Tony\'s Pizza has had problems lately. Most clients complain that they have to w
ID: 385746 • Letter: T
Question
Tony's Pizza has had problems lately. Most clients complain that they have to wait too long time until they receive the pizza they have ordered. Tony, the owner and cook of Tony's Pizza, thinks that this has to do with the preparation and delivery process and wants to explore possibilities to extend his business online.
Tony's Pizza is currently organized as a take-out/ delivery restaurant. Tony's Pizza has two other employees: a cashier, and a delivery guy. The process starts when a client calls the Tony's Pizza’s telephone number. The cashier takes the order and the delivery address and gives it to the Tony. Tony checks the order and decides which ingredients he needs for preparing the ordered pizzas. Tony's Pizza can deliver 25 different sorts of pizza, which are divided into two categories: standard pizzas and special pizzas. For the standard pizza types all ingredients are available in the kitchen. Some of the ingredients (e.g., sea-food) for the special pizzas need refrigeration and are kept in the storage room, so Tony has to pick them up first. When all ingredients are available Tony prepares the ordered pizzas and bakes them. Unfortunately, the oven is quite old and sometimes the temperature in the oven rises to the level that pizzas get burned. In that case Tony must repeat the whole procedure starting from the selection of ingredients.
When the pizzas in one order are ready, Tony gives them to the cashier, which puts them in boxes and hands them over to the delivery guy along with the delivery address. The delivery guy is also supposed to collect the money for the order and give it to the cashier upon return. The cashier puts the money in the cash register. Alternatively, if the client is ordering the pizza in person, the cashier gives the pizza directly to the client and cashes the money for it.
Another task Tony must take care of is replenishment. Some of the ingredients must be replenished daily and others weekly. Tony has to check all stocks and place orders at his regular suppliers when the stock levels are low. This is an activity he is taking care off at the end of each day. He makes a list with all necessary supplies and puts it next to the cash register such that the cashier can order them by phone in the beginning of the next business day.
The assignment is to:
Discuss Tony's Pizza’s current supply chain from raw material to final product.
Come up with a change proposal for a possible extension of the business online, in which some parts of the current processes could be outsourced to other companies and the main goal would be to eliminate inefficiencies in the current processes, and finally
Explain what consequences (in terms of differences between the current and future situation) this proposal may have with respect to the automation of some parts of the current processes by means of information systems (this is called a gap-analysis).
Explanation / Answer
Supply chain analysis:
Supply chain of Tony pizza is highly complicated and least efficient. This is because single person is assigned for multiple task which increases lead time to cook food and wait time for customers to place order and collect delivery.
Tony is over burdened with cooking, organizing ingredients and maintaining inventory. Cashier is burdened with taking order, packing order and collecting cash. The overall set up is not scalable and hence require modification.
Extension of business online:
One of the bottleneck in current process is order taking process. Here single cashier has to take order from customers waiting outside and telephone. Which means waiting time for customer to place order is high. This can be eliminated by building app and website to place the order. This reduces wait time as multiple customers can place the order at a time.
This also reduces work load of cashier as he is also burdened with packing of pizza and collecting cash (Both from delivery boy and customer). By building app and website with payment gateways, workload on cashier might be further reduced. This reduces bottle neck in the system and improves service quality.
Tony can also outsource delivery process by involving third party. By building information system, order details of customer can be shared in real time with third party. This helps third party to plan the last mile delivery. This further reduces wait time for customer as tony has only one delivery person who is burdened with orders.
Tony can also buy ERP system to maintain inventory. ERP system helps in maintaining inventory and has option to share inventory details with supplier. This helps in reducing burden of maintaining inventory.
Consequences of Automation: