Big Data Analytics

Big data is collection of large and complex data that cannot be processed by using normal data processing systems. Analytics refers to getting meaningful patterns from an unstructured or semi-structured data. Now Big Data Analytics is processing large data (Unstructured, semi-structured and structured) to discover unknown correlations, hidden data patterns, consumer preferences, market trends and other useful business information.

The results of analysis can be used for improving operational efficiency, better targeting of potential customer, new avenues for revenue generation, gaining competitive edge over rival firms and better customer service. The main aim of big data analytics is to help various firms to take more informed business decisions by enabling analytics professionals and data scientists  to analyze and interpret huge volumes of data  which is untapped by traditional business intelligence programs.

                

Big data encompasses internet clicks information, server logs, Content in Social media,various Social network reports, ,mobile phone call records, customer survey responses and market research data etc. Usually only unstructured and semi-structured data is associated with big data, but consulting companies like Forrester and Gartner consider structured data also as a valid component of big data.

Technologies in Big Data Analytics

Some software tools that are used to analyze big data are based on predictive analytics .There are new class of technologies such as Hadoop and related tools such as MapReduce, YARN, Spark, Pig and NoSQL databases which can process Big data. These technologies form crucial part of an open source software that supports the processing of large and diverse data.

Hadoop

Hadoop is a open source Java-based programming framework that supports the processing of huge data sets in a distributed computing environment. It is part of Apache Software Foundation. It was inspired by Google's MapReduce, a software framework in which any application is divided into numerous small parts. These parts (also called fragments or blocks) can be run on any node (a connection point in a network) in the cluster.

Illustration of Big Data Analytics

         

                                       Big Data Analytics solution by LogicMatter

        Let us now illustrate how big data analytics solution is implemented using Hadoop. LogicMatter is a low cost Big Data Analytics solution provider.  Here traditional (e.g. ODS, EDW) and emerging (Hadoop MapReduce) analytical tools are combined to operate on big data. The data platform is built on the powerful and flexible Amazon Web Services Cloud platform. To capture, process, store and transform data, Hadoop is used with the LogicMatter-designed Analytical Data Store (ADS). File-based storage service of Hadoop is used by platform for flexible and fast data processing .This big data analytics platform enables the continuous delivery of both real-time and historical analytics via the popular Tableau.

The Analytics platform and solutions is built specifically to solve some complex customer problems such as clickstream analytics, video analytics, sales performance analysis, fraud detection and financial analytics.

Data Sources

This platform enables to collect, process, store, and transform both unstructured and structured data exclusively for analytical purposes. It can quickly process various varieties of unstructured data including  text, documents, weblogs, XML files, Excel, audio & video, call logs), clickstream, and event data. It can also simultaneously process structured data from familiar enterprise data sources such as CRM, ERP and SQL Databases.

The data collection process is separated from transformation and analysis. It allows us to easily add data sources of unknown and known kind without impacting the analysis, a huge challenge with present analytics solutions. Transformation of data is delayed till you need to do the analysis wastage and reducing upfront costs.

Data Platform

The AWS data platform consists of two primary components:

 -Hadoop Cluster.

 -LogicMatter-designed ADS (Analytical Data Service).

The flexible and scalable Hadoop technology is used to collect both structured and unstructured data. The data collected is integrated, pre-processed and stored in ADS. The flat file-based storage system of Hadoop allows you to scale quickly as well as handle large amounts of known and unknown data. Hadoop is an integrated and intermediate data source and acts as a feeder to the ADS.The data from Hadoop is mapped and transformed to develop a data model. The model built iteratively and stored in the ADS forms the basis for a powerful analytics. ADS uses traditional data warehouse technology – Cubes, and OLAP. Hence, it supports all the powerful and traditional analytical techniques that you are used to (dashboards ,reports, scorecards etc.).     

Visualization

One of the unique design features of LogicMatter’s Big Data Analytics services is to enable continuous analytics both real-time and historical .As there is an integrated data discovery platform ,the visualization tool is directly connected to either Hadoop or ADS for development the analytics. Ad-hoc queries can be run against Hadoop for exploratory analytics and instant  data access . For the standard, canned reports and dashboards, you connect to the ADS to gain a historical perspective.

