Pizza Hut Kanbaz System (Final Report)

8/10/2019 Pizza Hut Kanbaz System (Final Report)

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Total Quality Management

Application of Kanban Systemin Hotel Industry

Our efforts on this report are solely dedicated to our loving

and supportive teacher

Submitted By

Group Members: Noman Javed (Group Leader) Bakht Ali Muhammad Faris Syed Hassan Hasan Zaidi Muhammad Shoaib Anwer

Class:

BBA-7B (MOR)Submitted To:

Course Instructor:

Mr. Azhar Nisar, Cdr (R) PNAssistant Professor Bahria University

Submission Date: _______________


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BBA-7B Bahria University

Application of Kanban in Hotel Industry Page 1

ACKNOWLEDGEMENT

In the Name of Allah, the Most Gracious and the Most Merciful, Allpraise and thanks are due to Allah, and peace and blessings be upon His

Messenger.

This Report could not be completed without the blessings of Almighty

Allah, the Omnipotent, and the Most Merciful. Without His Will nothing

in this world is possible. He gave us the strength and the will to strive

for success at every point in life. Even if we praise and thank him a

million times, we would not be able to compensate for that entire He has

given us.

we would also like to express our deepest gratitude to our teacher and

mentor, Mr. Azhar Nisar, Cdr R) P.N, who encouraged us to put in our

utmost efforts in making this report, a milestone in our life. It was a

great learning and enlightening experience for us.


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TABLE OF CONTENTS

Executives Summary 04

Abstract 05

Aims & Objectives 05

Introduction Kanban 06 Origin 06 Kanban Cards 06

o Withdrawal Kanbano Production Kanban

Three bin System 07 Visual Management System 07 Yum & Pizza hut Introduction 08

o P.E.A.R.L.So Mission Statement

Background History 09 Pizza Hut Pakistan 09 Head office 09

Report & Analysis

Part I

Supply Chain Network of Pizza hut 10

Pictorial Supply chain of Pizza hut 12

Ware house 13

Mode of transportation 14

Part II

Kanban System in Pizza hut 15

Pictorial Diagram of Inventory Flow 18 Research design and methodology 19

Conclusion 20

Recommendations20

Comments by the researchers 20

Responsibility & work contribution among the groupMembers 22

Bibliography 23

Questionnaire 23


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REMARKS BY COURSE INSTRUCTOR


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EXECUTIVE SUMMARY

During the past four decades Pizza Hut has built a reputation for excellence thathas earned the respect of consumers and industry experts alike. Building a leadingpizza company has required relentless innovation, commitment to quality and dedication

to customer service and value. The qualities of entrepreneurship, growth and leadershiphave characterized Pizza Huts business through more than four decades of success.Through the strength of its heritage, its culture and its people and franchisees, PizzaHut looks forward to more success in future.

There are different objectives of every organization. In order to achieve theseobjectives different targets are set. Targets pass down the hierarchy depending on thenature of the business. Therefore, in order to achieve the objectives, managementdecides on different strategies. These strategies are divided into many sub-parts andare useful for the running of the business. The employees and the management knowwhat they have to achieve through the targets which have been set to them and the

strategies they have adopted help them know the way they will achieve the objectives.

Pizza Hut has different targets set to them and they have adopted differentstrategies to successfully achieve the targets set. These targets are set by the RSC i.e.the Restaurant Support Centre in Shaheed-e-Millat road Karachi. These targets arepassed on to the RGM (Restaurant General Manager) and he passes them to theworkforce. These targets fall within the organizational structure in which there are manypeople who have different targets to achieve. In order to successfully achieve thetargets they need to co-operate and work in a friendly environment.

Among those strategies Pizza hut is using the three-binand card systemof

Kanban successfully in their restaurants. As Pizza hut has a very strong Supply ChainNetwork which support this strategy (Bin Card System) application in its restaurants.

In whole report we have discussed about the Kanban system in pizza Hut. Inorder to know that how does Pizza Hut manage its inventory; we met with the keyindividuals of Pizza Hut. After Interviewing and visiting their restaurants we came toknow that in pizza hut usually ingredients are perishable which are used in making apizza (core Business activity) so thats why theyare very careful to keep them save inthe cold store room called in-store warehouse where they keep these items. Regardingthe inventory management of pizza hut, it cannot hold large inventory because of risk ofwastage of materials as it holds a large amount of perishable items in their inventory.

