Cici’s Pizza Research Paper Essay

Introduction â€Å"Hi, welcome to CiCi’s! † This is the warm greeting that every CiCi’s employee will welcome every customer with when they walk through the door. This warm welcome is just one of the many things that CiCi’s does to exceed the customer service expectations that come with a buffet style restaurant. With competition lurking, and the economy pinching, great customer service has become a premium. This is why CiCi’s focuses so much on the customer’s wants and needs. The mission statement is as follows: Do â€Å"Whatever it Takes† to exceed each guest’s expectations. Background CiCi’s Enterprise is an American style buffet restaurant chain based in Coppell, Texas. There are approximately 600 franchised and corporately owned restaurants in 35 states. The company was founded in 1985 in Plano, Texas by Joe Croce and Mike Cole. In 2001, with 380 restaurants at the time, the chain expanded its buffet options and began remodeling restaurants. Four years later, CiCi’s had more than 500 locations, and was the fastest growing pizzeria in the United States. In 2003 Croce retired from the business, and passed ownership of the company to Craig Moore, a general manager in Dallas. Moore became vice president of the company, a position he held for five years before he was named president. As president of the chain, Moore oversaw the company’s operations and franchise growth, eventually announcing his retirement in 2009, after 17 years with the company. Michael Shumsky took over after Moore retired in late 2009. He had previously served as CEO of La Madeleine Restaurant, Inc. In addition to its current 600 restaurants, in 2010 CiCi’s announced plans to add another 500 restaurants in the next 10 years. CiCi’s has won numerous awards and has also been named one of the top 25 performing brands by The Wall Street Journal and a top 200 franchise concept by Franchise Today (CiCi’s Pizza, 2011). Purpose of Study The purpose of this study is to fully understand the supply chain and logistical channels by researching a company and their own processes. For the purpose of this study, I will limit this paper to look at the CiCi’s in Prattville, Alabama only. Also I will limit this to follow only pizza products through the logistics channel. Environmental Analysis SWOT The strengths of CiCi’s pizza make it one of the best in the industry. It offers a unique buffet experience with so many pizza varieties. Most of the competition in the industry only offers one style of pizza with one price, but at CiCi’s you can get up to 20 different varieties with one low price. If you don’t want to sit in the family oriented restaurant with the best customer service and eat then you have the option to order take out. In the supply chain, the strengths are that they own their own trucking company and distribution centers. With all these strengths under their name it is no wonder that CiCi’s is the 9th largest pizza chain in the United States. (Pizza Franchise Report 2011, 2011) The owner Michael Shumsky is not satisfied with the title 9th largest pizza chain in the US. The weaknesses of CiCi’s are that they have no delivery services while the other top competitors do. Also, because the price is so low, there can be a perception of low prices = low quality. The one other thing that is holding CiCi’s back from being in the top five is that there is 15 states in the US that so not have a CiCi’s in them. Simply put, there needs to be more franchises build in order for this company to rise to the top of the list. (JMC Restaurant Distribution INC. , 2011) One common quality of successful franchise owners is that all a weakness shows is that there are opportunities. CiCi’s can offer delivery services in order to make their customer service that much better. Also in order to make the company name and logo as popular as the top companies it needs to expand into the rest of the United States and have at least one restaurant in every state. Last, because CiCi’s is in the top ten of the industry, there are threats that come with that title, because there are many other business that are close behind them that what to take their spot. The Mellow Mushroom is a pizza buffet that is less than a mile from the CiCi’s in Prattville, AL. Mellow Mushroom offers similar services but at a higher price. One advantage that the Mellow Mushroom has is that is looks a little more elegant and upper class. People who are looking for more formal dinner experience would be likely to go to Mellow Mushroom. Another threat for the CiCi’s in Prattville, Al is that it is in a place where there are many food options available. Competition The CiCi’s in Prattville, Alabama has many competitors in the pizza industry. This creates a highly competitive market, which is good for the customer because that means that the customer service will be top notch. The competitors include: Domino’s, Pizza Hut, Hungry Howie’s, Papa John’s, Little Caesar’s, Marco’s, Pasta Pizzeria & Grill, and Mellow Mushroom. All these companies are within a 20 mile radius. In a lucrative market like the pizza one, the more competitors the better the customer service because it is so competitive. Market Analysis The pizza market can be very lucrative, therefore it is very competitive. There are low barriers to entry for this market because there is not a perfect way to make a pizza, so there is a lot of room for different types and different restaurants. CiCi’s has established itself as a top competitor in this market. The pizza segment of the food industry represents 11. 