Ask Me Anything AMA with Sandeep Sharma

All right, for those who are with us earlier before the official time where we start, just don't go anywhere. We're going to give ourselves another 2 or 3 more minutes so then everybody can join and be with us. So just hold on. Thank you. If you're just joining us for this AMA, just hold on. We're gonna wait Maybe another 1 or 2 more minutes so we have all the group joining, and then we can get started. So give us just 1 more minute. Thank you. All right, all right. So thank you very much for again joining this new session organized by the Global Supply Chain Council. So as you know, this is the Ask Me Anything session. We've done one a few weeks ago, and we're very pleased again to do this again with our guest today, Sandeep Kumar Sharma. Hi Sandeep, how are you?

Good afternoon, Max, and everyone. I'm good, I'm perfectly fine, and I hope you guys are good.

So Sandeep is, uh, he's going to tell us a bit more about— he's currently the Director of Group Procurement and International Market Supply Chain at Domino's Pizza, which is part of Alamar Foods. So, uh, we're gonna— so let me explain to you how we're gonna do this. Sandeep is going to introduce himself first, and we have one or two questions just to kickstart the discussion. But again, this AMA session is very much for you to ask questions to Sandeep. So if you have— I noticed already that there was a couple of questions being posted on the event page. If you are attending, if you posted those questions on the event page, feel free to bring them back and post them again Otherwise, we will use them and just post and ask Sandeep in the middle of the discussion. This is again the chance for you to interact with Sandeep. So if you want to ask a question, you can click on the Q&A button, which is located at the bottom right of your screen. Don't use the chat. The chat is more for a casual chitchat. We try to keep all those questions in the Q&A. So again, click on the Q&A. button on the bottom right of your screen, and then we will take those questions as they come. So without further ado, I'd like to get you, Sandeep, first to maybe just tell us very quickly who you are, and maybe, maybe we'll get started with, you know, the entire career that you had, and you had a very extensive career. Maybe we'll start with, you know, where did you study and what was your first job and how did you actually get started in supply chain?

Thank you, Max, and thank you for inviting me for this great event. I hope all the audience gets some productivity in terms of, you know, the experience and what's happening across. So just to start with, I'm basically an industrial engineer. When I started all the way like 1996, there was no concept of supply chain in India. I was in India at that point of time, and supply chain was extremely fragmented into purchase and procurements and planning, transportation, and all these kind of things. So I started like as an engineer. In the initial part of my life, I have been hardcore mechanical maintenance. I, I work for cement plants, I work for COSRX Cosmetics, I've worked for MLM, which is the multi-level marketing companies. Okay, I worked for all of them till I started my supply chain career with one of the company, not in the whole supply chain. I used to take care of the customer service and the planning part of it, but that company was into a packaging material which was linked basically to the biggies like Nestlé and Pepsi. So then you get into a churn of supply chain in terms of actually how it happens, how the offers comes in, how they plan the manufacturing, their S&OPs and everything. And, and a minuscule part of my supply chain started from that point of view. And, uh, after that, I, I did a bit of some courses on supply chain in terms of evening classes and everything, to an extent, but not much. But recently I am doing, uh, the Transformational AI Executive Program from Indian School of Business, ISB.

Okay, great.

So that's in a nutshell. I hope you know I've covered everything.

Of course. What is your current role at Domino's? Can you maybe tell us a little bit more about your current responsibilities, the type of processes that you're covering, the countries that you are also in charge of? Just take us through very quickly of you in your current position here.

Thank you. So Max, I take care of the whole territory of MENAP, which is Middle East, North Africa, Pakistan, A total of 12 markets including GCC, Levant, North Africa, and Pakistan. So, uh, and I covered the whole amount of around 800 outlets of Domino's across the region. Okay, I'm basically responsible for group procurement in terms of core and non-core product commodities. Uh, we do a lot of global imports, uh, global supply chains, supply chain strategy, contingency planning. Supply chain digitization now. Okay, and, uh, and I take care of the end-to-end supply chain, and I've got teams under me which has got fragmented into different parts of planning, transportation, distribution, procurement. But we, we are a very lean organization, and we have never tried to broaden out. We had tried to change the processes, make it more digitized. So literally across 12 markets directly reporting to me are 12 people only, nothing else.

Wow, okay.

So, so we just run with very lean organization and we do our own manufacturing in terms of the dough and the product, which is like very, very short shelf lives, and balance all. And, and we are from— we are in the countries where the imports are very high because of these countries don't have any kind of their own farming and all these kind of things. So, so that's why the global Global supply chain is extremely important.

So you're looking at also our logistics and distribution?

