Supply Chain Management- BUS 5023- Group Project

Name of Business- Pizza Pizza

Course Name & Code- Supply Chain
Management- BUS 5023
Professor’s Name- Andrea Wilson
Group Members’ Names:
Cristiane Alvim Figueiredo - N01270909
Varun Doshi- N01279358
Vanisha Kannayya - N01270502
Vipinpreet Kaur- N01271162
Andreza Heitzmann Ortiz - N01280889
Date of Submission- 11th April 2019

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Supply Chain Management- BUS 5023- Group Project

Executive Summary
Pizza Pizza Ltd. is a franchised Canadian pizza quick-service restaurant, with its headquarters
in Toronto, Ontario. Its restaurants are mainly in the province of Ontario while other locations can
be found in the provinces of Quebec, Nova Scotia, Prince Edward Island and in Western Canada.
Franchises in western Canada are mostly run through Alberta-based subsidiary Pizza 73. It has
over 500 locations, including over 150 non-traditional locations.
Vision - Always the best food, made especially for you.
Mission - Our mission is to make each and every occasion with us an enjoyable and memorable
experience by offering the highest quality of fresh products and exemplary service, guaranteed!
The store that the group visited, located at 2814, Lakeshore Blvd W., Etobicoke, M8V 1H2, has
one store manager, two shift managers, one supervisor, 10 pizzaiolos, 5 cashiers and 5 delivery
drivers.
Pizza Pizza utilizes a vertically integrated system manufacturing and delivering most raw
materials to the stores; this system allows Pizza Pizza to leverage the purchasing power of
thousands of company-owned and franchised stores nationwide keeping food costs down;
increasing speed of service and improving sales/customer service.
The store receives all the materials from the Pizza Pizza Warehouse at Etobicoke. According to
the manager, the process flows smoothly and there is rarely a delay in delivery. The supply chain
management is standardized, since it is a franchise.
The lead time for this particular store is 2 days for the raw material and 40 minutes for the Pizza
delivery and the inventory levels is checked daily.

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Table of Contents

Page #

1.) Organizational Structure ………………………………………………………..4

2.) Supply Chain of Pizza Pizza…………………………………………………….6

3.) Pizza Pizza Warehouse at Etobicoke, Canada…………………………………..7

4.) Internal Functions of Pizza Pizza……………………………………………….8

5.) Statistics and Figures…………………………………………………………...9

6.) Forecasting & Operations Planning…………………………………………….9

7.) Objectives, Performance Measurements, Key Success Factors………………..10

8.) Competition…………………………………………………………………....11

9.) Successes & Opportunity for Improvement…………………………………....13

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1) Organizational Structure
This is the organizational structure at the Pizza Pizza located at the 2814, Lakeshore Blvd W.,
Etobicoke, M8V 1H2, that our group visited.

Pizzaiolos
Shift
Manager
Store Cashiers
Manager
Supervisor Delivery
Drivers

Store Manager - The manager is in charge of interviewing and hiring all employees in his
particular store. She is also the responsible person firing any team members if need be. The
manager creates a weekly schedule for the store. She has to take into account every team member's
availability, as well as keeping the schedule within the store's given labour percentages. The
manager also keeps tight controls on all financial aspects of the store. She is in charge of labour
control, product cost controls and waste control. Damage, theft and shortages are also her
responsibility.
Shift Manager(s) - Also known as Leads Crew Members who direct all daily operations of the
restaurant in the absence of the Store Manager including supervising and training employees,
opening and closing the store, ensuring all food preparation are complete, managing employee
breaks and shift changes, and completing shift summary reports. They also motivates and coaches
Crew Members, and assists in the training of new Crew Members. They also maintain fast, accurate
and outstanding service, ensure an excellent customer experience, and make sure all products are
consistent with company standards. There are two shift managers.
Supervisor - The supervisor oversees all front and back of the house restaurant operations. She
ensures customer satisfaction through promoting excellent service; responds to customer
complaints tactfully and professionally. She maintains quality control for all food served. She also
analyzes staff evaluations and feedback to improve the customer’s experience. She oversees health
code compliance and sanitation standards. She seeks ways to cut waste and decrease operational
costs.

