Operations at Dominos

Role of Operations

Differentiation

  • A variety of pizza, side dishes and chicken snacks
  • A variety of meal combinations
  • Incorporation of new technology
  • Quality and speed of service
  • Customised pizza designs

Cost Leadership

  • Targeted business efficiency programs
  • Digital technology
  • Standardisation such as pizza base size
  • Economies of scale
  • Minimising waste.

Strategic Role


Domino’s philosophy is called ‘Slow Where it Matters, Fast Where it Counts’. This is a key aspect of the Domino’s vision to retain its competitive advantage and keep its reputation as the home delivery choice for all market segments.

Influences

Globalisation

  • For Domino’s, globalisation has created opportunities to access other markets to sell the outputs of its operations. - - - Pizza has universal popularity and the Domino’s system is applicable in overseas convenience food markets.
  • The company holds franchise rights for New Zealand, Belgium, France, the Netherlands, Japan and Germany.

Economic

  • Rising cost of labour, electricity, and general economic conditions in Australia and globally affect Dominos
  • A downswing in economic activity and consumer confidence can increase demand for take- away pizza as consumers reduce their spending on restaurant meals and going out.

Technology

  • Introduced online ordering via a website in 2005.
  • An iPhone app was launched in 2009 to make the ordering process even easier.
  • Improved the speed and efficiency of this aspect of its operations.
  • All information technology and management of inventory is controlled using PULSE software. Improves efficiency, accuracy and productivity.
  • Domino’s Robotic Unit (DRU) is part of the business’s future innovations to reduce cooking times to three minutes in-store and delivery times to 10 minutes.

Quality Expectations

  • Responded to customer expectations of faster and hassle-free ordering through its apps
  • Customers can pay an additional fee if they want delivery under 20 minutes
  • Individual pizzas can also be customised to suit individual preferences and tastes.
  • Domino’s operations are focused on consistency. Dough and sauce are the same in every store and each pizza has the right toppings placed correctly.

Cost Based Competition

Competition from Pizza Hut, Eagle Boys (until 2016), Pizza Capers and independent single operators. These competitors are all able to offer similar products at a similar price point.

Competition from frozen pizza brands such as McCain, Papa Giuseppi’s and Dr. Oetker, which are widely sold in supermarkets. Woolworths Select brand and Homebrand pizza brands have prices as low as 60c per 100 grams. Domino’s cannot offer prices this low as individual stores don't have the economies of scale of these brands

CSR

The company promotes recycling and aims to minimise waste, carbon emissions and energy use.

Many stores have electric bikes as part of their delivery fleet in an effort to provide sustainable, environmentally friendly delivery options. Electric cars may play a role in the future as they become more commonplace in Australia. In the United Kingdom, Domino’s is working with Renault to use electric cars to help the company’s goal of reducing carbon emissions.

To reduce food waste, Domino’s uses PULSE software to manage inventory to avoid ordering excess food ingredients. Recycling of cartons and pizza boxes is encouraged in-store.

In response to social pressure for a healthier product, sodium and fat have been reduced in Domino’s foods. In 2015 Domino’s announced the removal of all artificial colours, flavours and preservatives from its pizza menu.

Many local councils accept Domino's pizza boxes in their recycling bins, so they are very easy to recycle.

Processes

Inputs

Transformed
Materials
The dough is made from scratch daily in-store using a prepacked dough mix while the sauce is also premade and delivered to each store to ensure freshness. Choice of 40 different pizza toppings
Information
Pizza-make charts are posted in the preparation area. Ensures consistency, as each pizza is topped correctly.
Other information inputs are calorie content and preparation times for each menu item.
Information about how many orders a store is processing, order size, delivery distances and traffic density is used in an algorithm to calculate the likelihood of a driver completing a home delivery within a 15- or 20-minute time frame
Customers:
Customers are an input because they are changed from a hungry state to one that is satisfied. Customer surveys, responses to its complaints and compliments form on its website, online cooking blogs and social media comments can provide Domino’s with information to analyse for improving its operations and to determine if there is a demand for new products.
For example, the Chef’s Best range pizza was introduced as a consequence of customer feedback.



Transforming
Human Resources
individual stores average around 30 staff, with 60000 employees worldwide. Employees are well trained and multi- skilled and therefore able to perform any task within the operations.
Facilities
Include; dough-sheeting machine, conveyor oven, pizza-holding cabinets, refrigeration equipment.
Arranged in a process layout to ensure a smooth flow of inputs through each work station
Uses PULSE data management system to analyse all aspects of inventory and the operations process

Transformation Process

  • High volume
  • High variety (100000 ingredient combos)
  • Moderate variation in demand
  • Moderate visibility

  • Preparation of a pizza must follow a clear order of steps.
  • Task analysis is used to determine the precise sequence in which individual ingredients are added to minimise preparation time.
  • Critical path analysis can enable Domino’s to achieve the fastest pizza preparation times.
  • This process increases the potential number of orders per hour and reduces time between the customer order and delivery.

Outputs

Customer Service

  • Speedy delivery ('Fast where it counts')
  • Customisation of meal deals
  • Faster service and customer service allows for competitive advantage

Warranties
Domino’s stands by its quality claims that customers are guaranteed to get a fresh, hot pizza, and if not satisfied the store will replace it.
Food safety is governed by the Food Standards Australia New Zealand Act 1991.

Strategies

Performance Objectives

Quality is assessed through factors such as friendly and helpful interactions with staff, tasty food, clean stores, courteous delivery drivers, a website that is easy to navigate and online ordering that operates without malfunctions. Quality is also measured by consistency of outputs.
Speed of customer ordering, operations process and delivery. Introduction of new fast bake conveyor ovens cooking times have been reduced from 7.15 minutes to approximately 4 minutes.
Dependability of on time deliveries through GPS Driver Tracker
Customisation of products through 1000000 possible ingredient combinations
Cost in order to achieve cost leadership within the cost-competitive pizza market
Flexibility is relative as demand is constantly shifting, however there is a maximum output than can be achieved due to the time taken to cook each pizza

New Product Design or Development
Product
New varieties of pizza, dough types and meal combinations e.g. gluten free, stuffed crust
Service
SMS ordering, using emojis, Zero Click ordering
and GPS Driver Tracking, autonomous delivery using the DRU robot and drones is under development.

Supply Chain Management
Deli meats for toppings are sourced from Tibaldi in Melbourne and Primo Smallgoods in Sydney. Other ingredients are sourced from Comgroup Supplies, a food manufacturer in Brisbane. Mozzarella cheese, cheese blends and pizza cheese are sourced from Leprino Foods, based in the United States.

Outsourcing
To ensure that it has control of every aspect of its operations and to maintain corporate secrets, Domino’s does not outsource any of its operations.

Technology
Uses technology at all stages of the ordering, delivery, pick-up and purchasing process. e.g. WOW2 fast bake oven, DRU and drone tech. E-commerce for customer orders. The company prides itself on being the market leader in adopting digital innovations.

Inventory Management
Some inventory items are delivered daily, such as dough and sauce pre-mix, and therefore the inventory management may be classified as just-in-time. Buffer stock of frozen ingredients is kept on hand. At the conclusion of each shift, leftover stock is checked, weighed and stored.

Quality Management
Quality assurance is achieved through following specific checklists for cleaning the whole store, the preparation area and preparing ingredients.
Quality Control by ensuring the store is ready for busy periods. The make line is organised, pizza-make charts are visible and bases are prepared.
Quality Improvement
Feedback from customers and its website are used to assess this aspect of quality. Data for delivery times is kept and analysed each evening and each week to calculate average delivery times, and these are compared over time.