Data of customers is stored in the data warehouses of outlets. This data is comefrom the OMS (Order Management System) of DSC (Delivery Support Center) and fromthe restaurants as well. On the basis of this data demand is estimated according to themutual participation of all managers of the different outlets. Then inventory is setaccording to the data and than three-bin system and bin-card system are used in orderto manage the inventory level in pizza hut.


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ABSTRACT

The purpose of our research was to know about the application of Kanban inhotel industry of Pakistan that how organizations in this industry apply the concepts andstrategies of Kanban in their operations. In order to conduct a detailed research and to

further know about the implication of Kanban, we had following Aims & Objectives.

Aims & Objectives

To get knowledge about TQM course.

o How quality is achieved through TQM tactics.

o What measures organizations use for quality control.

To know about Kanban system and its application in hotel industry

o What is Kanban System and how it is implemented in Hotel Industry.

o How firms practically use this strategy (Kanban System)

o To know about the steps taken by hotel industry in order to implement the

Kanban System.

To know which kindof Kanban system is used in Pizza Hut

o To know that either they use Electronic Card System, Three-Bin

System or Visual Management System.

To get knowledge with the help of course instructor about the method of effective

research in todays competitive environment.


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INTRODUCTIONWhat Is Kanban?

OriginThe term Kanbandescribes an embellished wooden or metal sign often

representing atrademark or seal. Kanbanbecame an important part of the Japanesemercantile scene in the 17th century, much like the military banners had been to thesamurai. In the late 1940s, Toyota began studying supermarkets with a view to applyingstore and shelf-stocking techniques to the factory floor, figuring, in a supermarket,customers get what they need, at the needed time, and in the needed amount.Furthermore, the supermarket only stocks what it believes it will sell, and customersonly take what they need because future supply is assured. This led Toyota to view aprocess as a customer of preceding processes, and the preceding processes as a kindof store.1

Kanbanalso spelled Kambanand literally meaning "signboard" or "billboardis aconcept related to lean and just-in-time (JIT) production. According to Taiichi Ohno,the man credited with developing Just-in-time, Kanban is one means through which JITis achieved. Kanban is not an inventory control system. Rather, it is a schedulingsystem that tells you; What to produce When to produce it How much to produce

There are two type of KANBAN system which is given as follows 1: Kanban Card 2: Electronic Kanban System

1. Kanban cardsKanban cardsare a key component of Kanban that utilizes cards to signal the

need to move materials within a manufacturing or production facility or move materialsfrom an outside supplier to the production facility. The Kanban card is, in effect, amessage that signals depletion of product, parts or inventory that when received willtrigger the replenishment of that product, part or inventory. 1

Kanban cards, in keeping with the principles of Kanban, should simply conveythe need for more materials. A red card lying in an empty parts cart would easily conveyto whomever it would concern that more parts are needed. There are two types ofKanban cards which are given as under; Withdrawal KanbanWithdrawal Kanban specifies the kind and quality of product which a manufacturing

should withdraw from the preceding process.

Production KanbanProduction Kanban specifies the kind and quality of product which is the preceding

process must produce.
http://en.wikipedia.org/wiki/Trademarkhttp://en.wikipedia.org/wiki/Taiichi_Ohnohttp://en.wikipedia.org/wiki/Taiichi_Ohnohttp://en.wikipedia.org/wiki/Taiichi_Ohnohttp://en.wikipedia.org/wiki/Taiichi_Ohnohttp://en.wikipedia.org/wiki/Trademark


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2. Electronic Kanban SystemIn the last few years, Electronic Kanban systems, which send Kanban signals

electronically, have become more widespread. Many manufacturers have implementedelectronic Kanban systems. Electronic Kanban systems, or E-Kanban systems, help toeliminate common problems such as manual entry errors and lost cards E-Kanban

systems can be integrated into enterprise resource planning (ERP) systems. IntegratingE-Kanban systems into ERP systems allows for real-time demand signaling across thesupply chain and improved visibility. Data pulled from E-Kanban systems can be usedto optimize inventory levels by better tracking supplier lead and replenishment times. 1

Three-bin system:A simple example of the Kanban system implementation might be a "three-bin

system" for the supplied parts (where there is no in-house manufacturing) one bin onthe factory floor (demand point), one bin in the factory store, and one bin at thesuppliers' store. The bins usually have a removable card that contains the productdetails and other relevant information theKanban card.1