Absolutely, absolutely. That's why I say supply chain international market.

So, okay. And so you work with 3PLs, I guess, or are you— part of your logistics is in-house?

So we have 12 markets, and Max, our 12 markets are very different. So we may be working with 10 models in 12 markets. Because the markets— and, and we work on very flexible, agile, and resilient models so that we can change it very fast. In last 6 years of my career in Domino's, we must have changed the models 4 times minimum because the situations has been like that, and the number of dynamic changes from 2020 onwards has been very, very high. So we can talk in details in the later of the call.

Yeah, yeah. So in your early career that you had at Barista or Sweets, one of the things that you've done which are still very relevant today, maybe if you could think about strategies or innovation or certain techniques that you've learned in the early part of your career which are still very valid today in your current role.

I think so. Everything you learn out of your career is extremely valid. I'll give you example. I'm ex-Papa John's International US, and when I was getting induction there— just an example, a story— uh, I was supposed to make— to work in the outlet for 3 weeks. 3 weeks, 14-hour shift. And I used to think, what supply chain has to do with that? And when I got into Domino's I realized that what happens in the outlet and what happens at the outcome of the back end of supply chain, I know everything. So everything— so I was coming to that— everything you learn out of that is extremely important. When you talk of Sweets, Sweets was a short shelf life FMCG company. We used to manufacture the product. We had 8 different plants across GCC and we used to manufacture ourselves, and the product was from a shelf life of 10 days to 9 months. And taking care of that kind of shelf life in terms of the manufacturing to S&OP to distribution planning is, is complicated. And we used to have a direct distribution network into the grocery outlet. We used to cover 800 outlets a day. And, and then when you talk of FMCG, you have to do the return management. And for return management for us in terms of food is basically just throwing it or a waste. That again comes to in terms of, of the COGS, you know, cost of the goods and everything. So that's one part of it. And another company you called was Papa John's or something, correct?

Yes. Yeah.

Okay. So Papa John's International, I was managing India, Middle East, and Africa for them. And it was basically more of franchisee network taken care of. So it is basically overviewing and running the franchisee supply chain in terms of strategy. execution is done at their end, but then you run from the strategy point of view into and take them to a right path in terms of supply chain. But in Papa John's, when I'm in Papa John's, I think so the supply chain was pretty stable during 2011-2012. Okay, so, so that was the part of it when the Papa John's were expanding across the street, and it was more towards how to manage a smaller market with 4 outlets, 5 outlets, because managing smaller markets with the smaller outlets are more difficult than managing a bigger market. So that's what I do think.

So for those who don't understand very well the, uh, the food and beverage sector, uh, can you just maybe briefly explain, uh, what are the key differences between companies like Pizza Hut, Papa John's, and Domino's? How do they operate? Because obviously you mentioned, you mentioned the franchising model. Some, some companies operate themselves, their own outlets, their own stores, and some of them don't. or sometimes it's a mix. So can you explain to us the differences between all those companies?

Yeah, so, so Max, I think so all these 3 pizza giants operate in the same way. They have no outlets of their own across, across the world, okay? They have few outlets of their own only in US, okay, where, where it was started, okay? And then they operate on a franchisee model. The franchisee model in US, I think so for all of them, is street franchising, which Subway also does. Which is, you know, every street you can have a different franchisee and the supply chain is taken care of by the parent company. While on the other, other, other markets in the world, they either do territory franchising or do country franchising. So, so then when somebody is taking a country franchise, he is adequate enough to take care of the supply chains, you know, all these kind of things. So, so this is how they operate across, because operating by their own outlets across the globally I don't think so it's possible and it's a good idea.

So those franchisees, when they, they become franchisees of, of a food chain, they need to follow exactly the rules and regulation of what you have been putting in place. When it comes to procurement, they have to buy through you, they need to use your 3PLs, and they basically need to follow all the rules and standards from you, you, you've set up, right?

It's different for different brands. I will really not name the products from a confidentiality point of view, but there are brands where they want to supply globally some products, very, very some product which is very proprietary to them, okay? Confidentiality in terms of the formula of the product, okay? But then there's some products where they will develop the vendors for you, and these vendors are under compliance of food safety and compliance norms, and then you can take it from that vendor. So, so it, it, it works both ways because— and in today's world, it has to work both ways because your supply chain has to be very flexible, agile, and resilient because the situations are changing over the days.

Okay, that's interesting. Okay, I just want to remind everyone that you guys can ask questions to Sandeep This is again an AMA, so we really want to get your questions and then Sandeep can take them. So if you have a question, make sure to click on the Q&A button located on the bottom right of your screen, and we will take those questions. I'm not going to ask all those questions during the session, and Sandeep is not going to speak like this for the next 45 minutes. So we really hope that we can get some questions. But let's move on, Sandeep. Maybe I wanted to ask you. Another question. What are the key differences that you have witnessed happening, especially in the last few years, you know, through the pandemic? What has been the big changes for you in terms of managing supply chain in the region? And maybe as a result of the pandemic, maybe you've done— you're doing something new or something different post-pandemic. Yeah.

So, Max, If you let me start from the scratch, I'll just try to take a trend out of it. Let me let me just see that part of it that we we started with COVID Let let's say the the life started with COVID okay? And when the COVID started all the way around, nobody was knowing what is coming. Nobody was knowing what is pandemics, okay? Nobody was knowing the effects of the pandemics when it started in. I think it started a bit early towards your side, but if for our side started all the way somewhere around March or April, and we were not knowing what to do. We were not looking at contingency planning before that. We were not looking at the agility and the flexibility of the situation because the situation was not that complex. There were slight issues, but then from today's point of view, they were like nothing. Okay, so, so that was one part of the work at that point of time. We were— I'm just talking of us— we were basically, we are basically a delivery company since inception. We, we have not become delivery now. So I think so, by default, we were ready for it. And, and I was— and we were like, we had systems, we had our own, uh, smart, uh, systems in terms of our own apps, our own everything. In terms of the things, and we also was geared up in terms of the food safety, which were the biggest clocking thing at that point of time. Okay, sorry. As Domino's, we normally don't give our pizza to external aggregator; we deliver it ourselves. That was the USP at that point of time by default. Okay, and and from May onward, the business started booming, literally booming, and the supply chains was in a big challenge. We were not knowing what's happening. Okay, there were issues in terms of the vendor, there were issues in terms of the infection at the vendor side. Every country had different norms of lockdowns. Okay, so, so this opened our eyes to make sure we redraw our supply chains again. Okay, we, we actually look at flexibility in terms of agility and resilience, but also in terms of contingency planning. What is Plan A and Plan B and Plan C? Okay, going ahead, if you, if you talk of 2021, starting 2021 and towards, towards 2022, we had a big inflation in terms of commodity, very, very big. And this inflation was bringing on towards either geopolitical situations or because of the country impacts or because of the global warming. And there were, there were plethora of permutation combinations that was coming on that, and they were inflating crazily. point of time. So that again gave a kind of a mindset of looking supply chains from a 360-degree view in terms of the strategy. Then comes 2023, and it's the Russia-Ukraine war. Okay, around 2022, sorry. At that point of time, your biggest thing that is very important for us is flour, the wheat, and it comes into a very, very big kind of suppression. Okay, because Of this thing. Second thing, it was Russia was the main point of energy in terms of Europe, and and Russia stopped giving the gas and everything to Europe, and the cost of the energy started going up, and that has inclination in terms of the rising of the cost. Another one, okay? In in terms of the COVID part, I'm just going back because I'm just telling you guys a bit of story again. It was you can think of something when the COVID happened. The big thing for us is cheese. Which is which is a dairy product at the end of the day, and it comes from milk. Cow doesn't know it's a COVID or not COVID. Cow is going to give the milk it is supposed to give in terms of the yield. So cow was giving the milk, and the farmer had nothing to do because the markets was closed. Companies were not taking it from them, and milk has five day shelf life. So you have no other option but to throw milk because you are under cooperative agreement with the farmers. Okay. So there was a pushback between the farmers and the factories, and at one point of time, farmers thought of rather than milking the cow, let's start cutting the cows. Because beef is more expensive and it can be sold easier compared to milk at this point of time. And beef can be frozen and it can have longer shelf life. And they started cutting the cow. And then 2023 came where the demand started going up and there was no milk. So you can see the commodity because of different reasons, what happens to you. Okay. During 2023, we, we had this kind of thing and the Russia-Ukraine war was going on. There was a lot of geopolitical situation across the countries which was affecting commodities in a very, very big way, up and down. And this was something which you cannot predict. It was unpredictable. Okay, going ahead, if you talk of 2023 towards the end, uh, Max, can you hear me?

Yeah, we can hear you, no problem.

