with slight adaptation be served round the year,

cold and chilled in summer, plain in winter.

Figure 3.14 Fruit smoothies

*Images courtesy: © Thinkstock photos/ Getty Images (20)

Based on above studies the researcher found out that fast foods outlets must take into cognizance

not only taste factors but also matters pertaining to health, nutrition, packaging, logistics overall

costs, water, hygiene, as well as energy consumption. The outlets have to train their officials to

be observant and proactive in terms of making improvements in all related areas. Computer

applications, efficient use of information technology have to be stressed. One may also have to

keep an eye towards development of society as well.

Food matters in life. It is the source of sustenance, nutrition, and also of good health. As has bee

stated above changes in living conditions are greatly influencing modern lifestyles. Dearth of

time and space has increased the dependence on items that are fast and quick. Hectic lifestyles

are increasingly making people adopt ways of life that may be fast and quick in short term, but

over a period of time become counter productive. In this background the researcher listed above

a list of food items which can be a via media of both fast quick, tasty, and at the same time not

rich in items and ingredients which can affect the health adversely. As a matter of fact the

researcher would suggest that fast foods outlets progressively adopt such food items which

would on the one hand cater to customers’ taste and at the same time ensure that their health are

not unduly compromised.

While visiting outlets and gathering observations, the researcher found a basic trait in the

behavior. The more involved a buyer has to be in a buying process, the incidence and level of

post purchase anxiety is lower as in comparison to purchases which were more dictated by

impulse, when the thinking about the purchase continued. Now fast foods were in the category of

high impulse purchases and hence buyers’ level of post purchase dissonance was bound to be

high. The outlets had to be careful that in all their messages and staff interactions with customers

a level of reassurance about the quality of food was maintained.

Because cognitive dissonance could be a high possibility in case of fast foods business, the

researcher felt (based on earlier relevant article reviews) improving the emotional intelligence

quotient of the sales personnel at the outlets might help in improvement of customer satisfaction.

This might involve the fast foods joints probing methods and means to improve the emotional

intelligence parameters of the staff who serve the customers. Demonstrating to counter staff how

improved emotional intelligence levels can increase customer satisfaction levels would make

such efforts more acceptable. During visits to these fast foods outlets the researcher found

that on many occasions the outlets offered discounts either by way off limited period price off, or

at times on a continuous basis where the customers could collect such points somewhat like a

loyalty program. Generally customers were attracted towards offers which were arranged around

specific products or services rather than general offers. This showed that whenever the discount

could be related to something which was more proximate and immediate the redemption was

larger and would translate into increased turnover. This also had an impact on customer

retention. In respect of fats foods outlets, a point which was worth noting was that most of their

ingredients were of fresh foods category. Transporting and warehousing of such items was very

important and critical. Maintaining their freshness was imperative to customer satisfaction on the

overall. Logistics and supply chain management thus would play a very crucial role in the entire

process. So the number of stakeholders in this process was quite large. Apart from infrastructure

issues the problem also had to be addressed in respect of price fluctuations and the consequent

pressure on costs. Number of intermediaries in the supply chain would also impact prices and

efficiencies. One observation that the researcher would wish to make was that while the fast

foods front end was more organized the back end was more disorganized and hence suffered

from uncertainties. Forecasting of requirements was also an issue. At outlets the researcher while

talking with lay customers found many a times the buyers had their psychological motivations

influenced by physical experience of the product and service. This physical experience also

included community based experiences. There was a very large interconnect amongst all these

experiences and they influenced the perceptions of satisfaction greatly.

As stated earlier the researcher while observing operations at the fast foods outlets also found

that in this type of business a differentiating factor was the level to which the outlet was able to

hone it’s supply chain efficiency. The market place battle place was shifting to the realms of

supply chain management and logistics. The capability to cooperate and integrate the back end

and the front end was becoming a vital deciding factor. Since the products and ingredients were

of an extremely short life span, the more integrated the processes are the cost efficiency would

increase through a process of continuous supply chain collaboration.

While studying all the above fast foods outlets the researcher could find quite a few common

strategies adopted by them. The façade had to give an inviting look. Brightly done up they had to

display an inviting look. Most of them used foods as items on their signage. The attempt was to

create a first impression impact of taste. The items chosen were also of products that they were

associated with. Dominoes would always show a pizza on the board whereas McDonalds would

have a burger. Only Parathas similarly put parathas as their main item. This ensured that the

target audience could immediately associate the outlet with the main product on offer.