When the bin on the factory floor becomes empty, i.e., there is demand for parts,the empty bin and Kanban cards are returned to the factory store. The factory store thenreplaces the bin on the factory floor with a full bin, which also contains a Kanban card.The factory store then contacts the suppliers store and returns the now -empty bin withits Kanban card. The supplier's inbound product bin with its Kanban card is thendelivered into the factory store completing the final step to the system. Thus the processwill never run out of product and could be described as a loop, providing the exactamount required, with only one spare so there will never be an oversupply. This 'spare'bin allows for the uncertainty in supply, use and transport that are inherent in thesystem. The secret to a good Kanban system is to calculate how many Kanban cards

are required for each product.1

Visual Management System:Visual Managementis a structured approach to ensuring quality, and reducing

waste, throughout your work processes. Visual Management is a structured approach toreducing waste, optimizing productivity and ensuring quality. In this one-day workshopyoull learn visual management techniques for Exposing waste so it can be eliminated and prevented from recurring Making a companys operation standards known to all employees so they can

easily be followed Improving workplace efficiency through organization Visual Solutions &

Improvements can make your processes safer and more efficient. VSI gives youadvice and can help you implement visual management in your company.

By using visual management, VSI can cut your costs drastically. Visual management isvisualizing goals and presenting criteria, describing standard procedures and simpletools to prevent unnecessary errors. This makes it possible for employees to work fasterand/or safer, because they don't need to read manuals anymore.1
http://en.wikipedia.org/wiki/Kanban_cardshttp://en.wikipedia.org/wiki/Kanban_cards


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Something about Pizza Hut

IntroductionYUM (lip-smacking), word is derived from yummy which means delicious &

Tasty. YUM is a Brand name and the objective of this brand in to provide delicious &

tasty food to their worldwide customers and to put a YUM on their customer Face.7Pizza Hut is one of the flagship brands of Yum! Brands, Inc., which also has

KFC, Taco Bell, A&W and Long John Silvers under its umbrella. Pizza Hut is theworlds largest pizza chain with over 12,500 restaurants across 91 countries and hasannual sales around $10 billion.

Pizza Hut is a YUM! Food brand, which means it, has a comprehensivesustainability report that the public can access. Pizza Hut is also in the process ofexploring green building design and has already incorporated some efficient fixtures inits stores. Pizza Hut offers boxes made with some recycled content. Pizza Hut alsooffers some natural ingredients in some of its items. Finally, Pizza Hut is beginning totrack the impact of its supply chain.2

Pizza Hut is known for its Good Quality Food (Hygiene)

Brand Name

Food worth its Price

Good Service

New Kind and Styles of Pizzas in its Menu.

Pizza hut has a very good culture through which they motivate their employees.

They use different training methods i.e. H.W.W.T (How We Win Together) for theiremployee training. H.W.W.T consists of following points:

P.E.A.R.L.S PASSIONfor excellence in doing everything

EXECUTEwith positive energy and urgency

ACCOUNTABLEfor growth in customer satisfaction and profitability

RECOGNIZEthe achievement of others and have fun doing it

LISTENand more importantly, respond to the voice of the customer

Mission StatementWe take pride in making a perfect pizza and providing courteous and helpful

service on time all the time. Every customer says, "I'll be back!" We are the employer ofchoice offering team members opportunities For Growth, Advancement, And RewardingCareers in a Fun, Safe Working Environment.2


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A Brief Back Ground Story of Pizza Hut:

1958: The legacy of Pizza Hut began, when two college-aged brothers fromWichita, Kansas, Frank and Dan Carney opens first Pizza Hut restaurant after

borrowing $600 from their mother.

1959: Pizza Hut is incorporated in Kansas and the first franchise unit opens inTopeka, Kansas.

1968: International market entered with opening of Pizza Hut restaurant in

Canada.

1969: Red roof adopted for restaurants.

1972: Pizza Hut, Inc. listed on New York Stock Exchange under the symbol PIZ.

1977: Pizza Hut, Inc. stockholders overwhelmingly approve merger with

PepsiCo, Inc. for an undisclosed sum.

1986:Delivery service, as a new concept, is initiated

1993: Pizza hut comes to Pakistan with a dine-in restaurant opened in Karachi. 1996: Pizza hut opens a dine-in restaurant in Lahore.

