Service Encounters And Customer Satisfaction – A Case Study Of Domino’s Pizza

Supply chain management

Discuss about the Service Encounters and Customer Satisfaction.

In Australia Domino’s Pizza Enterprise Limited is the largest pizza chain and it is also the largest pizza franchisee chain in the world. The network, shops and the sales of Domino’s pizza are huge in Australia. In the Netherlands, Japan, Germany, Australia, Franca, New Zealand and Belgium, there are present approximately 2000 stores of Domino’s Pizza and headquarter is situated in Queensland, Australia. In Australia Domino’s Pizza was announced the publicly listed Pizza company in the year 2005. In 1983 in Queensland the first Domino’s Pizza store in Australia was opened and they were offering home delivery service to the customers. In the USA, DomiNick’s pizza store was purchased by Tom Monaghan and James Monaghan in the year 1960 and from the name DomiNick’s the name Domino’s was born and the business was running successfully (Gray, 2013). Now there are working 26000 employees in the company. The company is providing traditional pizzas, chicken pizza, pizza mogul, cheese pizza, pizza chef and prawn pizza, with these they are also providing various types of cold drinks and chips. Apart from these Fudge Brownies, Mini Dutch Pancakes, Baked Churros etc. are also available in the stores. These are provided to the customers as desserts. The customers can order pizza through the internet service and get home delivery.

Supply chain management (SCM) is a process through which any information or materials are transferred from the manufacture to the whole seller, wholesaler to the retailer and from the retailer to the customers (Christopher, 2016).

In Australia the customers of Domino’s Pizza are always asking a one question ‘where is my pizza?’ so the company has arranged an online tracking system through which the customers can know exactly when the delivery will arrive. This tracking system is a part of supply chain, which helps to keep distinct communication with the customers. As a result the transparency among the customers and the company is being increased. Through Domino’s Pizza application the customers can give direct feedback to the company which is very much helpful for the company to improve the services (Zhao & Balagué, 2015). The manufacturer, wholesales and the retailers can do their business more distinctly and the communication becomes very fast due to the use of technology and the chain become stronger. But the company is adding new technologies on the existing ones without using the new sophisticated technologies (Hartley, 2015).

Issues in supply chain management

In the year 2002 the inventory controlling process of Domino’s was centralized and the operations were directly connected to headquarter. All the distribution channels were controlling through the software (Rao & Oumlil, 2015).  The planning and sourcing of the supply chain were being controlled by the technologies. But due to the inventory centralization there were creating several problems to operate the inventories properly and it was affecting the communications with the customers. The Enterprise Resource Planning (ERP) has been involved to control the inventories and now there are adding several new features to the system such as replenishment and forecasting software programmes.

Forecasting: On the basis of performance in the previous years the company can predict the growth in the future years through forecasting. It is a tool to predict the performance of the company in future (Heizer & Barry, 2013). But this prediction can’t be right always (Nagy et al., 2013). Though Domino’s is having 1200 stores but shit it is possessing only 2.7% area of the fast food market in Australia and New Zealand. So Domino’s needs a real time system which is helpful to increase the inventory and the out of stock ingredients should be removed so the relation with the customers will more distinct. Apart from these the efficiency of purchase should be increased. Sometimes due to the bad weather the business has been affected. In the rainy weather the number of customers in the stores are decreased and sometimes the delivery boy can’t able to reach for delivery within the given time. At that time there are creating some problems of the stocks. So the real time service should be strong enough to maintain these types of situations and the stocks should be maintained properly. Sometimes after purchase the customers are being given coupon but when the customer is willing to use it in his next purchase it’s not working. These types of errors should be fixed through an advance real time system.

Replenishment: The replenishment software programme is using to maintain the inventory in a well-organised manner (Boctor & Bolduc, 2016). Which products are being bought by the customers and how much products are required in that area, these all are properly maintained through this replenishment software (Costantino et al., 2015). Domino’s is using this software to full fill the need of the customers. But sometimes there are creating several problems with the stocks and the customers are not getting the products which they need. The inventory replenishment software programme should be strong enough to make the adjustment of the stocks on the basis of running performance. A proper balance can be maintained between the customer’s orders and the stocks by using this software programme and the investment on inventory can also be minimised by a proper and centralised inventory replenishment software programme.

Delivery the right amount within time: Domino’s always tries to attempt delivery within the given time. When a customer gives order for pizza then it is very important to deliver the right amount. Due to the presence of an organised real time system Domino’s able to do deliver the right amount with the given time (Bamburry, 2015). Previously Domino’s was using the monthly forecasting system but now the weekly forecasting system has been installed. As a result sufficient stocks are available in all the stores. So the customers are getting the products according to their choices.

For better performance Domino’s has launched a programmed, which is named ‘matched receipts to demand module’. Previously the big trucks had come with lots of same raw materials but now Domino’s is demanding the trucks with varieties of raw materials in lesser amount. So the varieties of stocks are always available in the stores. Depending upon the present performance the company is trying to predict the future demand and according to this the company is trying to change their strategies. Apart from these the promotional forecasting is also an important part of the business. Depending upon the previous performance the future promotional plan is being developed. The demand planning module is developed by collecting the internal and historical information of the company. So the forecasting system of the company should be well developed.

After studying the supply chain management of Domino’s pizza it has seen that there are present some issues in the supply chain management.

Inventory management: There should be present enough stock so the customers are satisfied according to their demand. The customers should get their delivery within appropriate time. But due to the problem in real time system sometimes it has seen that the inventory is not being managed properly. The customers are not getting delivery according to their will. A huge gatherings can be noticed in the stores and some customers have to leave the stores without getting their orders. Sometimes the customers are not getting home delivery within the given time.

Managing the suppliers: The supply chain mangers should have proper knowledge about the suppliers. The number of suppliers should be determined properly by the managers. If the relation with the suppliers are not being well maintained then the productivity of the company is being hampered. It will affect the stock and there will not enough products to satisfy the customers.

Maintain the quality and safety: Now a days the people become more health conscious and they aware about the side effects of the junk foods (Webster et al., 2014). So Domino’s should maintain the quality of the products and also should take care of the safety of the customers. So the company needs to care about the raw materials which are being delivers by the suppliers. If the raw materials are of good quality then the productivity will also good. Through digital media the government is also trying to increase the awareness among the people about health and safety. Though the pizza is a junk food but the company is trying to do promotion of the low calorie pizzas to attract all kinds of customers.

Risk management: Risk management is one of the most important factor for the growth of any business (Lam, 2014). A strong supply chain management is capable to predict the natural calamities such as earthquake, rainy reason etc. and according to that prediction the inventory management should be well defined. But sometimes it has seen that the real time system can’t predict the natural calamities and the company has to face several problems like enough stock is not available in the stores and the company is not able to do home delivery. These incidents can affect the business very badly. The suppliers can be bankrupted and the supply chain can be broken down.

To improve the supply chain management domino’s has installed a new tracking system, so the customers can track the exact location of their pizzas (Taylor, 2015). The tracker is working through five steps- placing the order, preparation of food, payment, packing the product and the route of delivery. The tracker also shows the name of the delivery boy. Through this tracker Domino’s is showing their supply chain very distinctly to the customers. The other companies are not willing to show their supply chain and inventory management to the customers. So the customers of Domino’s are being satisfied with this transparency. In the year 2016 Domino’s has got profit of $92 million and it has increased approximately 43.6% than the previous years. Domino’s has announced to increase their stores in Australia and New Zealand within next 10 years. On the basis of this real time supply chain management system Domino’s is planning to develop their business.

Conclusion

Supply chain management is a complex work for any business house (Stadtler, 2015).  Domino’s is possessing a strong supply management system and it is related to the real time system. But there are existing some issues within it, that’s why the inventory is not so much spread and the business operation of Domino’s is affected. The company needs a strong and well organised real time system to manage and spread the inventory spontaneously. The entire operations of Domino’s such as promotional strategies, safety and quality of the products and the risk management are related with the real time system. So the real time system of the company should be well developed. The company always provides fresh and good quality of foods. The company has always kept distinct communication with the customers, the new tracking system is very much helpful to keep transparency. This is helpful to increase the customer satisfaction. Domino’s is offering various kinds of pizzas to the customers, so the customers are being attracted easily.

References

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