Sample Business Paper on Logistics Performance Priorities for Dominos

Executive Summary

Logistics performance priorities refer to the goals that an organization needs to achieve
for the supply chain to run efficiently. Some examples of these goals include increased sales,
efficiency, better customer service, and improved relationships (Gamraoyi, 2016). In a fast-food
chain such as Domino's, the logistics performance priorities could include improved customer
service, improved inventory management, and increased efficiency in the purchasing process.
One of the notable logistics and supply chain management concepts applied to achieve these
objectives is demand and supply forecasting. Additionally, one of the notable logistics and
supply chain management tools used to achieve these goals is supply chain management or
demand planning software and an enterprise resource planning system.

The supply chain management or demand planning software serves to help the company
achieve the logistics performance priorities in various ways. Schell (2000) contends that a
demand planning system allows the company to increase inventory turnover and prevent
perishable items from going stale, thus reducing costs and improving efficiency. Secondly, the
system helps to ensure ingredients never run out of stock at the company's pizza outlets, thus
improving customer service. In addition, the systems help to improve efficiency in the company's
purchasing process, thus increasing the company's overall efficiency. Lastly, the systems help the
company in adjusting stock when factoring in variables like promotions, lousy weather, and peak
seasons, thus improving customer service. In summary, supply chain management software can
help the company achieve real-time forecasting whereby the company can perform weekly
forecasts rather than monthly forecasts while helping to increase inventory turns and gaining
better control of safety stock levels. Demand planning systems further help to standardize

purchasing procedures and ensure the right product is delivered, in the right quantities, in the
proper condition, and at the right time.

Background Information

The company selected for this analysis is Dominos's Pizza, Inc. According to Attride
(2018), the company was established in 1960 and started out small with one store in Ypsilanti,
Michigan. It is currently the world's largest pizza delivery company, operating over 17,100
outlets in over 90 countries. The company was established on basic concepts and only offers
delivery or takeaway and a minimal menu. For over 30 years, Domino's offered only two pizza
sizes and eleven topping options. Till 1990, the company only offered one drink, cola. However,
in the recent past, Domino's has introduced breadsticks, salads, as well as other food items
besides Pizza to its menu in a bid to stave off competitors like Little Ceasar's and Pizza Hut
while holding tight to its focus on offering quality pizza and excellent service.

There are several internal and external interesting facts about Domino's Pizza that is
worth noting. For instance, Attride (2018) noted that since 2008 most of the food items on the
company's menu are new. Interestingly, over 34 million distinct methods prepare a single pizza
at Domino. The most common pizza topping in the U.S. is pepperoni, followed by sausage,
bacon, mushrooms, and pineapple. The first non-pizza menu item to be introduced were
breadsticks, and they were introduced in 1992 in the U.S. over 94% of the company's stores in
the U.S. are franchise-owned, while there are approximately 760 independent franchise owners
in the U.S. about 95% of Domino's independent franchise owners started their careers as hourly
workers, pizza makers, or drivers. The company recorded over USD 14.3 billion in retail sales in
2019, with more than $7 billion in the U.S. alone and approximately $7.3 billion globally. The

company operates a suite of ordering technologies named AnyWare, which offers customers 15
different digital ways to order and allows customers to order from any location, at any time,
through any device they prefer.

Problem Description

The main objective concerns process improvement particularly challenges with supplies
and demand forecasting. Domino's Pizza must have a good supply and demand forecasting
system to prevent high inventory. Without an adequate supply and demand forecasting system,
the company will continuously experience high-house and in-channel inventory. For instance,
Schell (2000) noted that the company's distribution division in the U.S. is responsible for
ensuring that its distribution centers are on no occasion overstocked or experience a shortage of
fresh ingredients. The distribution centers also supply over 4,500 stores with ingredients such as
dough, toppings, sauces, and pizza packaging. The distribution centers relied on Excel
spreadsheets to handle supply forecasting. Unfortunately, the Excel spreadsheets that the
distribution centers relied on for supplies forecasting were not effective and efficient.

The company needs a more efficient and real-time demand and supply forecasting
method. Schell (2000) noted that often the distribution centers ordered an additional supply of
items to serve as safety stock. If perishable items in the safety stock are not distributed quickly
enough to the stores, the company is forced to dispose of these items. The distribution centers are
also forced to pay upfront freight costs to deliver items at the last minute during some emergency

A real-time system for demand and supply forecasting allows the company to increase
inventory turns at its distribution centers. It is essential to turn over inventory quickly because
most of the ingredients Domino's Pizza uses to make its products are perishable. Secondly, a
real-time demand and forecasting system improves customer service because it reduces the
chances of ingredients running out of stock. Additionally, such a system helps to increase
efficiency in the purchasing process. Lastly, the system enables the company's distribution
centers to adjust stock for factors like coupon promotions, peak seasons, and bad weather.

Results by using the application of logistics and SCM concepts/tools

The logistics and SCM tool to be applied is a demand planning software that can help
standardize Domino's purchasing procedures and solve its forecasting problem. The supply chain
management software will replace the Excel spreadsheets that the company's distribution center
uses. The software is designed to factor uncertainties and variability within the supply chain. The
application can be helpful to two groups of users at the company. The first group of users is the
company's national purchasing managers at Domino's headquarters. Schell (2000) pointed out
that the national purchasing managers at Domino's headquarters are responsible for negotiating
annual contracts with the company's suppliers. The other users include buyers at each of the
company's distribution centers. According to Schell (2000), the buyers at Domino's distribution
centers are responsible for receiving and dispatching the shipped goods to the company's pizza

The demand planning software allows each distribution center to enter historical data
regarding demand. With this data in place, the software can compute future forecasts of supplies
by each distribution center. Once the software has made a forecast, the users can use a

replenishment function to suggest order quantities, safety stock, and order dates. The data moves
to the order-generation function, and the software can establish parameters for optimal shipping
settings. The system users can then review the suggested orders and approve them before
sending them to the purchasing function of the company's enterprise resource planning (ERP)
system for execution. Schell (2000) suggested that demand planning software can help
standardize an organization's purchasing procedures and ensure deliveries are complete, with the
right product, the right quantities, in good condition, and on time in one attempt. Domino's pizza
outlets will never experience situations when certain ingredients are out of stock with such a



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Schell, D. (2000). Supply Chain Management Helps Domino's Deliver. RetailIt Insights.
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