The data platform is so flexible that you can easily connect any of your favorite visualization tools (such as Qlikview ,Excel,).

Testimonials Of Big Data Analytics

There are several examples of how bigger, better, faster, stronger applications, analytics, sensors, and networks are creating results with big data today across various industries.

1. The Financial Services Industry

The financial services industry uses big data to make better financial decisions. Banking gaint Morgan Stanley ran into issues doing portfolio analysis on some traditional databases and now uses Hadoop to analyze investments on a larger scale and with better results. Hadoop is also used in the industry for sentiment analysis, financial trades and predictive analytics.

2. The Automotive Industry 

Ford’s modern hybrid Fusion model generates up to 25 GB of data per hour. Data obtained can be used to understand driving behaviors, reduce accidents, understand wear and tear to identify issues that lower maintenance costs, avoid accidents, and even confirm travelling arrangements.

3. Supply Chain And Logistics

Companies like Union Pacific Railroad use thermometers and ultrasound to capture data about their engines and send it for analysis to identify equipment at risk for failure if any. The world’s largest  multi-carrier network for the ocean shipping industry-INTTRA uses it’s OceanMetricsapplication to allow shippers and carriers to measure their own performance. Companies are also using telematics and big data to streamline trucking fleets . GE believes these types new capabilities can contribute $15 trillion to the global GDP by 2030 by using systematic and data-driven analysis.

4. Retail

Walmart is using big data from 10 different websites to feed shoppers transaction data into analytical devices. Sears and Kmart are trying to improve the personalization of marketing campaigns and offers with big data to compete better with Wal-Mart and Target.

Practical Big Data Benefits

Develop Target Markets

By analyzing the various customers purchasing orders, companies can now know better about customers who are buying their products. Companies can accordingly target on those customers.

Customize your website in real time

Thorough big data analytics companies can personalize their websites and portals based on gender, location and nationality of customers and offer them tailored recommendations .The best example for this is Amazon’s use  item-based, collaborative filtering (IBCF).Amazon uses

Features such as “Customers who bought this item also bought” and “frequently bought together” to reach more customers. Amazon could generate more revenue through these methods.

Create new revenue streams

The insights that a company obtain from analyzing market and consumers with Big Data are not just valuable to that company. Firms could sell them as non-personalized trend data to large industry players operating in the same segment and create a whole new revenue stream.

There are many companies like Bloomberg and Analytics Quotient which sell the analyzed information to other companies and generate revenues.

Reducing maintenance costs

Factories estimate that a certain type of equipment is likely to wear out after some years. So, they replace every piece of that technology within that many years. Big Data tools do away with such unpractical and costly practices. Massive amounts of data that they access and use and their unequalled speed can spot failing devices and predict the depreciation time. This results in a much more cost-effective replacement strategy for the utility as faulty devices are tracked a lot faster now.

Offering enterprise-wide insights

Previously when business users needed to analyze large amounts of varied data, they had to ask their IT colleagues for help as they themselves lacked the technical expertise. But by the time they received the requested information, it was no longer useful or even correct. Now With Big Data tools, the technical teams can do the groundwork and then build  algorithms for faster searches. They can develop systems and install interactive and dynamic visualization tools that allow business users to analyze, view and benefit from the crucial data.

Making Smart Cities

To deal with the consequences of their fast expansion, more  number of smart cities are indeed leveraging Big Data tools for the benefit of their citizens. Oslo in Norway, for instance, reduced street lighting energy consumption by 62% with a smart solution. The Memphis Police Department started using predictive software in 2006 and has been able to reduce serious crime by 30 %. Portland city in Oregon, used technology to optimize the timing of its traffic signals and was able to eliminate more CO2 emissions in just six years.

References:

http://searchbusinessanalytics.techtarget.com/definition/big-data-analytics

http://dermatological/big-data-analytics-services-solutions/

http://blog.pivotal.io/pivotal/news-2/20-examples-of-getting-results-with-big-data

http://en.wikipedia.org/wiki/Apache_Hadoop

 The article is written by B.kiran kumar.He is currently a PGP first year student of IIM Raipur.He has 3.9 years of experience at virtusa.

