International Conference on Innovation and Emerging Trends in

Business Management
ICIEBM-2016

EVALUATION OF SUPPLY CHAIN BASED ON SCOR MODEL
THEORY: A CASE STUDY OF FOODPANDA

Bilal Ahmed, MBA

Faculty of Management Sciences,
SZABIST, Karachi, Pakistan
Email: bilalahmed91@gmail.com

Rizwan Raheem Ahmed, Ph.D.

Department of Business Administration & Commerce,
Indus University, Karachi, Pakistan
Email: rizwanraheemahmed@gmail.com

ABSTRACT
The SCOR model has specific focus on laying out the processes and determining the
relationships that exist between every process. It focuses on customer interactions from any and
every service level, all the product transactions that take place from suppliers to customers and
all the market interactions that take place to fulfill the demand that has been generated by each
order.
Applying the SCOR model on foodpandaTM made us aware of the business processes employed
by a certain online food ordering company who does not come specifically but can be considered
an integral part of E-commerce. The SCOR model helped us determine what business processes
are viable to the running operations of the business and play a key fundamental role in the
delivery of services to the business. The objective of this research was to discover how these
variables lead to the performance of a company and the balanced planning, sourcing, well
managed delivery distribution systems and the integration of technology into the multiple
functions of the company provide an overview on how the company is improving its
performance over time.
The insights gained from the interview lead us to conclude that foodpandaTM is a growing
business and has an emerging supply chain that will evolve with time, as its business processes
become more complex or increase. We have concluded the fact that applying the SCOR model
raised awareness amongst us on how important and integral is supply chain of a company and
how much balance it provides to the company and how it manages to coordinate every
department just to satisfy the customer. Applying the four drivers of the SCOR model on
foodpandaT made us clarify the companys distinct functions and how it helps in improving the
performance of foodpandaTM.
On the basis of results, we recommended that since the FoodpandaTM has good systems and
strategies in place but it needs to work on raising awareness about the brand in the country and

Electronic copy available at: http://ssrn.com/abstract=2802591

increase its presence to more local cities. It should increase its target market base, as the deals it
offers are quite lucrative and economical.
Key Words: FoodpandaTM, SCOR Model Theory, Interview Technique, Supply Chain, E-
Commerce
JEL Classification: L9, L86, M1

1. INTRODUCTION
In recent times, the internet business has grown rapidly over the years bringing in a reflux of
changes in the commercial business, internet shopping and e-commerce (Kim & Choi, 2008).
With the growing number of internet based services revolutionizing the needs, wants and
demands of the consumers, internet based businesses are now required to implement variously
new, innovating and different ways of conducting their businesses and meanwhile improve their
conduct, communication and treatment of the consumer to best understand the purchase patterns
of individual consumers and properly provide consumer friendly business environments that can
satisfy the customers.
However, during these radical changes in the internet market, most businesses only conduct
studies to monitor the modifying consumer behavior, consumer perceptions, consumer purchase
intentions and current market status to overcome the flaws in the consumer satisfying chain.
What these studies mainly lack while trying to study the consumer is analyzing themselves to
overcome the flaws in their supply chain, which if corrected, would mainly ease out the whole
supply chain process of online retailing.
According to a research article on the supply chain dynamics in e-retailing, Supply Chain
Management is a combination of three components: supply, chain and management. Supply
deals with meeting the ever-changing needs, wants and demands of the customer, chain is mainly
related to connecting the customer to the business through a process and the process of managing
the supply and chain of a business is termed as management. In the e-retailing business, the
supply chain consists of not only manufacturing and delivering the products to the customers but
it also deals with the IT based structure that helps the consumer connect to the business and start
the process.
The primary purpose of this research is to gauge the contribution and impact of the effective
utilization of the SCOR model by online businesses, the impact of these supply chain metrics on
the performance of online businesses and to determine the issues in the supply chain of online
businesses that persists mainly and is a big contribution towards loss of net sale to online
retailers. This study will help us in determining the role of Supply Chain Management in online
business retailing, highlight its issues and solutions to such issues based on foodpanda.pk.
1.1 Problem Statement
This research determines the impact of the Supply Chain metrics and how they help an online
business perform based on the variables from the SCOR model to determine the level of
effectiveness of their supply chain strategies. We will be focusing on foodpanda.

