Papa Johns
Professor Brockett
Risk Management
13 October 2013
Papa John’s
In 2007 Eric Hartman, Papa John’s senior director of logistics, decided that it was time to give the company’s supply chain a complete makeover in order to keep up with the company’s rapid growth (Trunick). Different areas of the supply chain were hindering efficiency and costing money, a recipe for disaster (Trunick). Specifically, the planning, inventory, and shipment areas were in the most need of transformation.
The planning aspect at the store level, or quality control center, required managers to call in the supply orders the stores needed. This ordering system was sometimes ineffective because stores would often order too much, or not order enough due to miscommunication. Thus, many items were ‘written off’ or placed in off-site storage, both of which were unnecessary costs to the company. To combat the issue, Papa John’s teamed up with PJ Food Service, ‘Papa John’s parent company”, to provide stores with an electronic ordering system (Hochfelder).
The backbone of Papa John’s, the ingredients that make up an individual pizza, were particularly tricky to deliver because almost all the supplies have a shelf life of one week (Burnson). Here, inventory ran the risk of being thrown out simply because the ingredients surpassed the expiration date, another unnecessary cost. In addition to the monetary loss, Papa John’s ran the risk of unsightly brand exposure: Papa John’s philosophy, “Better ingredients. Better Pizza. Papa Johns” insures quality ingredients, a promise that could not be jeopardized. With the company reputation at risk, Papa John’s recruited Manhattan Associates, a company specifically designed to help other companies manage their supply chain. The solution proposed by Manhattan Resulted “introduc[ed] new vendors and origin locations” to Papa John’s (Trunick). This resulted in fewer miles driven, faster delivery to stores, and better quality control of inventory.
Risk Management
13 October 2013
Papa John’s
In 2007 Eric Hartman, Papa John’s senior director of logistics, decided that it was time to give the company’s supply chain a complete makeover in order to keep up with the company’s rapid growth (Trunick). Different areas of the supply chain were hindering efficiency and costing money, a recipe for disaster (Trunick). Specifically, the planning, inventory, and shipment areas were in the most need of transformation.
The planning aspect at the store level, or quality control center, required managers to call in the supply orders the stores needed. This ordering system was sometimes ineffective because stores would often order too much, or not order enough due to miscommunication. Thus, many items were ‘written off’ or placed in off-site storage, both of which were unnecessary costs to the company. To combat the issue, Papa John’s teamed up with PJ Food Service, ‘Papa John’s parent company”, to provide stores with an electronic ordering system (Hochfelder).
The backbone of Papa John’s, the ingredients that make up an individual pizza, were particularly tricky to deliver because almost all the supplies have a shelf life of one week (Burnson). Here, inventory ran the risk of being thrown out simply because the ingredients surpassed the expiration date, another unnecessary cost. In addition to the monetary loss, Papa John’s ran the risk of unsightly brand exposure: Papa John’s philosophy, “Better ingredients. Better Pizza. Papa Johns” insures quality ingredients, a promise that could not be jeopardized. With the company reputation at risk, Papa John’s recruited Manhattan Associates, a company specifically designed to help other companies manage their supply chain. The solution proposed by Manhattan Resulted “introduc[ed] new vendors and origin locations” to Papa John’s (Trunick). This resulted in fewer miles driven, faster delivery to stores, and better quality control of inventory.