7% of all restaurants and accounts for more than 10% of all foodservice sales (Pizza Franchise Report 2011, 2011). Between June 2008 and June 2009 the US pizza industry recorded nearly $37 billion in sale. According to â€Å"Pizza Power†, PMQ magazine’s (Pizza Marketing Quarterly) Annual Industry Analysis, of the 67,554 pizza stores in the US, 59% are independently owned and control 51% of total pizza sales. Franchises and chains account for 41% of the market and for nearly half the sales. The following pie charts were sourced from PMQ’s 2009 annual industry analysis and depict the breakdown of pizza stores in the US and a breakdown of US pizza sales (Pizza Franchise Report 2011, 2011). CiCi’s pizza is included into the other top chains 15%. The pizza industry experienced a loss of market share and sales during the recession as skyrocketing cheese prices and an increase in the cost of wheat and other pizza essentials drove up the cost of pizza. Customer Analysis Pizza is enjoyed by people from all walks of life and eating out at restaurants is an essential part of the American lifestyle. According to the National Restaurant Association, 45% of adults say that restaurants are still a major part of their lifestyle and that they will continue to frequent their favorite restaurants. According to a survey completed by Mintel, 93% of Americans eat at least one pizza per month and 21% of 18 – 24 year olds purchase pizza more than three times per month. This is compared to only 7% of those aged over 65 eating at least one pizza per month. Pizza also proved popular with parents. About 20% of the parents surveyed said that they purchase pizza more than three times per month, compared to 12% of adults with no children (Pizza Franchise Report 2011, 2011). This customer group covers much of the target market for CiCi’s pizza. Because so many age groups love pizza, there are many target markets for pizza places to target. These customers look for more than just a good tasting pizza now, they look for a place with good deals and even better customer service. Supply Chain Activities CiCi’s, like many other businesses has a busy season. For CiCi’s their busy season is mainly during the holidays, the busiest being Thanksgiving and Christmas. For these special times of the year they need to forecast just how much more products they need in order to keep the customers satisfied. The forecasting is done by looking at the previous year’s sales during that particular time period; in addition, if there is any national media at that time. They take the dollar usage per item and multiply that by the projected sales to give them how much to order of each item; the items being flour, sauce, and pizza toppings (Hassell, 2011). Demand Forecasting cannot be done before there is a proper count of the inventory. Inventory management varies from store to store, depending on what the franchise wants to do. Most stores count inventory every Sunday night or Monday morning. The CiCi’s in Prattville counts inventory on Sunday nights. To manage the inventory they have a food cost program that you enter the ending count; the computer downloads the order and uses the previous count as the beginning. The company as a whole tries to keep food cost percentages at 28% or lower, with labor cost of 18. 5% or lower (Hassell, 2011). Once the forecasting is done, then it is time to place the order. CiCi’s uses an online order management system called ESOS (Exhibition & Sponsorship Ordering System). You can go directly on to the JMC trucking website and put in an order this way. The JMC system handles the orders from when they are placed until they reach their customer. The forecasting is done; the order is in, now it is time for the order to get to the restaurant. This is where CiCi’s takes a big leap from its competition, because of its transportation system. CiCi’s has become such a powerful force in the pizza industry partly because of attention to detail in the transportation channel. They own their own transportation service. JMC restaurant distribution Inc. is a full service distribution company founded by Joe Croce in 1990, after he found out that other distributors were not able to keep pace with his vision of great service, low prices and â€Å"whatever it takes† attitude. Today JMC serves over 600 restaurants in 35 states out of three distribution centers strategically located in Dallas, TX, Atlanta, GA and Richmond, IN. The opening of a fourth center is in the making in Arizona. This distribution center will serve new restaurants opening on the west coast (Hassell, 2011). JMC has a well maintained fleet of over 70 power units with 48†² or 52†² refrigerated trailers (some with lift gates), run consistent routes each week to CiCi’s restaurants, and return to our Dallas, Atlanta and Richmond, Indiana bases carrying freight for ourselves and others under JMC authority. JMC brings the same dedication to great prices and great service to its freight customers as it does to its restaurant customers. To date, JMC has served over 1500 freight customers handling a wide array of dry, refrigerated and frozen products throughout the United States (JMC Restaurant Distribution INC. , 2011). Just as important as the forward movement of goods, is the reverse movement. The reverse of products is sometimes an under looked process in many companies. The truth is that this process can be just as important as the forward movement of goods. CiCi’s does have a reverse process for damaged or broken products. For example, if a bag of flour that comes off the truck has a hole in it or it is leaking, there is a chance that it is contaminated so they throw the bag away. To compensate for the loss of the bag the receiving store will get one free bag of flour they