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Pizzaiolos - A pizzaiolo is a person who bakes pizza in a pizzeria. Pizzaiolos monitor and maintain
a clean working and cooking surfaces to make pizzas. They also evaluate all food requirements
and maintain a standard level and quantity for same at all times. They also manage all food order
slips and administer all verbal instructions and perform all cooking as per instructions. The
pizzaiolos prepare all raw materials required for cooking such as cutting all vegetables and prepare
the dough. They monitor and ensure the exact measurement of all ingredients for all food items.
They analyze all customer order and ensure an appropriate number of all order for all customers.
There are ten pizzaiolos in total.
Cashiers - Cashiers receive payment by cash, cheque, credit cards, vouchers, or automatic debits.
They also issue receipts, refunds, credits, or change due to customers. They are required to count
money in cash drawers at the beginning of shifts to ensure that amounts are correct and that there
is adequate change. They are the ones who greet customers entering the restaurant. They maintain
clean and orderly checkout areas to make customers feel the home factor. There are five cashiers
in total.
Delivery Drivers - A pizza delivery driver distributes pizzas and related products by driving a
vehicle, often a light truck, van or a car. They pick up the orders from the franchise, load pizza
container and deliver them to the respective destination. They are professionals who are familiar
with the routes and shortcuts to reach the destination within the time limit set by the company for
delivery. They also require handling paperwork, such as obtaining a recipient’s signature when the
order has been delivered. They also collect payment from the customers. There are five delivery
drivers.

Blueprint of Pizza Pizza store

2) Supply Chain of Pizza Pizza

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The main objective of supply chain is to maximize the supply chain surplus to the optimum level.
The supply chain surplus can be found via subtracting Supply Chain Cost from Customer value;
hence elucidating it clearly that the main aim of a supply chain is to cut off the cost while enhancing
the value to the customer.
The following are the fundamental stages of a supply web:
1. Customers
2. Retailers
3. Wholesalers/Distributors
4. Manufacturers
5. Component/raw material supplier
Each of the above stages is linked through the two-way flow of product, information, and funds
that may be managed by a single stage or an intermediary.
Pizza Pizza follows the Push/Pull process of supply chain and hence the supply chain model is as
follows:

Suppliers Manufacturer Distributors Customers

Suppliers: The suppliers of Pizza Pizza include the ones who supply the materials to store in
commissary (their own warehouse), they are:
1. Meat sellers from meat markets
2. Vegetable sellers from vegetable markets
3. Sauce companies
Manufacturer: Pizza Pizza is the one and only manufacturer of its own products that are unique
in their own way.
Distributors: Pizza Pizza has taken care of the distribution services as well, that includes Pizza
Pizza’s logistic service of delivering the takeout orders within 30-40 minutes.
Customers: The customers of Pizza Pizza include everyone, from children to aged people to
geriatrics.

3) Pizza Pizza Warehouse at Etobicoke, Canada

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The above headquarters/warehouse is situated at 500, Kipling Avenue, Etobicoke. The main
function of this warehouse is to supply all materials to all Pizza Pizza stores in Ontario. Right from
the pizza dough to the cutlery used by customers are supplied exclusively by Pizza Pizza only.

Scenarios for placing an order:

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Scenario 1- Customer calls the call centre to place an order. The customer has two options: pick
up or delivery. The customer chooses pickup and places a web order. The confirmed order is sent
to the particular Pizza Pizza store nearest to the customer and a 40 minute guarantee is given to
the customer. Pizzaiolos then start preparing the order and pack it within the least possible time
from receiving the order so that customers don’t wait at the restaurant. The customer then picks it
up from the store. If the customer chose delivery then the pizzaiolos have only 25 minutes to
prepare and pack the whole order since delivery drivers would take an average 10 minutes to
deliver the order.

Scenario 2- Customer calls the store to place an order. The customer is advised that no pickup or
delivery order can be placed by calling the store. The customer has to call the call centre for either
pickup or delivery. The best option for a customer to walk in and place an order for either take out
or dine in.