2007: Pizza hut brought out Thick n Thin Pizza and began to re-franchise dine-in

restaurants.

2009: Pizza Hut offering baked fillings in the corner of the pizza.2

Pizza Hut PakistanPakistan has been a big success for pizza hut. It was the 1 stglobal heavy weight

in the food business to venture into the countrys virgin market, and more significantly, itwas the 1stone to survive. Later, when other global food franchises arrived in Pakistan,they assumed that pizza would take a back seat and novelty would take over theconsumers palate. But Pakistani consumers were not done with pizza hut.

Pizza Hut come to Pakistan on December 14, 1993 and took the culinary sceneby surprise. Since then Pizza Hut has 43 restaurants across 11 Major cities, includingKarachi, Lahore, Peshawar, Islamabad, Rawalpindi, Hyderabad, Multan, andFaisalabad amongst others. MSR (Pvt.) LTD Is in the process of opening Pizza Hutrestaurants at many more locations to service a larger customer base across thecountry.

Pizza Hut has set new standards of dine-in restaurants and quick delivery ofoven hot pizzas, and can be considered as a pioneer in starting the trend of franchisesin Pakistan. Pizza hut currently has a work force of approximately 2400 under itsumbrella; making it the biggest employer amongst all the restaurants. 2

Head Office

MCR (Pvt.) LTD, a group of Habib Oil Mills (Pvt.) Ltd, is responsible formaintaining the operations of pizza hut in Pakistan. MCR (Pvt.) LTD Headquartered inShehnaz Arcade, Shaheed-e-Millat road, Karachi, Pakistan.2


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REPORT & ANALYSIS

(Part I)

As we have described the Kanban system in detail and we know that (JIT) just intime is the part of Kanban system or we can achieve JIT by implementing Kanbansystem so in order to get the delivery of material within the time every organizationmakes strong relationship with its suppliers. So pizza hut is also one of them to manageits inventory by applying Kanban system in organization and by building strongrelationship with its supplier. So first of all have a look on supply chain of pizza hut;

Supply Chain Network of Pizza Hut

Supply chain of pizza hut starts from the suppliers of pizza hut. There are directsuppliers and indirect suppliers of Pizza hut. Direct suppliers of Pizza hut are three,

Meat market (K & N Chicken) Vegetable market Sauce companies 4

And all other material like Cutlery, Cold-Drinks, Flour, Buns, Oil Tins, and all

other raw material come from their warehouse named as Commissary(Commissary

means a store that sells food and supplies to the personnel or workers in a military post,

mining camp, lumber camp, or the like.)3

That material is purchased by Commissary means indirect suppliers of Pizza hut are:

Pepsi Company Bake parlor company (Buns) Habib oil Mills (First mineral water)

All direct material is demanded on daily basis and the mode of transportationwhich they used is trucks mostly they are Shezore. On every day end pizza hutmanager forecasts the demand of next day and gives the order to the suppliers thannext day morning the goods come to the Pizza hut. 4

All indirect material i.e. Cutlery, Cold-Drinks, Flour, Buns, Oil Tins, etc ispurchased by the ware house named by Commissary. The material comes fromwarehouse by the trucks on every Wednesday.

Then Pizza hut takes the orders from its customers who come to pizza hut forDine-In and serve them in 17 minutes, and also take the orders for the delivery serviceand Deliver them in 30 minutes. There is a specialized system in pizza hut DeliverySupport Center (DSC) which connects all the 43 outlets of Pakistan with DSC. 4


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Customer Service Representatives (CSR) takes the delivery orders on pizza hutHOT-LINE 111-241-241 and punches that order to the respective outlet. The order listis printed 1 time in three different places of the restaurant, 1stin the kitchen make desk,2ndat the Cashiers Counter, and 3rdat the Managers table than the backing process oforder starts according to the customer requirement. For Din-In they just take 14 minutes

to prepare the pizza and serve it to the customer.

4

They claim that:

If we are unable to serve our customer within 14 minutes than there is no need to paymoney to us

For Delivery order they will take 30-39 minutes (depending on the certaingeographical locations) for delivery at the door steps of customers.

We can also better understand their supply chain network through a pictorialdiagram which is on next page.


