Group4 Logistics Final

8/6/2019 Group4 Logistics Final

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Logistics inHospitalityIndustry

Presented by:

Sachin Baluja (04)

Arpan Banerjee (14)

Kunal Kapila (24)

Meenu Mittal (34) Ankit Shah (44)

Pranshu Soni (54)



Agenda

Logistics in Hospitality industryLogistics in Hospitality industry

Profit Profit Oriented operationsOriented operations

Five star HotelsFive star Hotels

Off shore cateringOff shore catering

RegulationsRegulations



Logistics in Hospitality industry

Indian traditionIndian tradition

Culture, habits, religionCulture, habits, religion

Philosophy of Philosophy of Atithi Atithi DevoDevo BhavaBhava

Despite coming from an orthodox understanding of Despite coming from an orthodox understanding of services in hospitality, India is quickly catching upservices in hospitality, India is quickly catching upthe race and becoming an leader in innovation onthe race and becoming an leader in innovation on

various key frontsvarious key fronts



Logistics in Hospitality industry

Hospitality OperationsHospitality Operations



Logistics in Hospitalityindustry

Examples of CommercialExamples of Commercial -- Profit oriented operationsProfit oriented operations

Hotels and MotelsHotels and Motels

Resorts and LodgesResorts and Lodges

CasinosCasinos

SpasSpas

QuickQuick--Service(Fast Service(Fast-- Food Joint)Food Joint)

TableTable--Service(Full Service) RestaurantsService(Full Service) Restaurants

Food Courts and Snack BarsFood Courts and Snack Bars

Taverns, Lounges and BarsTaverns, Lounges and Bars

CafeteriasCafeterias




Examples of CommercialExamples of Commercial -- Profit oriented operationsProfit oriented operations

BuffetsBuffets

OnOn--Premise CatererPremise Caterer

Off Off--Premise CatererPremise Caterer IceIce--Cream Parlors and StandsCream Parlors and Stands

InIn--Transit Food ServicesTransit Food Services

Convenient Stores/Supermarket/Department Convenient Stores/Supermarket/Department

Stores/Discount stores with Food ServicesStores/Discount stores with Food Services Foodservice companies that work on contract basis that Foodservice companies that work on contract basis that

operate in schools, recreation centers, plants, corporateoperate in schools, recreation centers, plants, corporatebuildings, etc.buildings, etc.




Examples of NonExamples of Non--Commercial Division of HospitalityCommercial Division of HospitalityIndustryIndustry

Employee Feeding OperationsEmployee Feeding Operations

Public Elementary and secondary school food servicesPublic Elementary and secondary school food services Food services for transportation like the meals on theFood services for transportation like the meals on the

wheels programwheels program

HospitalsHospitals

Community CentersCommunity Centers Military InstallationsMilitary Installations

CampsCamps



MCDONALDS

SUPPLY CHAIN



The McDonalds Supply Chain

"Our growth plan for the next three to five"Our growth plan for the next three to fiveyears is more a function of getting our logisticsyears is more a function of getting our logisticsand cold chain right rather than going to far off and cold chain right rather than going to far off

places.places.-- Amit Amit JetiaJetia, managing director, McDonald's India, Mumbai Joint , managing director, McDonald's India, Mumbai Joint

Venture Venture

McDonalds Supply chain is based on the threeMcDonalds Supply chain is based on the three--legged stool concept :legged stool concept : CompanyCompany FranchiseesFranchisees SuppliersSuppliers



LogisticsLogistics 100 sales items in the restaurant 100 sales items in the restaurant 400 SKUs in the warehouse (Hubs: up to 1,500)400 SKUs in the warehouse (Hubs: up to 1,500)

200 restaurants per DC (180 DCs globally)200 restaurants per DC (180 DCs globally) Delivery frequency: 3/wk, higher in urban areasDelivery frequency: 3/wk, higher in urban areas 22--3 stops per route3 stops per route Exclusive distributors (3PL)Exclusive distributors (3PL)