Location was another point that the outlets had to be very careful about. Fast churn outs on the

basis of both sit and eat as well as take aways had necessarily to concentrate on locations which

ahd a lot of transient traffic. So Mc Donalds, had necessarily to choose railway stations,

expressways and similar sites. Subways and Dominoes could afford locations that were not

necessarily on high traffic concentrations because their customers were largely ordering home

delivery. But for these the home delivery mechanism had to be more honed. Promising delivery

within a stipulated time period required delivery infrastructure, in the form of delivery boys with

their transport vehicles. This also required parking facility and this in turn decided upon the

location. Food courts in Malls was another choice as presence in such places was essential for

customer brand recall and extra impulse consumption. Some of the fast foods players such as

Candies, Papa Jones, and their likes were not so particular about locations, and their choice was

more influenced by where they had initially set up shops and could conveniently expand

operations.

While the major chains built their strategies dictated by the franchisors and their systems of

doing business, many of the individual fast foods operators went by expediencies and suitability

of adoption. Local environment influenced strategy adoptions, as well as formats to be

maintained. Local tastes

Earlier in the chapter the researcher has depicted the supply chain flow diagrams of a few of the

large fast foods outlets and chains. In all the instances one common thread was that a lot of

system based integration was evident. Mass and bulk movements were evident and the same was

justified because of volume transactions. Some type of tracking system was also evident. Fast

foods by itself promises a quick delivery of order, which in its turn demands an extremely

efficient and smooth backup system. If bulk movements are not handled smoothly then the front

end on its turn will not be able to deliver.

In the case of McDonalds the researcher found, a lot of collaboration with the suppliers. There

was a lot of sharing of plans. This ensured that the suppliers were aware of the requirements of

the company well in advance and could on their turn plan their inventory requirements.

Replenishments based supplier management happens to be main method adopted by many

American companies, Walmart included. This method works very well if there happens to be a

large degree of trust between the buyer and the seller. Sharing of future plans do have the risk of

alerting competition and hence many companies are wary to do so. So a way out could be

exclusivity by having dedicated suppliers. The buyer having ownership controls on the vendors

could be other ways to ensure confidentiality. McDonalds also had a lot of control over the

inventory management at restaurants. While overall the procurement was centralized the

restaurants were also involved in deciding on quantum of overall procurements. They were asked

for inputs when it came to forecasting for periods ahead. Business intelligence also played a

critical role in the entire process. Significant importance was given to process integration which

was handled at a centralized level. It was also seen that in the case of McDonalds the number of

items which had to be controlled and monitored were quite large in number. It was because each

of their food item has several ingredients and they are procured from separate sources. They are

also bought from places which involve travel over long distances. Some had to use refrigerated

facilities, which added more complexity to the running of operations.

In the case of Domino’s Pizza the concentration was more on procurement of wheat and dough.

Pizzas are very much dependent on the quality of wheat which makes the dough, because the

chain had to ensure consistency in the texture of the flat bread which would form the base of a

pizza. Wheat also being a commodity, and having seasonal harvesting, the organization had to

rely on efficient procurement for keeping costs under control. Refrigerated vehicles were

important in the transportation of the intermediary dough. The number of outlets and varying

demand patterns had to be factored in while making future plans. In their supply chain a lot of

mechanization was visible. Large quantities of bulk movements made the adoption of

mechanization practical and worthwhile.

Because the outlet operated mostly on home delivery, they had to keep a big fleet of two

wheelers for the purpose. This necessitated availability of parking places around outlets. Speed

of delivery often would conflict with driving safety and the restaurants had to keep an eye

towards inculcating safe driving habits amongst the delivery staff.

In both the above cases the accompanying soft drinks were also to factored in. The stocks of

beverages had also to be factored.

For Pizza Hut, the beverage was Pepsi. For the dough and other main ingredients such as fillings

toppings and cheese melts, the supply source was inhouse, and thus the entire process could be

managed with a little bit of ease. However as to other ingredients such as meat vegetables and

sauces the materials had to be procured from different individual suppliers. Weekly sourcing of

such materials were resorted to and replenishments would be from central warehouse. Thus

while planning for materials were centralized there was also a great amount of local involvement

in the process.

The supply chain management of the other players were individually drawn up catering to their

individual requirements. Depending on scale they adapted to individual needs. At times the

strategy was influenced by expediency and given conditions. Candies for instance leveraged on a

centralized kitchen where controls could be kept with ease. Tibb’s Frankie built on local

strength. But whatever little variations were there in these outlets in terms of scale and

intermediaries, one element was common and that was ensuring regularity and consistency of

quality in all supplies. This was the main precept on fast foods outlets delivering customer

satisfaction.