Are Supply Chain Management Techniques Driving QSR Profits?

The growth of the food services market has led to a centralised procurement system by national well as international brands, backed by a strong supply chain network. Here’s how the techniques are applied in a QSR in your city.

 Mc Donald’s: Mc Donald’s has a strong and multi-layered supply chain, which is divided into Tier-I and Tier-II suppliers.

• Tier-I consists of core suppliers providing processed foods, e.g. Vista Foods (Vegetable & Chicken patties) and McCain (suppliers of potato fries, wedges, etc.).
• Tier-II suppliers are growers and processors who provide lettuce, poultry items, etc.
• Further, its 311 QSRs are supplied by four distribution centres across the country using temperature controlled vehicles. The entire logistics operation is outsourced and managed by its partner, viz. Radhakrishna Foodland Pvt. Ltd, which is responsible for the timely delivery and quality of the product.

Pizza Hut: Pizza Hut runs its operation through 150 corporate and franchise stores across 36 cities in India. The supply chain is multi-layered and wholly outsourced.

• It has a direct tie-up with suppliers like Pepsi for beverages and Cremica Group (a food processing company) for buns and Cremica Bakes.
• Indirect tie-ups include the import of food materials like chicken (from Brazil) and potatoes (from Australia).
• The cold chain logistics are managed by Snowman Frozen Foods Ltd through 16 warehouses and over 100 trucks across India. While these tie-ups help Pizza Hut manage its logistics smoothly and effectively, Snowman has capitalised on the optimum utilisation of its facilities.

Domino’s Pizza: It has been ranked as the top pizza manufacturer in India because of its product quality, freshness, taste and efficient supply chain network. This efficient outsourcing model helps Domino’s ensure quality and keep the food costs down.

• Domino’s Pizza follows an operational model similar to Pizza Hut and has outsourced most of its operations – from procurement to logistics and distribution – to its local India partners.
• It has a vertically integrated supply system with automatic delivery of raw materials. The centralised procurement system, which procures raw materials from Punjab and distributes to its four commissaries, helps Domino’s maintain increased focus on customers.
• This entire distribution is managed through refrigerated trucks.