REVERSE LOGISTICS IN RETAIL – BEST PRACTICES IN THE INDUSTRY

Reverse logistics - “the forgotten child of the Supply Chain” is gaining prominence in the market today. Previously, the organizations were not making use of reverse logistics. But today, reverse logistics is a key tool for value addition and growth strategy. With increasing customer awareness, it is not only important to deliver the goods to them but also to make sure that a return channel also exists. Thus, reverse logistics helps an organization in not only getting the goods back but also for repairs and redistribution.

Reverse logistics is defined by the council of management as “The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.”. In short the travel back from the customers end to the manufacturer is called as the reverse logistics- an invert of logistics. Reverse logistics includes return policy, product recall, repairs, repackaging, recycling, parts management, liquidation, disposition management and many more. It plays a very crucial role in the field of retail it helps in building brand loyalty and better customer experience.

At the time when the retail industry is facing losses to the tune of $40 billion due to sales returns, having reverse logistics can help build the profits as high as 15% with care. In addition to it (this) the reverse logistics also protects profits, gives customer loyalty, disposal benefits and maximize recovery rates.  

Source:UPS

LAST MILE DELIVERY –INDIAN CONTEXT

What is common amongst  P&G, HUL, Dominos, EBAY, Flip kart, & our local newspaper delivery person?

It is the constant struggle and innovation that they have to do in order to ensure an efficient last mile delivery of their product at the customer’s doorstep. For any company it is very important to deliver its product economically, timely, reliably and efficiently to maintain an edge in the market. But distribution in India is not an easy job. The geographical diversity, inconsistent infrastructure and low at par transport facilities form major challenges for a company to plan its distribution network. Moreover there is a multi-layered distribution system in India comprising of number of middlemen which increase the cost as well as time of delivery.

Another problem is that there are a large number of fragmented and unorganized shops all around the country which add up to the complexities of the distribution network. Also due to the lack of proper communication system, the companies are unable to keep a proper track of stock movement which many times leads to unavailability of the product when the customers require it.

The TV channels have to rely on a number of cable operators around the country, the pharmaceutical companies have to rely on large number of stockist's, semi stockist’s retailers and distributors to avoid the non availability of the medicine which is critical in this industry. During a recent analysts call, Apple's Tim Cook cited India's multi-layered distribution as the main reason for his company's small share of the market. The delivery of fresh vegetables to the market depends heavily  on the middlemen in mandis and any delay in the transportation leads to a whole lot of wastage.

Recently a report by research firm McKinsey & Company said that the Indian demographic will go through significant changes which would drive unique supply chain complexities. Research by McKinsey Global Institute suggests that by 2030, there will be 68 cities, each with population greater than one million (up from 42 cities in 2008). This is nearly 60 per cent growth over two decades. Cities will cater to a significantly large population. By 2030, around 590 million people will live in Indian cities, and around 200 million rural Indian living in the proximity of cities will depend on cities for growth. By 2030, the per capita disposable income in urban India is expected to grow four-fold. Around 100 million households will move up to the middle class. This is based on annual income between Rs. 2 lakh and Rs. 10 lakh.

The above report points to the growing demand and huge untapped market in India which is a major opportunity for the companies but this also means a bigger challenge in coming up with innovative supply chain solutions for the increasing distribution complexities. Mckinsey suggested that the companies should focus on channel innovation, consumer differentiation, volatility, near shoring and talent scarcity. Also one can learn from how Tupperware has carefully used the agents and women social groups to directly reach the customers. Another strategy that companies can look for is associating with the existing distribution channel as P&G did when it entered the Indian market by associating with the Godrej. Complex products or services may require setting up a complete channel including systems integration as Husk Power Systems used a “micro-franchising model” to supply equipment and training to local entrepreneurs to set up and operate village power-systems in India.

One of the most interesting innovations in the area of the last mile delivery is the impeccable delivery system of the Mumbai Dabbawallas. The Mumbai dabbawalla with six sigma certificate have been delivering around 200000 lunches daily without any error for a long time. The secret behind their efficient and robust system lies in the use of the existing train network and cycles.