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Pictorial Supply Chain of Pizza Hut

Direct Suppliers

(Supplies on Daily Basis)

Restaurants

Ware house

In-Direct Suppliers

(Supplies on Weekly Basis) Wednesday

S-4

Pepsi

Company

S-5

Bake Parlor

Company

(Buns)

S-6

Habib Oil Mills

(First Mineral Water)

Requirements

1)DOUGH 3) TOPPINGS

2)FILLING 4) BAKE CHEESE

Carry Out

&

Delivery

Orders

Take

Away

&

Dine-In

Custome

Commissary

S-1

Meat Market

S-2

Vegetable

market

S-3

Sauce

Companies


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Ware House

The fast food chain recounts its transition from early data mining efforts to aproject where it recovered the costs of software licensing and started generating

revenue. Pizza Huts ware house is situated inBahadurabadfrom where they have gotall the material except direct one. Its ware house is named as Commissary.4

All management programs are built on a data warehouse of millions of customerrecords gleaned from point of sale transactions at its restaurants. They know yourfavorite topping, what you ordered last and whether you like salad with your meat lover'spie. Much of that has to do with data mining, a technology that converts details fromcustomer data into competitive intelligence that companies use to predict trends andbehaviors.4

Pizza Hut uses a product called Teradata Warehouse Miner and after a year

using it to better manage direct mail campaigns, the chain and its parent company, YumBrands (Pizza Hut is one of eight restaurants in the group that includes Kentucky FriedChicken and Taco Bell) are starting to see results.

The chain, which is affiliated with Pepsi Corp., first got into the CRM game byusing the more than 10 years of order history in its database, consisting of all purchasesdelivered to households that ordered by telephone.

Database vendors (i.e. in Pakistan, Millennium Software (Pvt.) LTD) are pushing mininginto the warehouse and they are doing it so companies can exploit all the technology ofdata mining from the database.4

"Pizza Hut is taking advantage of this,"

The added benefits of in-database mining include minimizing data redundancy, reducedproprietary, data structures, simplified data and system management. They said;

"You get better results using a larger amount of detailed data. You eliminate the humanfactor that can lead to potential errors during data movement and samples,"


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Mode of Transportation

They use two types of vehicles for their transportation

Motorcycles Trucks

Motor Cycles

(For Order Delivery Services)

Trucks

(For Materials Transportation from Commissary to Restaurants)


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(Part II)

After discussing the supply chain of the pizza hut now we will describe that howKanban system is applied in the pizza hut for managing the inventory;

Kanban System in Pizza Hut

As we have selected the topic as Kanban System in hotel industry. Hotelindustry is the large & growing industry in Pakistan which creates opportunities fornational or International companies that they invest in this sector; other reason may bethat Pakistani people are very fond of eating delicious food which also createsopportunity for companies to grow in this sector.

That is why we have selected a company from this sector which is Pizza hut.Our target was to check the implication of Kanban System in pizza hut. In order tosearch the information and get the idea that

How the Pizza Hut managers manage its inventory? What is system that they are following in order to manage the inventory?

For this purpose we met with key individuals of pizza hut management. We gotan appointment from the Mr. Shakeel Ahmed who is the Multi Unit Manager at pizzahut delivery support centre. I Noman Javed as a group leader also got an opportunity tomeet with Pizza hut Auditor Mr. Aftab Ahmedwho shared fruitful information relatedto our project. I also visited the pizza hut restaurants located at Bahadurabad (shaheedmillat road) and Muhammad Ali Society Branch in Karachi to see their operations.

On the day of appointment we visited Delivery support center of pizza hut

situated in Shehnaz arcade where we met Mr. Shakeel Ahmed for Interview. We askedfrom Mr. Shakeel Ahmed that

How do you manage inventory? Is there any Kanban System that is applied in pizza hut restaurants?

Then before coming to the main point Mr. Shakeel Ahmed told us someimportant points about their manufacturing system. Actually in pizza hut what happensthat before starting the production process they set a Buffer Ratio means thepercentage of product that could be wasted during a production. They set a buffer ratioof 10% means 10% is the probability of wastage of material or products during a

production.4

Now comes to the Inventory management, when branch manager going to forecastthe demand he or she will keep following factors in his mind.