4) Internal Functions of Pizza Pizza

Supply chain management denotes the mix of 3 main streams of knowledge and practical
experience, these are:
i) Sourcing, Procurement, and Supply management: These functions arise in the area of
obtaining/purchasing. All raw materials are directly provided by Pizza Pizza only.
ii) Material management: The functions that materials management erstwhile included are,
inventory management, stores management, warehousing, stock keeping, and scheduling but it
now includes production planning and production control as well to advance into the extended
materials management. Pizza Pizza has a specialized IT based reordering and material
management system.
iii) Logistics and distributions: This includes the stream of supply chain management that plans,
implements, and controls the efficient forward and reverse flow and storage of goods and services,
and related information between the point of origin and the point of consumption in order to meet

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the customer’s requirements. Delivery drivers from the warehouse supply all required material to
the store, which goes into the making of the pizza and that goes on to deliver to the final customer.

5) Statistics and Figures

Procurement cost A margin of 70% from supplier

Lead Times Raw material- 2 days, Pizza delivery- 40 minutes

Checked at the end of every day. Typically products are called

Inventory levels for a period of 10 days.

Sales-Inventory Ratio 4

Number of warehouses 1

Cycle times One transaction per 4 minutes

Through our extensive research and based on questions, we got to know that typically on a
weekday, Pizza Pizza has about 50 deliveries which goes up to 120 on weekends. When calculated
to cycle time and average transaction price, this comes up to 20,000 to 25,000 CAD per week. Out
of this, there are employment wages to be paid along with utility bills. 6% of revenue is given as
royalty and 3.5% is given to the Order Processing Department (Call Centre).
6) Forecasting and Operations Planning
Pizza Pizza uses a web-based IT system to place inventory order and material management. The
software system gets updated every quarter with the menu, price changes and internal software
installations. Inventory count is taken manually along with the help of other employees at the end
of every shift which helps them to meet their demand target and also suggests new targets. Through
this, forecasting for inventory and material management is done with utmost care along with the
help of the IT system. The inventory order is usually placed on the afternoons of Monday,
Wednesday and Friday. Delivery takes about two days from the warehouse to the store. The type
of distribution channel used by Pizza Pizza is the direct channel. The direct channel is successful
when there is an extremely large market that is geographically dispersed. The direct channel is
also useful when there are a large number of buyers, but a small amount purchased by each.

7) Objectives, Performance Measurements, Key Success Factors

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Consolidation of Financial Statements ending year 31st December, 2018

Revenue
Food sales $ 1, 393,067
Interest and other income $ 12, 788
Expenses
Cost of food $ 491,234
Amortization of deferred franchise costs $ 40, 354
Amortization of property, plant and equipment $ 48,514
Interest on loan from Pizza Pizza Holdings Trust $ 180, 000
Provision for (recovery of) income taxes $ 89, 990
Wages and Salaries $ 495, 879

Net surplus for the year $ 59, 884

Performance Measurements:

Pizza Pizza has followed a three-step stage for performance measurement which has eventually
lead to success. They are:
Step 1: Understanding the Customer & Supply Chain Uncertainty
Since consumers’ needs, wants and demands are pretty uncertain, an ambiguity in the supply chain
becomes apparent. A firm must acknowledge and understand the whole uncertainty of demand and
the uncertainty that arises in the supply chain in order to satisfy the consumer needs accordingly
and in an efficient way. Talking on a pragmatic level, Pizza Pizza is also in the race of
understanding its consumers and their fluctuating demands to better understand the resulting
fluctuations in the supply chain and to better serve their consumers with a way that leaves them
delighted. Pizza Pizza constantly keeps peeking through the curtains of minds of consumers during
Easter, Halloween, and other occasional/non occasional holidays/events; to become their
customers’ first choice; by coming up with new, tempting and alluring offers and tightens its
supply chain processes when the demand raises; e.g, the material procurement is increased, serving
time is reduced in order to swiftly serve the consumers waiting in the queue etc., and even keeps
offering varieties in their products, service level-and even keep asking for feedback to enhance
that, and keeps innovating the products while keeping in mind the consumer desires and outdo
their competitors.
Step 2: Understanding the Supply Chain Capabilities:
Since achieving strategic fit for serving the consumers in a way that leaves them completely
satisfied, no matter the uncertainty in the demand that a firm faces, the firms must fulfill the
demands it has targeted, in the best possible way, even in an uncertain environment. Pizza Pizza
makes sure that it stands on an optimum level of being responsive, it does not mean that it always
compromises on the ‘cost’ part. Pizza Pizza owns a warehouse and has good ties with the suppliers
of it to ensure that the cost is low enough to bear the future expenses. Moreover, it also goes for
higher margins in their pricing strategies to balance out the expenses and maintain profitability.
This shows that Pizza Pizza understands its supply chains capabilities and knows how to take the

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best use of it.