Third-party logistics providers have a significant role in optimising the supply chain performance and costs where standalone supply chains cannot be economical and fruitful partnerships cannot be created. Services like logistics, delivery & payment collections and referral services, which are often complementary to online transactions, have become crucial for the e-commerce industry as portals jostle for more clicks in a crowded space. For instance, when 22-year old Aadhar Aggarwal opened an online grocery store, he realised that it was the logistics part of the business that was becoming a challenge. This led him to start Chottu.in, a last mile logistics firm that specialises in delivering the product at the customer's doorstep. Cash-on-delivery has become an important option for a lot of online buyers. Newbie firms like Hyderabad-based Gharpay are betting big on the growing need for cash collection firms.

References:
http://www.thehindubusinessline.com/industry-and-economy/logistics/article3524186.ece
http://www.socialedge.org/discussions/business-models/distribution-models
http://www.thehindubusinessline.com/industry-and-economy/logistics/the-last-mile-challenges-for-drugmakers/article4019429.ece
http://blogs.hbr.org/cs/2012/08/in_india_distribution_is_god.html
http://articles.economictimes.indiatimes.com/2011-12-06/news/30481643_1_e-commerce-ecommerce-logistics
http://www.telegraphindia.com/1120724/jsp/entertainment/story_15762564.jsp#.UK409of0DCQ

About the Author:

The author of this article is Pulak Jain. She is a first year PGP student at IIM Raipur. She graduated in Electronics and Communications Engineering from IGIT,GGSIPU Delhi. Her interests include

reading fiction and philosophy. She can be reached at pgp12113.pulak@iimraipur.ac.in

Best Practices at Flipkart

 Flipkart an electronic commerce company was established by Sachin Bansal and Binny Bansal in 2007 and now it is among India’s largest online retailers with reported sales of Rs 75 crore for year 2011-11. Sachin Bansal and Binny Bansal both are alumni of Indian Institute of Technology Delhi who started this company after quieting their jobs in Amazon.com with a vision To be one of the largest multi-category e-commerce destinations in India, with a strong focus on customer service.

  
Initially Flipkart started with selling books online and has since diversified into a generic e-commerce site, selling CDs/DVDs of music, movies, games and software, as well mobile phones and electronics. According to the co-founder Sachin Bansal, “We started with books because they are a comparatively easy category  products to sell online. They do not require huge inventory maintenance, are easier to negotiate  supplier  terms and profit margins are high.” Also since books are low value items, inducing  customer trial was easy. It  was a safe option to start off with books, given their appreciation in e-commerce the world over. Now Flipkart have about 11.5 million book titles, 11 different categories, more than 2 million registered users and sale of 30000 items a day which makes it India's answer to Amazon. All this was possible because of the major goal of the company is to provide a memorable online shopping experience to their customers so that they come back again and again using innovative services like Cash on Delivery, a 30-day replacement policy, EMI options, free shipping , discounted price and very importantly on time delivery of the products.

Mr. Sachin Bansal

The role of logistics in the successful functioning of an e-commerce venture is indispensable. All these innovative services will be ineffective if the products do not reach the customers on time. Here are some Best Practices of the Supply Chain of Flipkart:

Building the Suppliers base- The Company has established a network of more than 500 distributors and only stocks frequently ordered items. Items like the 'Long tail' are almost always sourced from suppliers in real time and as and when the customer places an order.

Building Infrastructure for Operations- The Company has 4 offices in 4 metros cities with more than 500 employees. Warehouses of the company are located in 7 cities including the metros. Company has tie-ups with more than 15 courier companies like Blue Dart, First Flight etc. to deliver their products and Indian post for areas where courier do not reach.

The Process of Supply Chain- The first step in buying the products like books online from the Filpkart.com site by making payments using payments options like credit/debit card, cash-on-delivery, net banking, cheque/DD and money order and enter the phone number and address where the items need to be delivered.

Depending on items purchased they are packed and shipped accordingly for example mobile phones and books are packed differently as per requirement and also all items have transit insurance against theft and damages that may be caused while they are in transit. Flipkart bears the cost of delivery and this make them give a reason/motivator for improving efficiency at every point of supply chain. This also makes them differentiate from their competitors.

Now for delivering the items depending upon the area where the item need to be delivered either courier, Indian post or own internal logistics arm is used. The delivery time varies between less than 24 hours and 3 weeks depending on the location and availability of the product like the products which are imported take 3 weeks time to get delivered to the customers.

The inter-city, trans-zone deliveries are made using air cargo. For satellite cities and others in close proximity, products are transported overnight by train or truck.