Useful life of the material (Shelf Life) Lead time (Time From the Commissary to Store) Sales trends (Previous Customer History)


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Suppliers behavior (issues in Transporting Goods to Store)o Late paymento Transportation issues (Strikes or other reasons)

Daily usage (Average Quantity) Product availability (Scare or alternatively available)

Storage Capacity (In-Store Warehouse Capacity)

5

Before going into detail we would like to elaborate some of the important abovementioned points. As we all know that the ingredients which are used in the productionof pizza are mostly perishable items. If they are hold for longer period of time then theycannot be used in the production process. So before ordering of material the useful lifeof material is kept in mind.5

Then inventory is decided on the bases of customers demand. Pizza hut uses thedata ware house System where all the data about the customers is stored. That Datahelps managers in forecasting the demand. Data shows that how much times thecustomers visit a particular outlet in a week and which things are preferred more by acustomers.5

Third main point is the supplier behaviors means whether they can deliver theproducts in time or not. And that our suppliers are capable to provide our raw materialwhen we need it or is any previous balance in remaining on pizza hut related topayment which can create hurdle in supplies of materials. These are the main factorswhich a manager kept in mind regarding the inventory forecasting.5

After this evaluation the manager then set the minimum or maximum level ofinventory that he or she will order for the restaurant. 5

Now we come to the main point that is about managing inventory regarding theKanban system of controlling the inventory. Mr. Aftab Ahmed (Auditor)told us that weare using the old system name as three bin system or they called Bin-Card system.They are using the FIFOmethod in managing the inventory as well. 5

According to that system different compartments of different products are kept in theIn-Store warehouse of the restaurant. There are bin-cardson each container having aspecific type of material. This card has to two columns & multiple rows on it. Onecolumn in heading in Transfer-Inand second column heading is Transfer-Out.5

In pizza hut supervisors are responsible for maintaining the check & balance ofinventory control. There are two supervisors in one store for maintaining this activity. 1 stone is Back Store Supervisor (BSS)responsible for maintaining the inventory of theitems which are used in the kitchen & in production of pizza. 2ndone is the Front StoreSupervisor (FSS)responsible for maintaining the dine-in related inventory activities i.e.management of plates, tables, tissues, goody bags etc. They use the Bin-card systemonly in their core business activity which is pizza production.6


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When the material which comes from the supplier or commissary the Back StoreSupervisor (BSS) will put those things into the container and write in the bin-cardtransfer-in column the amount of material that is added to the previous inventory. Andwhen there is a need of material in the kitchen arise the BSS take that thing from thestore and put it in the kitchen by mentioning the amount of material on the bin-card

transfer-out column. Same process will happen for all the materials.

6

The compartments or containers used in cold storage of in-store warehouse are inblue color. Usually what happens in pizza that demand is based on weekly basis, Outletmanager send the demand to the commissary at least 3 days before Wednesday.Those outlets which are situated in Karachi gets the material from commissary once in aweek but May varies according to the demand. But those outlets which are far fromKarachi i.e. Hyderabad outlet, gets the material in 2 or 3 weeks from the commissarybut it also may varies according to the demand.6

The supervisors visitsin the in-store warehouse for check & balance of inventoryshows the visual management system but on the whole bin-card system is used in pizzahut for inventory management.

Supervisor keeps the data in his register about each type of ingredient which is usedin production of pizza then he add this data in his system software called InventoryManagement System (IMS) which can be checked by the manager afterward. Managerchecks the software report which shows the level of remaining inventory. If the quantityrecorded by the supervisor shows the results below the set point then a red lightemerged. Then manager considers that inventory is going to be finished. So he includesthat material in the list of the existing demand.5

So this is what that whole process pizza hut use in his restaurants for managing

the inventory. But we can better understand this through following pictorial diagram.

Restaurant

Supervisors

Back store

supervisorResponsible for:

Inventory

management

related to pizza

production.

Front store

supervisorResponsible for:

Managing dine-inn

related activities

i.e. management

of plates, goody

bags, etc.


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Pictorial Diagram of Inventory Flow:

(From Supplier to End users)

Commissary:

Following items are comefrom commissary on weekly

basis i.e.

Oil Tins, Flour, Cheese, Breads, Mineral water, Pepsi etc.

External suppliers:

(Direct Suppliers)Following items are

purchased from the direct

suppliers on daily basis i.e.

Fresh Vegetables, Meats (K&N), Sauces, Fruits, Eggs (For Soups)

etc.

Restaurant

(Requirements)

1)DOUGH 3) TOPPINGS

2)FILLING 4) BAKE CHEESE

Take Away

&

Dine-In

Customers

Carry Out

&

Delivery

Orders

Kanban

System

applies in

restaurants

only.

