What can Dominos Pizza Teach us About Supply Chain Visibility?

Last weekend we had some friends over to visit our house and rather than cooking we decided to place an order for pizza delivery from…

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May 16, 20085 minute read

supply chain visibility

Last weekend we had some friends over to visit our house and rather than cooking we decided to place an order for pizza delivery from Dominos. Ordering a pizza today is amazingly convenient. We didn’t even have to pick up the phone. Instead we placed the pizza delivery order online using the Dominos web site and a credit card.

The fact that you can order a pizza online should probably come as little surprise in today’s increasingly Internet-centric world. What did surprise me, however, was the new Domino’s Pizza Tracker site that provides you a step-by-step update on the status of your order.

Using the phone number that you used to place the order you can login to a graphical interface that monitors the progress of your delivery. The web site also displays the street address of your delivery, the complete contents of your purchase and the exact time of your order.

The tracker shows five different steps throughout the food preparation and delivery process:

  1. Order placement
  2. Food preparation
  3. Baking
  4. Boxing and packaging
  5. Delivery en route

My tracker even told me the name of the driver who was coming to our house! All that was missing was a link to the driver’s MySpace page so you could learn more about he or she before they arrived….

Dominos launched this new tracker service on January 30th. I am not sure exactly how it works, but the system somehow ties the local operations systems in each store to the B2C web site on a real time basis. One thing I will bet on is that it doesn’t use RFID.

The tracker site is one of the more customer friendly web experiences that I have seen in recent years. In fact, there is even a survey that consumers can fill out after the delivery to comment on their experience. So as I ate my pizza I started thinking about the idea of providing customers real time visibility into the status of their orders. And I began to relate this to some of the customer visits I have conducted recently with multi-national corporations in the automotive, high tech and retail industries.

One thing that I am consistently surprised by is how little visibility many of the largest companies have to inventory moving through their supply chains. Most of the order management portals large manufacturers provide their customers don’t come anywhere close to the supply chain visibility that Dominos offers its consumers.

So I ask you – if the average Dominos franchise with an employee base of 10 and annual revenues of $580K can notify me of the exact time that a pizza is boxed and taken out the door for delivery, why can’t a multi-billion dollar manufacturer of airplane parts be able to tell their customers when a $50M shipment of goods has arrived at a port and cleared US customs?

The good news is that many manufacturing leaders seem to be recognizing the challenges associated with lack of supply chain visibility. We have seen a recent surge in interest amongst large manufacturers seeking to provide their key distributors and customers with better visibility to outbound shipments. The highest concentration of demand seems to be with industrial goods manufacturers who are seeking better quality data on ocean freight traversing long distance trans-Pacific routes.

Consumer products companies are slightly ahead of their peers in the automotive, high tech, aerospace and industrial machinery sectors when it comes to supply chain visibility. In the industrial sector, it is not uncommon to find that neither buyer nor supplier has visibility to the location and status of shipments of goods once they leave the manufacturing plant.

Interestingly, this situation applies even to high value goods including consumer electronics such as high definition plasma televisions, kitchen appliances such as refrigerators and computing equipment such as robotic tape backup libraries. Not only are these expensive goods targets for theft and counterfeiting, but many of them can be easily damaged without proper handling.

Due to the value of the goods, suppliers often purchase cargo insurance to protect against these types of threats. Also due to the value of the goods, many suppliers seek out third party financing for their inventory in transit. The financing frees up working capital that would otherwise be tied up in long distance supply chains.

So the point here is that we have multi-million dollar shipments of industrial goods insured and financed by third parties and no one other than the transportation provider holding the actual inventory seems to know the location at any point in time.

Should industrial manufacturers hire pizza delivery persons to help them?  That is probably unnecessary. But they should consider investing further in transportation management applications, particularly in logistics visibility suites that offer customers insights into the status of inbound freight.

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