Towards 2023 end, on 7th of October, we had Israel-Palestine war started. Yeah, and this had a major effect on Middle East. And then with link to that, we have a Red Sea issue where, where the, where the shipment got stopped in Red Sea and, and the freight was continuously going up because the shipment was going all the way from the Cape of Good Hope coming into Middle East and all these countries. And, and that again opened the eyes to as to what to do. And, and there was the main thinking of everybody thinking across, I think so, across the branch because I do a lot of conferences And one question that comes in, why don't you bring the source to nearest to the supply chain? Yeah, okay, because that saves— that has a lot of factors in terms of saving inventory, sustainability, a lot of factors. But, but is it so easy to bring it? Okay, so that was a big question which we can take it up separately. And, and today, if you ask me, it is, it is a global turmoil having everywhere. It has a major effect on the business. Okay, we We we are getting a kind of a side talk. So I don't know. It's a grapevine in terms of U.S. recession. Has that got effects on these countries? I'm sure it is happening, at least in terms of the people buying habits. So so there is an overall effect that has happened in last four years, and the way things are moving, it is super fast. It's like sometimes it feels like a beyond a human, you know. system in terms of understanding and reacting to that.

Yeah, things are changing fast. Yeah. Okay, so we have some questions already being posted. Again, uh, thank you very much. This is what the Ask Me Anything is all about. So I'm going to take those questions one by one, and then Sandeep can answer them, uh, to, to all of you. Let me take, uh, this, uh, the first one. Uh, this is from Brian, is asking, what's the biggest challenge you face when managing supply chain for global brand like Domino's?

Thank you, Brad. So the biggest thing as of now is basically inference of what need to do. That's the biggest thing. And if you— if I'm just taking the topic to the AI, when you talk of a typical supervised learning or a deep learning, you know, one thing comes out of it, that system starts giving you inference based on 100 different permutation combinations and algorithms. So in today's situation, the number of variables are getting so higher that what decision you are taking is a right decision or not, a lot of times we don't know. Okay, the second thing is the global inflation and the geopolitical situations. Okay, and geopolitical situation is linked to each other. So if you just match the dots, everything is linked to each other. Okay, so because this kind of situations have never happened, so even today if I've got a full-fledged AI system in place, I have got segmented labeled data into it and it gives me inference, maybe it will not give the right inference because it has not learned the situation that's happening now. I think so, in a nutshell, I covered this question.

That's good. Let's move on to the next question. Let me bring this up. I'm going to take this one maybe. This is interesting. people to actually ask questions also as well. So let me move this. Okay, any emerging trends in supply chain that you're excited about?

So, Max, in today's condition of the supply chain, either you can be depressed or excited. Only 2 things can happen. Okay, so definitely I'm excited about the digitization that's coming in supply chain, though it has far-reaching effects. Are we ready to do it? When is the right time to do it? Is it giving us an ROI? But the kind of digitized factor coming into the supply chain, which gives you a very, very big transparency and understanding about the supply chains, and, and really it's a human-transpired system, but at the end of the day it will, it will benefit human beings. So that's the one part of it. I think so globally the data is available, accessibility of the data is more more as of now. Okay, we have data, but how do we use the data? That is important. But at least we have some basic sources available now. There is one part of it. The second part of it is, at this point of time, you can reframe the whole supply chain for the future if you want to do it, and if you have a right structure and right infrastructure to take care of that. So supply chain is going through very exciting times, and I think so after the COVID supply chains has been recognized as the board-level function now. So that's very exciting about it.

Okay, great. Thank you. So we have a lot of questions coming in now, and I'm just adding them into the queue. So let's move on to the next one. How essential— okay, so this is actually a long question, and I'm going to try to use and read it properly. How essential is skilled HR for ensuring seamless supply chain flow? managing logistic complexities and upholding accountability for procurement and recruitment disruption in value chain?

So very good question. Thank you, Sahar. Uh, it's a very, very valid question. With, with the system changing, the accountabilities and the, in the, in the complexities of the thing changing, you need skilled manpower. you need the people to run that system in a best way possible. Okay. When it comes to AI, you need the people who understand the system. Okay. So this is a big debate across now because there has been a debate saying AI will make the people lose the jobs, but definitely AI will create a lot of new jobs with a new kind of technical qualifications. Okay. Second thing, I think so at this point of time, what I can say, with the current condition, there's no other option but to just make sure your team is well trained. You train your team in a well way. They should be well informed. The communication should be seamless. And at the end of the day, the biggest thing for me in today's situation, which is in a very high disruption and complexity, is to keep the mental balance of your team at any point of time. Because, because, you know, I was in a Gartner summit in London last, last week, and there was a big discussion on the mental things in terms of disruption and how this is going to affect the teams. So that's the main thing as a leader, to make sure that you keep on upholding them. They need to know communication. And the biggest thing is, they need to know the consequences of their actions. Sometimes in our team, the people are doing it without understanding if he does that, then what's going to happen in a positive and negative impacts.

Okay. All right. So let's move on to the next question. Thank you, Sandeep. Let's move on to this one. Can you share— this is from Sharon— can you share some metrics or KPIs you use to measure your supply chain success, supply chain management success?

So the biggest KPI that we measure is basically OTIF, on time in full. That's a very big KPI. The second KPI we measure is the forecast accuracy. The third KPI we measure is the inventory turnarounds. And the 4th KPI we measure is cost of goods sold. So these KPIs actually control your whole bottom line.

Okay, great. Thank you, Sharon, for the question. Let's move on to the next one. Um, okay, with growing focus on sustainability, what steps has your company taken to reduce waste and carbon footprint in logistics? Good question.

So, Max, do I have like three four minutes to answer this question?

Yeah, go ahead. Yeah, that's an important topic. Yeah.

So I'm just just thank you. I don't know who has asked this question. What a brilliant question. So I believe on one thing: everything we do here is a series of conscious and subconscious decisions that we take. As of now, as per the Gardner Gartner reports. 44% of the supply chain leaders expect that the climate change will create challenges of security of supply in next 10 years. And that's a very, very valid thing that has come out of it. Okay, the second thing is, as of now, in terms of the ESG regulations, in last 5 years it has increased by 155% across the country. So the people are focusing on that, but For now, only 18% of the global organization across the world, as per the survey— maybe it's not correct figures— are ready for a net zero by 2040. So it's quite alarming, alarming figures. Okay, when we talk of— so I just talked of something which was bringing the source closer. Okay, when we talk about bringing the source closer, It is the source is close to supply chain. It is still not JIT when we used to talk about JIT, but then rather than me getting a source out of California, if I bring the basic raw materials towards me and do a manufacturing on the last mile here only, somewhere nearby, it is going to be cost effective because the raw material content in a container will be more higher than the final product. So First thing. Second thing, the raw materials normally have a longer shelf life than a final product. Okay, so so basically that's sorted out. The third thing is the last mile will be smaller, and because of that you can do a smaller batch manufacturing, which will takes care of your inventory turns, takes care of your warehousing space, take care of your warehousing carbon footprint. Okay, and also takes care of your logistics. So the fourth thing is food waste. When we talk of whole thing in terms of us. Okay, when you talk of a classical forecast accuracy, S&OP, uh, S&OP for accuracy percentage, it is related to the food because, because food waste, churning out the food waste is a big cut time in terms of reducing the carbon footprint. The 4th thing is the last mile delivery where we talk of the electric bikes, though the infrastructure is not available everywhere across the countries. But yes, it is going to be the next one coming in. Okay, the 5th thing is that we have started in some of the places, but everywhere, I don't know, at one point of time because of technology possible, is to use maximum solar power in terms of running your outlet. Okay, so, so these are some of the things, but the biggest thing is basically the logistics part, your wastages part, and your warehousing space part, because that actually generates a lot of waste and carbon footprint across this. When, when you talk of this whole thing in terms of the sustainability, the, the biggest thing is how do you build sustainability? Sustainability looks like a glamorous word today, but then sustainability should not come at a cost. Everything as of now, we work on a bottom-line-driven businesses. We don't work on a top line anymore. Okay, so when we talk of that, you need to when you are building a sustainability plan or reducing waste and carbon footprint, it's— you should understand the constraints of it in terms of the physical constraint and the financial constraint. And the biggest part of the heart of this whole thing comes out of S&OP. That's what I understand. If the S&OP is right, 30-40% things are right. The balance can be done in small silos which can be taken care of. So I hope I tried covering up this entire factor.

Yeah, very good. Fascinating topic. Thanks again for the question. So let's move on to the next one. There are more coming, so let's do this. So next one is a Q. Someone is asking, again anonymous question, but is automation shaping your logistics from sourcing to distribution? If so, how?

So when we talk of automation, what kind of automation? Today, Max, when we talk of automation, every come with a glamorous word of AI. AI is not, not for everything, okay? Uh, people talk of machine learning, it's not for everything, okay? What is the requirement of automation, okay? And how much is the requirement for your company? Can your company has got the, that level of resources to handle that system? In place. Okay, I can buy the system at $4 million, but then the people should understand how to handle that system. First thing. Okay, second thing is you should have well-defined segmented labeled data. If that is not there and you are talking of unsupervised machine learning, it is not going to give you inference. It's going to give you trends and everything, but it will not give you inference. It will be an advanced kind of Power BI, let's say. Okay, the, the third thing is basically I personally feel when you talk of a full automation, you should do in silos rather than doing a whole chain at one point of time because there is lots ups and downs which you don't know. Okay, the, the fourth thing— or fifth thing, sorry— is basically when you talk of a sourcing, this, this is the biggest that I don't have an answer to it. I am trying to get all the data into my AI system or a machine learning system, the system is learning over it. But then what are the things that is coming in the future, or it's happening on a monthly basis? It will take it some time to learn. And because of that, I've, I've heard the sentence in one of the conference, only 40% of AI projects are successful today.