next week when the truck comes in (Hassell, 2011). When the delivery truck comes to CiCi’s, carrying this week’s supply, it is the driver’s responsibility to unload the truck. The employees at the restaurant do not help with unloading. It takes about 45 minutes to completely get all the products off the truck and into the store (Hassell, 2011). Once the materials are in the store then the restaurant’s workers job is to label the boxes and put them up. The labeling and packaging of the boxes is not that importance in the CiCi’s supply chain, because the customer of the restaurant does not see what the bags of flour look like or how the pepperoni is packaged. What is important in the packaging is that the packages be able to withstand certain temperatures and weights because most of the trucks are refrigerated and carry lots of other products. Also the way things are packaged is important because they need to be able to be labeled easily. Damaged packages will be directed right back to the JMC in the reverse process. With the forward and reverse of all these products, transportation can get pretty expensive. The facility locations are very important because of this. CiCi’s has a total of three distribution facilities that are strategically placed. The biggest of the three facilities is the one in Dallas, TX. This facility covers all the states shaded in red in the picture below. Second largest facility is the one in Atlanta, GA. This one covers the states shaded in yellow. (JMC Restaurant Distribution INC. , 2011) That is where the CiCi’s in Prattville Alabama gets all of its products. Last, the states shaded in blue are handled by the facility in Richmond, IN. All the facility locations were made with the main roads, possible traffic, and distance in mind. Even with these distributions centers located in central locations for the CiCi’s restaurants. The procurement process does not have influence on the locations, because the raw materials come from all over, they receive bids on their products and JMC makes the decision based upon the quality of that product and the other ones. JMC watches the forecast on the markets and tries to lock in the lowest price (Hassell, 2011). As stated previously, the pizza industry is extremely competitive, and with his competitive market, customer service is a premium. â€Å"Hi, welcome to CiCi’s! † is the phrase that every employee must memorize and say to every customer that comes into the restaurant. Customer service is a component that this company really focuses on. On the website they have a list of guest promises that they stand by. They are as follows: to do â€Å"whatever it takes† to exceed your expectations, to say â€Å"Hi, welcome to CiCi’s, to guarantee you a full-hot-fresh buffet, and to use our names to make you favorite pizza, to serve you in a fun, sparkling clean restaurant, and to say â€Å"goodbye, come back and see us (CiCi’s Pizza). The pizza industry is so competitive that the best way to get new customers and keep the loyal customers is to have the best customer service around. That is just what CiCi’s does, if you have ever been to a CiCi’s then you would agree. Recommendations Pizza is very much part of the American way of life, with Americans eating approximately 100 acres of pizza each day, or 350 slices per second. Although the pizza industry experienced a decrease in sales during the recession, the beginning of 2011 has seen an increase in sales. The development and implementation of new technology and marketing strategies has enabled the pizza industry to adapt to growing consumer demands for cheap, fast, and convenient products. CiCi’s has done a good job establishing itself as a top competitor in this market. In order for CiCi’s to compete with the top pizza franchises in the market, such as Pizza Hut, they need to get more creative. CiCi’s needs to increase their marketing budget, this would create more awareness to their target customers and increase sales. CiCi’s need to become a household name and in order to do that there needs to be more franchises. Currently CiCi’s only has restaurants in 37 states. If they were to expand into all 50 states and increase their marketing then I believe the CiCi’s would be the best pizza franchise in the United States. Conclusion After all, the â€Å"do whatever it takes to exceed the guest’s expectations† is a great mission statement that CiCi’s defiantly goes by. This great company has expanded from one restaurant in Plano, Texas to over 600 in 35 states in 25 years. That is a great accomplishment, and they are not done yet. With a plan to build more restaurants in the future, you can expect to see CiCi’s at the top of the pizza industry very soon. The supply chain management is one of the best in the industry because they own part of their supply chain. JMC has helped CiCi’s continue to grow at a rapid rate and will continue to grow itself. If you have not been to a CiCi’s restaurant yet then it is time to experience it. References CiCi’s Pizza. (2011, November 7). Retrieved November 30, 2011, from wikipedia. com: http://en. wikipedia.org/wiki/CiCi’s_Pizza JMC Restaurant Distribution INC. (2011). Retrieved November 8, 2011, from cicistrucking. com: http://cicistrucking. com/about_jmc. html Pizza Franchise Report 2011. (2011). Retrieved November 24, 2011, from Franchisedirect. com: http://www. franchisedirect. com/foodfranchises/pizzafranchises/pizzafranchiseindustryreport20111/80/292#Ref1 CiCi’s Pizza. (n. d. ). Retrieved November 26, 2011, from Welcome to CiCi’s Pizza: http://www. cicispizza. com/_template. php#Scene_1 Hassell, M. (2011, November 12). Regional Manager. (J. Montgomery, Interviewer).