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Tim Hortons Inventory Management
Transcript of Tim Hortons Inventory Management
Tim Hortons is a canadian multinational fast casual restaurant known for its coffee and doughnuts. It is also Canada's largest fast food service; at the end of 2013, it had 3588 restaurants in Canada, 859 in the United States and 38 in the Persian Gulf region. It was founded in 1964 in Hamilton, Ontario by Canadian hocket player Tim Horton and Jim Charade, after an intial venture in hamburger restaurants. In 1967, Horton partnered with investor Ron Joyce, who assumed control over operations after Tim Horton died in 1967 and expanded the chain into a multi-million dollar franchise.
Just in time
The Just in time strategy will help Tim Hortons to increase their efficiency and eventually help to reduce the waste by receiving unwanted goods that is already present or needed for production. The just in time inventory model allows corporation to reduce their overhead expenses while always ensuring that raw materials are always available to prepare their products. Many similar businesses including KFC and McDonalds use a similar inventory management model.
Owner warehouse Costs
Storing excess inventory can cost a lot of money, and reducing the inventory at hand can reduce carrying costs as well. The just in time inventory model helps the company to save on the storage space resulting in need to maintain less number of warehouses which eventually helps them to reduce the number of warehouses they hold.
Better Supply chain management
The just in time inventory model also helps the company to be more efficient and competitive to handle their supply chain and use their raw materials to make fresh products for their customers. An efficient supply chain management can provide lower costs throughout the process, and those lower costs can then be passed on to customers resulting in fair pricing of the products.
Inventory management is the practice of planning, directing and controlling inventory so that it contributes to the business' profitability. Inventory management can help business be more profitable by lowering their cost of goods sold and/or by increasing sales.
Tim Horton's franchise
Its franchise restaurants deals with three suppliers. The first supplier is the main company. It supplies its branches all the hardware that doesn't go to fridges. The second supplier is Neilson, supply them by milk, cream, and cream cheese. The last one is Sis co, Provide the 25 kind of doughnuts, muffin, and bread
Also demand increases by the season. More demand for coffee and hot chocolate during the winter. However the demand for these items will be less during the summer. Also, more demand for iced Cappuccino in summer than winter. Number of daily transactions is from 15-16 hundred a day and cost of items is fixed. They use just in time system, thus they use borrowing method in case a big unexpected order or other reasons or they can make a quick order. The ordering inventory and receiving time take 24- 26 hours. Also, they use inventory back up and keep excess inventory against stock-out.