Step 3: Achieving Strategic Fit

At this lag end of achieving a strategic fit, Pizza Pizza ensure that the degree of supply chain
responsiveness is incessant with the implied uncertainty and hence the final goal is targeting,
promising and delivering high responsiveness for high implied uncertainty but high efficiency for
low implied uncertainty.

8) Competition

Major Competitors to Pizza Pizza include Domino’s Pizza, Pizza Hut, Pizza Nova, Gino’s Pizza,
Pizzaiolo & Boston Pizza. But particularly for the store we selected, Domino’s Pizza has been a
real competition since its opening in 2012. The Domino’s store which is right opposite to Pizza
Pizza on Third Street (Lakeshore Blvd W), Etobicoke. It has been stated that Domino’s took almost
18% of their sales since 2014. Expanding more into that information: a typical Friday & Saturday
night delivery would have been for more than 150 deliveries which have been reduced to
approximately 120 deliveries. But the only source of Pizza Pizza’s success is their pizza slices
which Domino’s does not offer to its customers.

Internet Research:

Though the list below is far from exhaustive — especially with fantastic local slices and personal
pies available across the country — it’s a springboard for this important national discussion about
the pizza lifestyle.

Domino’s
Saucy in all the right ways, Domino’s first wooed people years ago with its frequent and
aggressively priced sales (especially for quick walk-ins) but kept people around for its fantastic
taste. Lighter on the cheese, the sauce jumps out with a bit of a spicy kick to it. The original crust
is doughier than others, so it’s not heavy eating. No slices, but their personal pizzas are made in
minutes.

Pizzaiolo
Primarily a Toronto-based chain, Pizzaiolo is one of the best slices you can get if you can track
one down. It’s light on the stomach due to its doughier nature but always has a decent walk-in
selection.

Pizza Nova
The slices are flavourful and have a unique sauce that boosts its credibility, plus the chain was one
of the first to offer vegan and other dietary needs for those needing options.

Panago
This is always one of those slices that don’t immediately come to mind when you think pizza, but
once you get one you remember it is pretty tasty. Sort of like Pizzaiolo, it’s a lighter slice with an

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emphasis on its crust but it isn’t as doughy as the competitor. It’s particularly popular on the west
coast but has been quietly taking over the Toronto area now, too.

241 Pizza
It’s not that 241 slices are bad, they just aren’t memorable. Often cheap and available in combos,
the pizza you get here tastes perfectly middle-of-the-road but sometimes there are consistency
issues based on location.

Little Caesar’s
Convenience is key, but it comes with tradeoffs. Little Caesar’s hot-and-ready pizzas are what
people see as advertised when they are sitting there waiting for the taking. That said, they are also
just sitting there waiting. The pizzas are okay when lack of time is a factor, but with prices
continually on the rise, people can get way better dishes elsewhere for a similar price now. That
said, Little Caesar’s so-called “deep dish” — though not a true deep dish — is pretty tasty.

The challenges faced by Pizza Pizza in achieving maximum success and growth include;
1) Globalization & increasing uncertainty
2) Changing technology and business environment
3) The environment & sustainability issue

Pizza Pizza has been sweating blood since its inception to lessen these issues to their minimum
possible level and is proud to publicize its success in achieving this. Globalization and increasing
taxation have severely affect Pizza Pizza but they still managed to cope with these uncertainties
by their interesting deal offers, increasing service level, while reduced lead times, and by coming
up with some of the most deliciously innovative products to keep the customers lured. In such a
highly competitive market, where Pizza Pizza faces a lot of competition and differentiation that
may lead to outdoing Pizza Pizza but it stands firm in the market of Pizzas by its counter strategies
of coming up with a higher quality innovative products, service etc.
Environment and sustainability is also an issue that every organization has encountered in this era
and so has Pizza Pizza, but it deals with this issue efficaciously by introducing the boxes, in which
the pizza is served in the take away orders, which are environment friendly and do not harm our
precious nature in any way.