For the local parts of the cities where the warehouses of the company exist products are delivered using two-wheelers, bicycles, or on foot depending upon the proximity of the place and because of this many of the deliveries are made within a day of the order being made. All the Team Members have been trained to work efficiently to meet customer expectations.

Use of Information system: The Company use sales to predict the inventory levels. The warehouses are split into multiple areas — inventory, packing, shipping and so on. The stocks are replenished every 24-48 hours. In the Back End, Flipkart stores details of all the transactions that need to be carried out. They have an understanding with their associates for order tracking, reconciliation and MIS (Management Information Systems) reports. The private courier companies in turn have their own ways of tracking every package. The customer is also updated about the status of his shipment via message, email or through the website.

When the product needs to be returned then due to the companies understanding with the courier companies it happens without any disputes or problems efficiently. “Flipkart takes care of the after-sales needs of its customers with regard to delivery of an item or addressing grievances including delayed delivery by the logistics partner, or addressing issues when an incorrect product is delivered. In the case of electronics, warranty and after-sales service is largely the responsibility of the manufacturer. Flipkart does however facilitate interaction between the customer and manufacturer/service center as and when the need arises.”[1]

Future for E-Commerce: India has 11 million online customers now which will increase to 30 million by 2015 which shows that the e-commerce industry with the increased internet penetration will be the service sector's growth engine in India. The industry's size is expected to increase to $11.8 b. Among the challenges faced by the industry is its dependency on the service providers like suppliers, logistics service providers, etc. whose service in not up to the expectation and are affecting the service of the online companies. To solve this issue efforts are to be made to educate these service providers the importance of using technology and provide them incentives to use these technology and shift their focus on to the customers. Seeing the prospects of growth a lot of new online retailers have come up and there is a price war going on to attract more and more customers which is putting pressure on the profitability of the companies so it has become extremely important to manage cost to increase profits which is only possible by building an efficient backend- a nationwide delivery network, warehouses , inventory management , logistics, efficient teams to manage all this therefore supply chain management becomes an important factor on which companies depend to sustain in this industry. Flipkart obtained funding from Tiger global management in 2010 which is being utilized by the company for strengthening supply chain capacity and upgrading technology platforms, including automation at warehouses.

References:

[1] http://logisticsweek.com/news/2011/03/not-only-words/

[2] http://www.flipkart.com/about-us

[3] http://www.livemint.com/2011/06/16233030/Flipkart-raises-20-mn-from-Ti.html

[4] Articles from Economic Times

Vishal Singh is a PGP student of Indian Institute of Management Raipur. He has done his B.Tech in Chemical Engineering from BITS-Pilani, Pilani (Rajasthan) and can be reached at pgp11047.vishal@iimraipur.ac.in or at +91-7587208647.

SAFEXPRESS

 Safexpress has created benchmark in terms of the “Knowledge Leader” in the Supply Chain & Logistics Industry. With the mission of adopting and internalizing a work culture demonstrating a “We can We will” attitude to reflect in daily responsibilities with exceeding objective towards market dominance., Safexpress has vision of conscious learning organization maintaining flexibility for change for providing the most customized solutions. The company has expanded its reach to 560 destinations across India through more than 3,600 GPS enabled vehicles, across 35 states and union territories delivering 80 million packages a year, with ware house space of over 6 million square feet. With the operations of 24 X 7 in real time Safexpress provides Express Distribution, Third party Logistics services & supply chain Consulting. By Implementing Innovative and benchmarking services, the company has given a new face to Supply Chain & Logistics Industry.

As a service provider of third party logistics, the company allows the clients to focus on their own core competencies. Which means clients can focus more on the expertise of field leaving the logistics expertise to Safexpress. The ever increasing need for technological flexibility is another important advantage of the use of Safexpress as the third party logistics provider. The Company has been able to cope up with the advanced technology coming in the Logistics Industries. Thus outsourcing logistics to the Safexpress reduces the lead time and improves the service level. Safexpress provides Technological Flexibility to the client. The company gives flexibility to the client for the service in the different geographical location.