Long term partnerships with service providers,Long term partnerships with service providers,risk sharingrisk sharing





Before first outlet Before first outlet 4 years and Rs 4004 years and Rs 400 crorescroresto setup its supply chain delivery mechanismto setup its supply chain delivery mechanism

McDMcD India has pioneered the cold chainIndia has pioneered the cold chainmanagement systemmanagement system

Efficient supply chain and stateEfficient supply chain and state--of of--art art

technology changed Indian Fast Food Industrytechnology changed Indian Fast Food Industry

Distribution Centers:Distribution Centers: NodiaNodia and Mumbaiand Mumbai 1996 , Bangalore1996 , Bangalore 2004 , Kolkata2004 , Kolkata 20072007



MCDONALD SUPPLIERS



COLD CHAIN Partners

1.1. DynamixDynamix Dairy Industries (Supplier of Cheese)Dairy Industries (Supplier of Cheese)

2.2. TrikayaTrikaya Agriculture (Supplier of Iceberg Lettuce) Agriculture (Supplier of Iceberg Lettuce)

3.3. Vista Processed Foods Pvt. Ltd. (Supplier of Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of productsChicken and Vegetable range of productsincluding Fruit Pies)including Fruit Pies)

4.4. RadhakrishnaRadhakrishna Foodland (Distribution Centres forFoodland (Distribution Centres forDelhi and Mumbai)Delhi and Mumbai)

5.5. Amrit Amrit Food (Supplier of long life UHT Milk andFood (Supplier of long life UHT Milk andMilk Products for Frozen Desserts)Milk Products for Frozen Desserts)



LOCAL

DAIRY

FARM

BULK

COOLING

Cheese,butter,

lactose etc.

REFRIGERA

TED VAN

DYNAMIX DAIRY ±

BARAMATI PUNE

TRIKAYA

FARMS

PRE

COOLING

ROOMS

LARGE

COLD

ROOMS

REFRIGERA

TED VAN

TRIKAYA

AGRICULTURE -

TALEGAON

Chicken &Veg

Processing

Hi-techRefrigeration

Cold StorageRooms

REFRIGERATED VAN

VISTA PROCESSED

FOODS

Homogenized UHT Milk

& Milk Products

QUALITY

CONTROL

REFRIGERA

TED VAN

AMRIT FOODS

Reception of

various

Products

Cold & Dry

Storage

Refrigerated

Trucks

RADHAKRISHNA

FOODLAND



CHALLENGES

Even stronger focus on freshness andEven stronger focus on freshness and qualityquality

OnOn--goinggoing product product innovationsinnovations

StrongStrong customer demand fluctuationscustomer demand fluctuations basedbased ononpromotionspromotions

OrderOrder-- and inventoryand inventory management restaurant management restaurant

DCDC suppliersupplier -- rawraw materialmaterial suppliersupplier

BullBull Whip effect Whip effect



Five Star Hotels

The Hotels should source supplies and ingredients inThe Hotels should source supplies and ingredients inorder to get preferred ingredients to the table in theorder to get preferred ingredients to the table in theright combination which is not easy with globalright combination which is not easy with global

supply chain and perishable food supplies.supply chain and perishable food supplies.

Five Star Hotels Procure throughFive Star Hotels Procure through

Centralized Procurement consortiumCentralized Procurement consortium

Decentralized Procurement ProcessDecentralized Procurement Process

These hotels have invested to computerize andThese hotels have invested to computerize andstreamline their supply chain in order to clamp downstreamline their supply chain in order to clamp down

the costs.the costs.



Advantages of E-Procurement

It will reduce the price on products and servicesIt will reduce the price on products and servicesbecause of volume aggregation.because of volume aggregation.

It will provide real time and immediate access to theIt will provide real time and immediate access to the

market place with an established mass of buyers andmarket place with an established mass of buyers andsuppliers.suppliers.

It will simplify the purchasing process and henceIt will simplify the purchasing process and hencewould increase the savings by providing an orderwould increase the savings by providing an orderprocessing which is automated.processing which is automated.

Customized content and user interfaceCustomized content and user interface

Connectivity to broad range of IT Infrastructure andConnectivity to broad range of IT Infrastructure andERPs.ERPs.



Logistical Challenges

Wage cost is lower but costs for importing foodstuffsWage cost is lower but costs for importing foodstuffsis very high. Hotels have to set up expansive controlis very high. Hotels have to set up expansive controllab where food goes through checks right from right lab where food goes through checks right from right

material storage, cooking to serving.material storage, cooking to serving.

Some of the raw material which were availableSome of the raw material which were availableearlier, now become scarce due to export e.g.earlier, now become scarce due to export e.g.Kashmir Apples, Alphorns Mango, Kerala Prawns.Kashmir Apples, Alphorns Mango, Kerala Prawns.

Import of specialized fish, meat and poultryImport of specialized fish, meat and poultryproducts.products.



Five Star Hotels - In Flight Catering Services

In Flight caterers consists of kitchens andIn Flight caterers consists of kitchens andwarehouses as close to airports.warehouses as close to airports.

They hold up to four days of raw materials asThey hold up to four days of raw materials as

inventory.inventory. The material is brought in, inspected and washed inThe material is brought in, inspected and washed in

mineral water and then refrigerated.mineral water and then refrigerated.

The process of unfreezing, chopping, cutting,The process of unfreezing, chopping, cutting,

preparing starts with 24 hour lead time.preparing starts with 24 hour lead time. 6 hours before any flight there is a visibility on the6 hours before any flight there is a visibility on the

count of meals.count of meals.

The meals will be ready before 5 hours and poppedThe meals will be ready before 5 hours and poppedin the freezer.in the freezer.



In Flight Catering(Cntd.)

The food is delivered before 2 hours of flight The food is delivered before 2 hours of flight departure for an originating flight.departure for an originating flight.

For return flight turnaround time is tighterFor return flight turnaround time is tighter thethe

caterer will clean the gallery and deliver of mealscaterer will clean the gallery and deliver of mealswithin 30within 30-- 45 minutes post landing.45 minutes post landing.

The flight meals are delivered at below 5 centigradeThe flight meals are delivered at below 5 centigradeafter packing it in aluminum foil or plastic film; hot after packing it in aluminum foil or plastic film; hot meals are flashmeals are flash-- frozen to minimize cases of bacterialfrozen to minimize cases of bacterialinfection.infection.

The food and beverage are loaded into airlineThe food and beverage are loaded into airlinetrolleys and delivered in refrigerated hitrolleys and delivered in refrigerated hi--loader trucks.loader trucks.Food is considered delivered only after it is loadedFood is considered delivered only after it is loaded

and tallied by cabin crew.and tallied by cabin crew.



In Flight Catering(Cntd.)



Logistical Challenges

Caterers should not be root cause of delay of flightsCaterers should not be root cause of delay of flightsowing to late delivery of food.owing to late delivery of food.

Should not be cause of an in flight food poisoningShould not be cause of an in flight food poisoning

incident.incident. Caterer has to prepare large no of meals and theyCaterer has to prepare large no of meals and they

cant offer same meal day in and day out. The menucant offer same meal day in and day out. The menuis decided by Airline chefs .e.g. Kingfisher hasis decided by Airline chefs .e.g. Kingfisher hasexhaustive list of 200 menus which they keep onexhaustive list of 200 menus which they keep onrotating on different routes and in different cycles.rotating on different routes and in different cycles.

Margins are low as compared to other hospitalityMargins are low as compared to other hospitalityindustry and capital investments are high.industry and capital investments are high.