9) Successes and Opportunity for Improvement

Success Factors

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Loyal Customers - “Club 11-11” loyalty program, which is exclusive to Pizza Pizza and offers a
hybrid loyalty and gift card all-in-one. Consumers will earn dough for doing something they’ve
been doing consistently, and increasingly, for more than 46 years: enjoying Pizza Pizza’s diverse
menu. As an introductory offer, customers who enroll in the card-based program collect a 10
percent credit on every walk-in or pick-up purchase made at any of Pizza Pizza’s 390 restaurants
in Ontario, Manitoba and Saskatchewan. The credit – called “Pizza Pizza Dough” – is
automatically loaded on the loyalty card, separate from any pre-loaded cash amounts. On every
11th purchase, the earned “dough” from the previous ten purchases is unlocked for redemption on
a walk-in or pick-up purchases.

Innovation & Technology Changes - As technology has proliferated further into daily life, Pizza
Pizza has used innovations such as digital ordering to make the user experience easier and more
convenient. Today, 50% of sales come through online platforms like the Pizza Pizza’s app and
website. The company launched online ordering in 2008, and took operations in-house in 2010,
introducing mobile apps and later a voice-ordering application. The company also created the
Pizza Pizza Tracker, which allows customers to follow their pizza from the oven to their doorstep.
Pizza Pizza reviews their menu every quarter and changes them every 6 months with new flavours.

Opportunities for Improvement

Low international penetration - As of December 2017, the international segment accounted for
just 3% of Pizza Pizza revenue and has never been an important driver of growth. If we take into
account the success that North American restaurant chains usually have outside the domestic
market and the more positive economic and demographic trends in Asia, Middle East and Latin
America, the low international penetration is a factor that should translate into many years of
growth.

Supply Chain Performance Measurement

Action to be taken: Analyze and define a set of key performance indicators – KPIs – to be
managed regarding to areas involved in the supply chain;
Considerations: Especially in this business, delivery of quality food is a crucial process for the
success of the company. However, implementing KPIs has to be quantitative, easy to understand,
visible and needs to ensure that every part is involved in moving towards in the same direction.
(Univ. Tennessee Council of Logistics Management, 1999);
Potential benefits: Ensure the reliability of the product and the process.
As a first step, a list of common key performance indicators could be used as a guide to choose the
ones that would be useful for Pizza Pizza. As the example (Figure 9.1 - Univ. Tennessee Council
of Logistics Management, 1999, p8), they might be effective to manage time, quality, cost and
other supporting issues.

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(Figure 9.1 - Univ. Tennesee Council of Logistics Management, 1999, p8)

After defining the set of KPIs to be used, Pizza Pizza team would have to come up not only
with how to evaluate them, but also to stipulate the weight factor which would allow the calculation
of the final performance, as in this given example (Figure 9.2 - Source: Brian J. Gibson, Ph.D.)

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(Figure 9.2 - Source: Brian J. Gibson, Ph.D.)

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REFERENCES

Koebler, Durtsche, Manrodt, & Ledyard, Keeping score: Measuring the business value of logistics
in the supply chain (Univ. Tennesee Council of Logistics Management, 1999). p8

Pizza Pizza- 2814, Lakeshore Blvd W., Etobicoke, M8V 1H2

Manager - Vanessa Francis; Contact number - +1 416- 832- 2790

People we interviewed - Vanessa Francis: Store Manager, Anuj Parekh: Cashier & Hussain:
Pizzaiolo.

https://nationalpost.com/life/food/fast-food-week-from-pizza-pizza-to-little-caesars-the-best-and-
worst-personal-pies-in-canada

https://www.pizzapizza.ca/

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Appendices

Team members with Store Manager

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Online IT system for logistics ordering and demand forecasting

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Storage for pizza boxes

Storage for other inventory such as ‘pops’ and delivery bags.

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Delivery area

Cold storage area for frozen items

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Storage area for pizza toppings

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