Investments in coss-docking strategy has given Safexpress The Competitive Advantage. In such strategy warehouses function as inventory coordination points rather than as inventory storage points, so goods arrive at warehouses from manufactures and are transferred to the retailer’s vehicle, so that delivery time can be reduced as much as possible. Thus Safexpress indirectly cuts down  the inventory cost of manufacturer/distributor & decreases the storage time which finally leads  to reduction in lead time. But all in all cross-docking needs an initial investment and startup setups. Still Safexpress has managed to implement it by-
        o   Linking Distribution centers, retailers and supplier by advance information systems

        o   Fast and responsive transport system

o   Accuracy in forecast by multistage information sharing



All these have not only added value to the manufacturer/distributor but also to the whole Supply Chain Process. 

A unique value-added Supply Chain & Logistics Service, Reverse Logistics has reduced the time and cost involved in carrying defective parts. This kind of logistics is generally used for shipping the defective parts from retailer to distributor and finally to the manufacturer. Safexpress directly takes these defective goods under its possession and moves them to its warehouses where they are repaired and re-shipped.  Services such as reverse movement of goods, repacking, re-labeling, refurbishing provided by Safexpress was a step to reduce the time and cost involved in the backward supply chain & prevented customer dissatisfaction, cash lockdown for the retailer and a rise in the distributor‘s inventory. For providing reverse logistics to clients, Safexpress has deployed reverse logistics centers, where they stock thousands of Stock Keeping Units (SKU) of the client and employ well trained professionals to handle the product. Indeed, Safexpress has revolutionized the Logistics Industry in India.

 The writer of this article, Amol Deogade is a PGP student of Indian Institute of Management, Raipur and has done his B.E. from Government College of Engineering, Amravati. Prior to joining IIM Raipur, Amol was working at Cognizant Technology Solutions. Amol can be reached at titanamol@gmail.com

Supply Chain Improvements in Wal-Mart

Wal-Mart the retail giant has been successful to attract customers through the unbelievably low prices it charges for its products. ‘Everyday Low prices’ is the atrocious slogan Wal-Mart dared to use for a long period and which it has displayed in action. Such an accomplishment could be achieved by Wal-Mart as it was successful in creating a great supply chain on which it had a high degree of command. The growth model which Wal-Mart followed was based on excelling in the logistics. The real power derived by Wal-Mart was due to the fact that it could put pressure on its suppliers on account of its huge purchasing power. Wal-Mart has an enormous control over its suppliers and dictates terms in what to produce, when to produce and the price of the produced goods.

Wal-Mart can exercise the power it does on its suppliers as it is the organization in the supply chain which is controlling the end sales. The sales information which is vital to all players of the supply chain can be provided only by the end retailer. Wal-Mart maintains a collection of last two years sales data which it shares with its suppliers. Thus, it saves the effort on Wal-Mart’s part in situations where they can do away with the purchase orders. The suppliers themselves analyze the sales data and determine how much to produce. Wal-Mart also uses this system to predict future sales data which is again very attractive to the suppliers. Thus, handling of such a huge volume of data has become a core competency of Wal-Mart. It just has to provide the adequate training to the suppliers to use this data effectively, and thereby minimize its own and its suppliers’ costs.

Another area of the supply Chain where Wal-Mart has shown innovative thinking is the area of transportation. The complex transportation network necessitates bringing all the supplies from different producers from different areas to one location which is highly complicated and requires sophistication. This is where the second core competency of Wal-Mart lies. Wal-Mart has also achieved high levels of Logistics Coordination by establishing buying offices around the world. It does not use intermediate warehouses and has abolished middle men from the chain. This has also led to lowering of costs resulting in higher revenues.

Wal-Mart has chosen to establish suppliers in countries which have lower costs of production to lower costs. It has thus utilized technology, invested creatively trained the members of its supply chain and used its purchasing power to create an effective supply chain which has been at the core of its success. It thus has established a pioneering position in the retail industry which is now being emulated worldwide.