Mass Customization In-Flight Catering

Mass customization includes lean production, JITMass customization includes lean production, JITinventory, flexible working hours, modularity andinventory, flexible working hours, modularity andagile manufacturing. Flight Kitchen requires MCagile manufacturing. Flight Kitchen requires MC

because of their high daily output, variety betweenbecause of their high daily output, variety betweenairlines, seat classes and products. The uses MCairlines, seat classes and products. The uses MC

Relies heavily on forecastingRelies heavily on forecasting

Last minute changes in schedules and menusLast minute changes in schedules and menus

Common ingredients to manage wide variety of Common ingredients to manage wide variety of menusmenus

Mix of contract Labor and permanent staff.Mix of contract Labor and permanent staff.



Offshore Catering

Complete Custom CateringComplete Custom Catering

Full serviced ,licensed and insured bartendingFull serviced ,licensed and insured bartending

Professional service staff Professional service staff

Equipment like glassware, china, linens, tables, chairs andEquipment like glassware, china, linens, tables, chairs andother items.other items.

Entertainment which includes DJs, Live bands, danceEntertainment which includes DJs, Live bands, danceperformersperformers

Tenting, Staging and lightingTenting, Staging and lighting

Event GraphicsEvent Graphics



Logistical Challenges faced inOffshore Catering

They have to provide quality catering services keeping inThey have to provide quality catering services keeping inmind cost pressures.mind cost pressures.

They have to hire highly qualified and experienced staff.They have to hire highly qualified and experienced staff.

They should be able to satisfy diverse culture need inThey should be able to satisfy diverse culture need intough environment(e.g. Sea)tough environment(e.g. Sea)

Flexibility is of paramount importance in terms of size orFlexibility is of paramount importance in terms of size ornature of clients operations.nature of clients operations.



Regulations

Government of India has changed Quarantine rule .Under that Government of India has changed Quarantine rule .Under that there is a need to individually certify each item of import.there is a need to individually certify each item of import.Earlier Hotels and Restaurants placed an order with theEarlier Hotels and Restaurants placed an order with theinternational suppliers who would cart a refrigerated containerinternational suppliers who would cart a refrigerated container

and put all the supplies in the containers and hotel can obtain aand put all the supplies in the containers and hotel can obtain asingle quarantine certificate for that.single quarantine certificate for that.

But with the new changes, Hotels have to import individualBut with the new changes, Hotels have to import individualitem separately. For this Hotels rely on consolidators whoitem separately. For this Hotels rely on consolidators whoimport for several customers, get them certified and store inimport for several customers, get them certified and store in

their warehouses.their warehouses. Restaurant serving undercooked meat, such as rare steaks orRestaurant serving undercooked meat, such as rare steaks or

hamburgers, must post relevant details of the health riskshamburgers, must post relevant details of the health risksinvolved with eating it in a prominent area, such as on theinvolved with eating it in a prominent area, such as on themenu.menu.



Regulations (Cntd.)

There are many government agencies in a country like FDAThere are many government agencies in a country like FDA US food & drug administration and USADUS food & drug administration and USAD-- US department of US department of agriculture who ensure that the food which people eat is safeagriculture who ensure that the food which people eat is safeand does not have any harmful additives.and does not have any harmful additives.

The food products need to be labeled correctly and now someThe food products need to be labeled correctly and now somecountries have even issued strict guidelines for advertisementscountries have even issued strict guidelines for advertisementsof various products.of various products.

HACCPHACCP hazard analysis and critical control point is beinghazard analysis and critical control point is being

implemented by FDA and USDA in order to standardize theimplemented by FDA and USDA in order to standardize thepractices in food quality and safety.practices in food quality and safety.

US Bioterrorism act made in 2002 requires the tracking of theUS Bioterrorism act made in 2002 requires the tracking of thesource of raw materials and also the destination customer of source of raw materials and also the destination customer of

the goods.the goods.



Thank YouThank You

Group4 Logistics Final

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