Pizza Hut Business Operations

Company overview

The largest national pizza chain, Pizza Hut has over 34,000 locations and has annual sales around $10 billion. Pizza Hut is a YUM! food brand, which means it has a comprehensive sustainability report that the public can access. Pizza Hut is also in the process of exploring green building design and has already incorporated some efficient fixtures in its stores. Pizza Hut offers boxes made with some recycled content. Pizza Hut also offers some natural ingredients in some of its items. Finally, Pizza Hut is beginning to track the impact of its supply chain

I. Brief Elaboration of a complete supply chain network for Pizza

Supply chain of pizza hut starts from the suppliers of pizza hut. There are direct suppliers and indirect suppliers of Pizza hut.

Direct suppliers of Pizza hut are three named as:

* Pepsi Company

* Bake parlour company (Buns) *

Habib oil Mills (First mineral water)

And all other material like Cutlery, meat, vegetables, sauces, and all other material come from their warehouse named as "Commissary". That material is purchased by Commissary means indirect suppliers of Pizza hut are:

* Meat market (Their owns cattle)

* Vegetable market

* Sauce companies

All direct material is demanded on daily basis and the mode of transportation, which they used, is trucks mostly they are Shezore. On every day end pizza hut manager forecasts the demand of next day and gives the order to the suppliers than next day morning the goods come to the Pizza hut. All indirect material i.e. vegetables, sauces, meat, cutlery and al material is purchased by the warehouse named by "Commissary". The material comes from warehouse by the trucks on every Wednesday.

Then Pizza hut takes the orders from its customers who come to pizza hut and also take the orders from the delivery service there is a specialized system in pizza hut which is connected to the delivery orders service so that 1 order list at a time come in the kitchen and at the manager's table also. Than production of pizza according to order starts and they deliver it with in 45 minutes at the door of customer and in pizza hut they just take 20 minutes to prepare the pizza and serve it to the customer. They claim that: "If we are unable to serve our customer within 15 minutes than there is no need to pay money to us."

Adjusting SC Member Capabilities

-Manager audit the Supply chain members capabilities & their partners, to determine consistency with needs of end customers & SC.

-Pizza hut continually reassess performance with respect to requirements.

-The best SC performers are more responsive to customer needs, quicker to anticipate changes in the markets, & control costs much better

Warehouse:

The fast food chain recounts its transition from early data mining efforts to a project where it recovered the costs of software licensing and started generating revenue. Its ware house is situated in Bahadurabad . From where they have got all the material except direct one. Its warehouse is named as "Commissary".

All management programs are built on a data warehouse of millions of customer records gleaned from point of sale transactions at its restaurants. They know your favourite topping, what you ordered last and whether you like salad with your meat lover's pie. Much of that has to do with data mining, a technology that converts details from customer data into competitive intelligence that companies use to predict trends and behaviours.

Pizza Hut uses a product called Teradata Warehouse Miner and after a year using it to better manage direct mail campaigns, the chain and its parent company, Yum Brands (Pizza Hut is one of eight restaurants in the group that includes Kentucky Fried Chicken and Taco Bell) are starting to see results.

The chain, which is affiliated with Pepsi Corp., first got into the CRM game by using the more than 10 years of order history in its database, consisting of all purchases delivered to households that ordered by telephone.

Pizza Hut claims to have the largest fast food customer data warehouse in the world with 40 million US households or between 40 and 50 per cent of the US market. The existence of duplicate households in the warehouse (same family, different phone number) made it difficult to do direct mail campaigns because of higher postage costs. It was also a challenge to target the right homes for a particular campaign and to accurately apply results from a particular mail campaign.

In the first year of using the Teradata Warehouse Miner product, manager said Pizza Hut was able to recover the cost of licensing, integrating and training staff to use the product and it made money for the company in the first quarter of use.

Manager would not give the dollar value of revenue from using the data-mining product, saying the information is now considered critical to the company's competitive advantage.

""We made so much money this year on this we're afraid our competition will start using it,"" said manager.

Using Warehouse Miner meant an improvement in ""household uniqueness"" from 80 per cent to 95 per cent. While direct mail has traditionally been a breakeven cost centre, Pizza Hut has managed to turn it into a profit centre with increased ROI, manager said, in excess of 200 per cent. Again, precise ROI was not available as it is ""confidential.""

""We use it to do target marketing and find the best coupon offer for that household. We can profile and segment customer households for groupings according to patterns of past pizza buying behaviors, offer preferences and price points,"" he said. ""We can also use it to predict the success of a campaign.""

Pizza Hut now tracks not only phone orders, but online orders and can track in real time what commercials people are watching and responding to.

By using Teradata