References:

http://www.freepatentsonline.com/article/International-Journal-Business-Strategy/208534987.html

Supratik Saha is a PGP student of Indian Institute of Management, Raipur. He has done his B.Tech. in Computer Science & Engineering from Siliguri Institute of Technology, West Bengal and can be reached at totoslg @ gmail . com

Domino’s India Logistic management

In 1960, two brothers who were students of the University of Michigan - Thomas S. Monaghan (Thomas) and James S. Monaghan (James) - bought the store for US$900. In 1961, James sold his share of business to Thomas. The pizza business did well and by 1965, Thomas was able to open two more stores in the town - Pizza King and Pizza from the Prop. Within a year, Varti opened a pizza store in a neighborhood town with the same name, DomiNick's Pizza. Thomas decided to change the name of his first store, DomiNick's Pizza, and one of his employees suggested the name Domino's Pizza (Domino's). In 1982, Domino's Pizza established Domino's Pizza International (DPI) that was made responsible for opening Domino's stores internationally. The first store was opened in Winnipeg, Canada. Within a year, DPI spread to more than 50 countries and in 1983, it inaugurated its 1000th store.

When Domino's entered India, the concept of home delivery was still in its nascent stages. It existed only in some major cities and was restricted to delivery by the friendly neighborhood fast food outlets. Eating out at 'branded' restaurants was more common. To penetrate the Indian market, Domino's introduced an integrated home delivery system from a network of company outlets within 30 minutes of the order. Goutham Advani (Advani), Chief of Marketing, Domino's Pizza India, said, "What really worked its way into the Indian mind set was the promised 30-minute delivery." Domino's also offered compensation: Rs.30/- off the price tag if there was a delay in delivery. For the first 4 years in India, Domino's concentrated on its 'Delivery' strategy.

The CEO of Domino’s Pizza India is a man in hurry. Ever since he took over as the CEO of Domino’s in November 1999, he had been frantically reworking the pizza chain’s strategy. In late 1999, Indocean Chase, the private equity fund bought a 25% stake in Domino's operations in India from the Delhi-based industrial family, the Bhartias, who held Domino's franchise in India. Domino's told investment bankers at the fund that it planned to go in for an initial public offering (IPO) in the next two years. Indocean Chase advised Domino's to go beyond its 16 outlets in Delhi to exploit the potential in the pizza delivery business. Unless a well-thought-out expansion plan was put into place, the IPO was unlikely to find too many takers. As part of its expansion plans Domino's revamped its entire supply chain operations, from sourcing raw materials to shipping them for processing at a central location to delivering it to the customer's.

Initially, Domino's had a simple model. It had three self-contained commissaries in New Delhi, Mumbai and Bangalore which bought their own wheat, tomatoes and other ingredients, processed them, and then delivered them in refrigerated trucks to each outlet. However, volumes were expected to increase when Domino's planned to open new outlets. Therefore, the existing model had to be revamped. Bhatia said, "It's crucial for us to build a low-cost supply chain operation which takes costs out of the system and in turn gives us greater pricing flexibility in the marketplace."

The logistics model adopted by Domino's offered some obvious benefits including lower transportation costs, cheaper procurement and economies of scale. Domino's had already cut out the duplication in procurement and processing of raw materials across each of the three commissaries. The old model of self-contained commissaries had another disadvantage: adding new outlets did not translate into greater economies of scale. Domino's also identified specialty crops in each region. The commissary in that region was entrusted with the task of processing that specialty crop. For instance, the commissary for the eastern region in Kolkata was responsible for buying tomatoes, processing them and then sending them to all the other commissaries. Similarly, the northern commissary had to deliver pizza bases. This way, Domino's minimized duplication as well as the dangers of perish ability.

Domino's hoped to lower its prices by saving from the logistics model and third-party transportation. In April 2000, Domino's announced a cut in pizza prices to Rs 49. Domino's was also targeting large corporate offices, railway stations, cinema halls and university campuses for faster growth. It had already established an outlet at Infosys corporate office in Bangalore and at three cinema halls - PVR in Delhi, Rex in Bangalore and New Empire in Kolkata and growing at a faster rate. Domino's also classified its outlets into Super stores, Express stores and Regular stores. Super stores were those, which generated high traffic and therefore had more counters than the regular outlets (the outlet in Churchgate, Mumbai). Express stores were those where people were expected to walk in and order rather than ask for home delivery (university campuses, offices or cinema halls).

References :  http://www.icmrindia.org/free%20resources/casestudies/Domino-Logistics20Management.htm

Shashi Bharti has done his B.Tech. in Electronics and Communication Engineering from NIT, Hamirpur and has worked in Tata Consultancy Services for 24 months