Yeah.

But yes, is AI for tomorrow? Absolutely. We cannot live without it. Okay. But will it come in the same form or different form? We don't even know at this point of time. Okay.

Yeah.

So definitely when you talk of a typical sourcing, I still say AI is a human-reinforced system. A human is always there. You're talking of a data AI, but there's a human intelligence in between that. So if you have built up through that system, definitely the automation is shaping up everything at this point of time. It's making the life easier. But is the ROI coming? Because every boardroom, when you take up the project with them, the first question is ROI. Maybe it is going to take longer for the ROI for the automation this time, but then when you talk of a typical, let's say, distribution or let's say warehouse or something, you're talking of very intelligent WMS systems that is available today and they are really working quite fine. But you talk of the entire thing, so at one point of time we were doing a project to understand the probabilistic forecasting in terms of automations, that how it's going to work. This probabilistic forecasting is not on my, on my product or on my supply chain. This probabilistic forecasting is on the demand of the customer, the order of the customer, that if this customer orders this pizza today, what will be his frequency of ordering it. So you are talking of that level of the things, but then does it come easy and this comes at cheaper cost? I don't think so. But there absolutely one thing is there, this is going to be the future of supply chain. How, when, where, and what will happen, and how will the cost— that time will tell.

Yeah, wait to see. Yeah, okay, great. Thank you very much. All right, let's move on to the next question. Uh, this is, uh, again, what are the biggest logistical challenges fast food supply chain face today, especially given the rise in delivery demand?

So the biggest logistical challenge that is going to come is where do you need to source, which country do you need to source, and which country as of now is easiest one. This is changing very, very fast. Sometimes we talk of Europe, sometimes talk of Asia, sometimes we talk of US, sometimes we talk of indigenous. Why, when, how? Okay, whatever I say today, maybe I'll say, uh, guys, as of now India is becoming a big supply chain hub now. Okay. Because it is in the center, it's easier to us. These duties are exempted, but tomorrow this will hold good. I don't have a clue. Okay. The second logistical challenge is that's going to happen is the geopolitical situation, which is indirectly responsible, like your Red Sea issues and all these kind of things that has got an impact on that. The third one, basically the rising cost of transportation. Yeah. Your shipping cost is rising crazily. Is it rising on its own, or is there a— is there people behind, the companies behind it to make it rise? I don't want to discuss this topic on this thing because this is a bit of a complicated topic to discuss, but definitely it is posting a huge challenge. The third thing is the lead times. When you talk of the lead times, you have inventories upholding on the sea, which is taking care of your cost, your Everything in terms of it. So again, I'm coming to the same thing. How do you bring the source closer, which is more towards your control? So these are some of the things which I can highlight at this point of time.

Talking specifically about delivery, last mile, so is your fleet of delivery personnel belongs to you, or do you outsource, or do you have a mix of both?

No. So Max, we don't outsource. At the compliance, Domino's does their own delivery. Okay, there has been some instances in some country because of, again, the lack of drivers and everything, where, where they normally outsource it. But then outsources, they keep it under their control. Maybe they are not on the payrolls, but they are under our control in terms of the food safety and compliances. Because we normally, from a digitization point of view, Domino's is a digitized company. It is not a food company.

Okay.

We talk about 30 minutes and free. So when you talk of such kind of KPIs You need to have a delivery under control.

So 90%, yes, it's what's the most difficult country for you in terms of delivering properly pizza. So, so what's the most challenging one?

I have a couple of them.

Okay. Okay.

Recently you must have seen the bombarding happening in Beirut, Lebanon.

Yeah.

Lebanon is one of my countries.

Okay, okay.

Yeah, so you can understand there is a bombing happening at 10 kilometers and then a rider is delivering a pizza. It's, you know, so, so that, yeah, from a supply chain point of view, that's also a very difficult country to work with because the devaluation of the currency in Lebanon has been very crazy today. I think so. Lebanon is at, uh, $1 is 90,000 Lebanese pound now. So inflation has been crazy, okay? Supply chains are very difficult to run in such countries, okay? Uh, so one is that, uh, a bit of difficulties Pakistan also, okay? Because of the rising cost and the lack of drivers and all these things, because everybody wants to run towards Middle East from there because the country is a bit on a difficult situation in terms of the GDP. So some of that.

Interesting. Okay, let's move on to the next question. We have some more to take. What role— this is from Shane— what role does technology play in streamlining logistics in fast-paced sector like food service?

So, uh, technology— Shane, thanks for the question— technology does everything. Without technology, we cannot survive. From starting from getting the order to making the pizza to getting it delivered, the technology plays everything. Okay, today I think so one word counts in this world is convenience. Convenience sell at any cost now. Okay, you're talking of cloud kitchens, you're talking about delivery space in terms of the food. It is so convenient today. You can even understand when the food is getting prepared, when the driver started, when the driver left, when the driver— you paid money to the driver. Everything is controlled at one point of time. Okay. Okay, so one part of this. The second part of technology plays one thing to ease out the communication. The communication is seamless. I can, I can be here and I can have live data of my outlet selling the pizza, the sales mix, and the kind of sales going on across 800 outlets. Cannot have something more than that because technology lets us, helps us to take a better and a faster decision.

Okay, great. Thank you. All right, let's move on to the next question. What advice— this is from Yanisa— what advice will you give to companies looking to expand their operation into the Middle East?

I think so the biggest advice I should give is make sure your supply chain department is very, very strong because the variables are very high, the permutation combinations are very high. We are in the middle of a bit of a geopolitical turmoil, okay, with other different other countries, but that indirect effect is coming on us. Second thing, Middle East is going heavily on, very, very heavily in terms of the localization of the product. It's not that easy because we do not grow anything here. Everything comes from outside. So that entire whole thing has to be— I'm talking of food, food at this point of time. Sorry, you know, Max, because this is a very broad question. Yeah, yeah. Okay, this is one of the key things you need to understand before expanding into this country. They are great countries, they are expanding at a big pace, you know, they're safe country, they've got great GDP there. So people want to come here, but then it comes with a lot of challenges also in terms of that. So, so get your things right into this country, understand these countries, okay? Understand what has been the trends and what can be the future. And then try to set up in that way. And also make sure your base is put in a way that you can cater to all countries. Because if you see GCC, when you talk of like GCC, every country is like Hong Kong, let's say small.

Okay.

Yeah. So the interconnectivity is very high. So you need to understand where is the base and how this hub and spoke model works for the whole in terms of the distribution supply chain.

There's a strong push from countries like Ethiopia or even Saudi Arabia to have a lot more manufacturing going on.

Absolutely.

Does that help you? Do you see any changes on the food sector, for example? Or not so much?

So it will help for sure. The sources are coming closer.

100%.

But at what cost? That's still—

yeah, that's the problem.

Yeah, that's the thing. Okay, at what cost? Is, is the country going to put anti-dumping duties? Is the country going to push and do localization at any cost? And Max, our business is for the pennies. We talk of pennies. Our business— we don't sell gold, we sell pizza at the end of the day. So you have to understand from that point of view.

Okay, let's move on to the next question. How do you approach quality control for suppliers across multiple regions? That's a good— that's a very good question.

So we have 2 layers. One is the Domino's International organization based out of US, and also through this country, some of these countries, they're available in terms of the quality guys. They have a very strong compliance, okay?

We—

they have to go through a 3-tier audit process before we fix up our vendor, okay, his whole chain including his suppliers can be audited, okay. We need a strong HACCP or FCI system in place before that happens, and then we have a periodic audit depending upon what is the stage that supplier is. If the supplier is at critical stage, there can be audit once in quarter. The supply is a stable stage, it can be once in 6 months or once in a year. So, so there's a very strong quality system, and that's what the strength of the global brand is.

Okay, cool. Interesting. Thank you for that question again. Let's move on to the next one. Do we see— okay, that's a question. Do you see any market leaders developing in the space of GenAI for logistics?

Max, I have an answer to this question. I don't want to take any company's name on this. We have a couple of companies who are doing very extensive work on that. here. Okay. But if you want to reach me directly one-to-one, I can tell you the name of these companies and to understand what they are doing. Okay. In terms of the GenAI. But there has been some companies there. One of them have done a project with us also.

Okay.

Though we have to stop the project because of the geopolitical issues, and that project was almost $4-5 million project. So, but yes, there are.