All the

production of

pizzas &

inventory

management

related

activities are

done in

restaurants

All the required

material

supplied by the

commissary &

direct suppliers

to the

restaurants.

Final products

i.e. pizzas,

appetizers,

desserts, etc,

transfer to the

customer.


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RESEARCH DESIGN AND METHODLOGY

Research design is all about how the research is done. We have researched on theapplication of KANBAN in the hotel industry. For the research on the hotel industry wevisited the PIZZAHUT various time. We all know that research design is conducted in

two ways1. Exploratory research2. Conclusive research

In exploratory research we do the primary and secondary research .where as inthe conclusive research we use the statistical approaches. Here we used theexploratory research. Instrumentthat we used to collect the data is

1. Questionnaire

Methods of data collection1. Observation2. Survey (visit)3. Interview

Sources of data collection:1. Primary source: Visit Interview

2. Secondary data: Internet Books

Above all were the methods, source of data collection that we used for theresearch on the KANBAN application in the hotel industry.

More data that we gained about the Kanban application in PIZZAHUT wasthrough the .personal interviews. We visited Pizza hut various time and met with theKey People in the pizza hut i.e. Mr. Shakeel Ahmed (Multi unit Manager), Mr. Aftab

Ahmed (Auditor) & Mr. Illyas Sheikh (Branch Manager).We also gained information about the Kanban from books & internet as well.

When we became completely aware about the Kanban then we visited the PIZZA HUT.During the interview we used the questionnaire that were structured by all us

before interview, but when we started to ask questions we wanted to know more andmore about the Kanban importance in PIZZA HUT. So we asked some unstructuredquestions as well. The question that we asked is attached at the end of the report.

We also get information about Pizza hut from the training manual provided by theabove mentioned people

And further we used the secondary source in order to gain more informationabout the Kanban application in PIZZA HUT. Secondary source were

Internet hunting i.e. Google, Wikipedia, pizza hut website, yum website etc. otherwas the text books through which we become aware about the Kanban.


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CONCLUSION

As we did the research on the application of Kanban in the hotel industry, for thiswe visited Pizza hut, we found that by applying the Kanban application (Bin-CardSystem) they are able to meet the demand of customers in a very effective way and

along with meeting the customers demand they are managing their inventory as well.The flow of material, from supplier to end user, is divided into various parts. Kanban isnot applies in all departments but it is used mainly in restaurant in-store warehouse ofpizza hut. In order to suggest that where it should be applied, we added somerecommendations and from the research we come to the point that bin card system &visual management system( types of Kanban) are used in pizza hut.

RECOMMENDATIONS

As Pizza hut effectively using the old system of Bin-Cards for inventory management in

there restaurants but we recommend them if they use electronic card system they can

grow more than now. They can gain following benefits:

They can reduce waste

Efficiently utilize the resources

Reduce the chances of human error

Reduce the cost

Effective demand estimation

Reduce the lead time

COMMENTS BY GROUP MEMBERS

Noman Javed: (Group Leader)

In the Name of Allah, the Most Gracious and the Most Merciful, I would like to

say that I have learned a lot from this activity. Through this research I come to know the

practical implication of Kanban system that how firms practically applying the concepts

in the real work of life situation.

As a group leader its very difficult task to make the events happens according to

our desires but the instructions provided by the course instructor Mr. Azhar Nisar Cdr.

(R) helps me a lot in managing the group related activities which will not only enhance

my group leading skills but also helps me to learn & write a research report. I have also


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learned the TQM concepts for management which also helps me a lot in the making of

the report. I would like to conclude this report by the following words;

Pizza hut uses old system Kanban i.e. Bin-Card system in its restaurant for

managing the inventory. Although they are utilizing this method very effectively but in

my view if the use advance system of Electronic Kanban in their restaurants, it benefitthem more as compare to the old system.

In the end I would like to say thanks to my course instructor who encourages &

helps us a lot in making of this report.

Bakht Ali

Being a group member I tried my best to do my work according to the instructors

suggestions. Whatever we have done the work in group was so interesting. I personally

enjoyed it. Because this research report required lot of efforts and I examined myself

that how much I am able to work on any project. I learned so many things by working onthis research report. Because earlier we just submitted the reports and we could not get

the information about our mistakes. But this was the first report that showed our

mistakes because of instructors check and balance. I am personally very thankful to the

Mr. Azhar Nisar who gave us such opportunity by which we aware about our

capabilities, mistakes and efforts.

