supply chain

Company Overview: Pizza Hut, Inc. operates a chain of pizza restaurants in the United States and internationally. It offers pizzas, pastas, wings, and drinks, as well as sides and desserts, such as stuffed pizza rollers, breadsticks, cheese sticks, baked desserts, and cinnamon sticks. The company also offers catering services. In addition, Pizza Hut franchises its restaurants. Further, it provides online ordering. The company was founded in 1958 and is based in Plano, Texas. Pizza Hut, Inc. operates as a subsidiary of Yum! Brands, Inc.

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:

-Pepsi Company
-Regional dough production companies (Pizza base)

Secondary materials (meat, vegetables, sauces) come from a warehouse that purchases on a “Commissary” basis. The purchase is via indirect local suppliers:
-Local Meat markets
-Vegetable markets
-Sauce companies

Materials come every Wednesday from the warehouses via refrigerated trucks or, if at the end of the day the pizza hut manager gives their forecast on the next day's demands and believes more are required, an order is sent to the warehouses who will deliver it the following day.

Supply Chain of Pizza hut

FACILITIES

Facilities are the actual physical locations in the supply chain network where product is stored, assembled or fabricated. The two major types of facilities are Production sites and Storage sites.

INVENTORY

The base is prepared in the commissionaires and then transported to different retail outlets. The outlets keep the inventory stock of only three days because it is a perishable good. Hence, the inventory stock cost is reduced. As only the base is transferred to the store, in case of any particular item demand is increased, it does not create any problem.

TRANSPORTATION

Pizza hut use the refrigerated trucks in which the base is kept and there is controlled temperature. There are 110 trucks to supply the bases across Philippines, There is also a vacant space in which extra base is kept to fill the demand of a particular store.
The company will not incur any additional transportation costs as the counters are along the highway or on the truck’s route.

INFORMATION

There was no proper medium of coordination between the suppliers and the outlet managers. This all happened because of customer database was not maintained and outlet manager could not recall the need of customer. The cost got increased and they were not able to come across this problem in the absence of proper information system.
Therefore, commissionaires were created.

SOURCING

The Pepperoni and Mozzarella a cheese is imported from Australia and Spain respectively which they also get from local supermarkets. To compensate an increased cost, they maintain a local supply chain to reduce the cost like vegetables, wheat, tomatoes.
This provides the world class facility and taste by importing its main ingredients from Spain and Australia but other ingredients from local vendors.

Supply Chain of pizza hut