Okay, cool. All right, let me check again if there's more questions coming in. Not for now. Okay, so again, if you have more questions for Sandeep, you know, go ahead, feel free to, you know, type them in the Q&A. We still have a few more minutes before we wrap up this session. What is your— I wanted to ask you, Sandeep, I mean, yeah, you've been mentioning obviously we're going through a very difficult situation with what's happening in the Middle East. Israel, Gaza, Lebanon, Iran, you know, and possible escalation of a conflict across the region. What is your— and we have now the elections with the US who also might change quite a few things. So if you're looking at, you know, getting— as you get ready for 2025, what is your view of, you know, what are you going to pay attention to and And what, what is your concern for next year?

Yeah, very difficult question, Max. Very tricky. Okay, so Max, first time, I think so, though it's not first time for me, but first time for this organization to put up their budgeting based on a zero-based budgeting. We are not taking any trends of the past to build the budget for the future, and we are trying to build a budget and a B budget. Okay, so one part of that where we take all the variables of that, okay. The second part of the story is definitely we don't know. We used to think that this war is going to be a small, like in terms of the short war, but then it is just flapping up and it's just going across and now, you know, covering other countries also. So we really don't know what's going to happen, but then definitely there is effect on the commodity and the inflations based on this war and based on the gimmick of the future, okay, including the US elections. So what we are trying to do is we are trying to make our supply chain base more broader. We are still trying to do— we have already done localization in Pakistan now, in Egypt now, where the currency devaluations are high. Okay, and there is a long, huge drive of localization into Saudi Arabia that you also said. Okay, so we are trying to put our base in Saudi Arabia because if you take a base in Saudi Arabia, your hub-and-spoke model works very fast. And from Saudi Arabia to let's say Oman, Qatar, UAE, Bahrain, these countries are duty-free. Okay, so it's better to just put their bases there and then try to do it. But then is that that's so easy to put the base there? No. So it's going to take some time, but we have already started working on that. And as of now, if we we we are normal, we basically in Middle East we are a public company. We are based on we are on Saudi stock. change. So, so what we are trying to do is we are trying to actually— we are trying to get into— got into a commodity management now. Literally, we actually keep a close view on the commodity, and then if there is a hedging possibility on the commodity, we hedge it. Okay, there can be an increase in the inventory, but at the end of the day, if you do a cost-benefit analysis, maybe you are better at that point of time from, from cost point of view and from stockout point of view. So in, in our business, the stockout is a crime at the end of the day because customer loyalties are lesser now comparatively. So there are 2 things actually.

Domino's is a global company. How much of knowledge and best practice do you get from the other region? Do you actually exchange and collaborate on a regular basis with your counterparts in Europe and North America, South America, and Asia, for example, do you have a lot of information sharing about, you know, how to improve and how to optimize your operations?

Absolutely. So we have a central organization of Domino's International in between, which actually takes care of some of these kind of things.

Okay.

They have a base of the entire, you know, data system as to what's happening, if it's not a confidential data of a country. Okay, in terms of the NPD launches, what's new, what's, what's going to happen, what we are trying to launch, what are the things. So this happens, and we have quarterly conferences virtually, maybe, where the people share the best practices and the challenges that's going— that's happening.

Okay, so when— so you, you get to hear best practice on supply chain procurement logistics from, from your colleagues in other parts of the world as well?

Absolutely, absolutely.

That's interesting. Okay, all right, I think that's great. So what would be your final advice to people who are listening and which are in the food and retail sector when they look again at that supply chain and, and how things are evolving, you know, with digitization and What would be your piece of advice for them?

So my piece of advice is it's a very exciting time for supply chain. The only thing is you need to know what I need to do now and what is going to be the future. Your team should be mentally balanced. They should be having great trainings in terms of getting their skills upright. Okay, uh, you should have a very sound and strong KPI system. You should have a very sound review and mechanism in terms of the feedback. That's the main important— we do KPI, but we don't review the trend. Okay, you should be looking at a digitization, maybe in silos for now, over the next 5 years, to see that you are on a race in front of the race, not in the behind of the race. And the 4th thing I think so is a seamless communication across the organization. That is possible through the data only, for everybody to understand his consequences in terms of the negative and positive impact and his importance in the organization. That's the main thing. Because retaining talent today, trained talent, is becoming a bit of a challenge.

Very difficult. Yeah. Okay, great. Thank you very much, Sandeep, for sharing, you know, your experience and some of your insights of, you know, running, you know, your operations in a complicated region that you are in charge of. So I really appreciate you taking the time today for being with us. And also, I want to thank all the participants for asking those great questions who made that Ask Me Anything session interesting and worthwhile. So thank you. Big thank you, Sandeep. And again, we look forward to see you next time.

Thank you so much. You guys have a great day and a great week. You too.

Okay, we'll see you. Thanks. Thanks a lot. I'll see you at the next event. Thank you.