Syed Hassan Hasan Zaidi

It the first time that every member of group put his efforts in the project, because

I have seen that in group it usually happens that most work is done by one individual.As a member of group I got so much knowledge about research and I gained

information about my capabilities and efforts. In the last want to say that I enjoyed my

work and learned a lot and I am very thankful to Mr. Azhar Nisar who assigned us such

a project which required our efforts.

Muhammad Faris

This report helps us to know the practical application of the Kanban system in a

hotel industry. How the Kanban system helps in managing and controlling the inventory

system. Companies which use the Kanban system can avoid the wastage of materials.

It requires committed &involved management. It makes sure that the material will be

available when we actually needed it. The closer the Kanban design meets the needs of

your business environment the more effective the system. But, equally important to the

design of the system is how it is implemented. By using Kanban System Company can

easily determined supply or production according to the actual demand of the


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customers. It is used as a demand signal that immediately propagates through the

supply chain.

After studying TQM helps us how to implement and design a quality policy or

quality assurance in the org. continuous is the key in implementing and achieving the

quality culture in the organization.

If we make the quality product and satisfied the demand of our customers it will

ultimately reduces the cost of the organization. For this to happen company should have

involved and committed management have good relationship with its employers. Quality

management is a key for the success of any org. quality should always come first.

Muhammad Shoaib Anwer

Through research and methodology I learn that Kanban system is very helpful for

inventory management and Kanban play a important role to handle the supply of the

inventory and material which is used to produce finished goods .Kanban system showthe minimum level of inventory and it tell us when we need raw materials or it gives the

signal to management to need of goods and inventory.

TQM, we learn that, Quality is very important for any company and for survival of

any organization and Quality gives satisfaction to consumers.

Recommendation is that the pizza hut used Kanban system as more efficiently

an. Due to this pizza hut can work efficiently in inventory management and it production

process of pizzas.

Responsibility & Work Contribution among the Group Members:

I Noman Javed was responsible for arranging the visit & conducting the interview

from the key individuals of pizza hut. Also responsible for editing of the report.

Shoaib Anwer & Muhammad Faris is responsible for internet hunting to get the

information regarding Kanban system & pizza hut.

Bakht Ali & Syed Hassan Hasan Zaidi is responsible for gathering data from the

interview conducted by Noman Javed & data gathered by the Shoaib Anwer & Faris.

After receiving data their work is to arrange & elaborate data in front of group

members.


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Bibliography

1. www.wikipedia.org (3:45pm Thursday March 24, 2011)

2. www.pizzahut.net.pk (12:30pm Tuesday March 15, 2011)

3. http://dictionary.reference.com/browse/commissary (4:45pm, Wednesday May 11, 2011)4. Multi-unit Manager of pizza hut Deliver support center (DSC), Mr. Shakeel Ahmed.

(3:00pm Tuesday March 29, 2011)

5. Auditor of Pizza hut, Mr. Aftab Ahmed (6:45pm Tuesday May 3, 2011)

6. Branch Manager, Mr. Illyas Sheikh (5:00pm Tuesday May 10, 2011)

7. www.yum.com (3:00pm Wednesday May 13, 2011)

QUESTIONIARE

How KANBAN is applied in PIZZHUT?

KABAN system tell us about the scheduling system that what to produce? Is

scheduling system is applied or not, if yes then how?

Through KANBAN system JIT is achieved, would you implement JIT system or

not, if yes then how?

Is PIZZAHUT utilizing the Kanban card or electronic Kanban system?At what minimum level of material in PIZZAHUT when KANBAN system works or

applied?

If management decide for keeping safety stock then how many KANBAN system

will be needed?

There are two types of KANBAN CARD. Which one PIZZAHUT used?

o With drawl Kanban

o Production Kanban

KANBAN system requires monthly or weekly planning. Would you follow that?

Kanban system is not suited with short production. Then how you handle that?
http://www.wikipedia.org/http://www.pizzahut.net.pk/http://dictionary.reference.com/browse/commissaryhttp://www.yum.com/http://www.yum.com/http://dictionary.reference.com/browse/commissaryhttp://www.pizzahut.net.pk/http://www.wikipedia.org/

Documents

Pizza Hut Kanbaz System (Final Report)