Electronic copy available at: http://ssrn.com/abstract=2802591

1.2 Research Objectives
This study comprises of the following objectives:
- To observe the impact Supply Chain Planning has on the operations of online businesses
and their performance.
- To observe the impact Supply Chain Sourcing has on the operations of online businesses
and their performance.
- To observe the impact Supply Chain Manufacturing has on the operations of online
businesses and their performance.
- To observe the impact Supply Chain Delivery has on the operations of online businesses
and their performance.
- To observe the impact Supply Chain Return has on the operations of online businesses
and their performance.
- To observe the impact Supply Chain Enable has on the operations of online businesses
and their performance.
1.3 Research Questions
The following research questions are applicable to the research:
What is the level of Planning, Sourcing, Manufacturing, Delivery, Return and Enable
have foodpanda applied?
How effective is the supply chain of foodpanda?
What issues exist in the supply chain of foodpanda and how can they be overcome?
How effective is the SCOR model on online businesses?
2. LITERATURE REVIEW
This literature review defines the concepts of supply chain management with the basis of the
supply chain operation reference (SCOR) model and how its specific drivers i.e. supply chain
planning, supply chain sourcing, supply chain manufacturing, supply chain delivery and supply
chain return, help in the performance improvement of online business retails. Moreover, a
conceptual framework has been developed using SCOR model and its drivers impact on the
SCM of online retail businesses.
2.1 Supply Chain Management
Foster (2008) described supply chain management as a set of activities that coordinate to work as
a value addition system based to enhance the performance along the value chain. It also includes
identifying the set of opportunities and relationships that evolve due to upstream and
downstream linkages between the customers and the suppliers. A study by Lambert et al (1998)
describes supply chain management as a mixture of processes both core and key activities that
businesses adopt from the consumer through the suppliers for adding value and delivering as
promised satisfying services both to the customer and stakeholders of the business. Hanfield and

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2..2 Role of it in Supply Chain
IT has been on the forefront in Supply Chain in recent times according to many researchers as a
new era of technology integration leading to innovative business solutions by developing IT
programs that help apply supply chain more smoothly and effectively all over the businesses
different departments, activities and processes. Not only these IT programs integrate SCM and
help develop business processes over time to smoothen the supply chain and shorten the lead
time of every business process and activity, they have helped document terms like materials
resource planning (MRP), bill of material (BOM) and master production scheduling (MPS)
which have successfully created a new dimension of SCM as a branch of IT, designed and
implemented to cater to the requirements of the customers (Armstrong and Hagel, 1996).
However, during these radical changes in the Internet market, most businesses only conduct
studies to monitor the modifying consumer behavior, consumer perceptions, consumer purchase
intentions and current market status to overcome the flaws in the consumer satisfying chain.
What these studies mainly lack while trying to study the consumer is analyzing themselves to
overcome the flaws in their supply chain, which if corrected, would mainly ease out the whole
supply chain process of online retailing.
2.3 SCOR Model
A recent development by the Supply-Chain Council (SCC) in supply chain management is the
process reference model known as the supply chain operation reference model or the SCOR
model that communicates SCM practices all over the value chain including all the phases that
help satisfy the demands of our prestige customer.
The SCC to formulate the management processes of any business through this model so as to
achieve excellence in supply chain practices and systems across all processes introduced this
model in 1996. This model builds a benchmark for businesses to follow and adapt in their
standardized technology and processes to achieve stabilization in their supply chain practices.
This benchmarking helps monitor operational performance and measurement and link it directly
to the financial performance of the company in order to determine the scales of future
improvement both operationally and financially.

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Figure 1: A Source: SCC, 2009.
The above figure shows the supply chain drivers of the SCOR model of supply chain, which are:
- Plan
- Source
- Make
- Deliver
- Return
Hanfield and Nicholas (1999) explain IT and supply chain as an integration through these:
- The revolution of availability of information
- Global competition increasing day by day through increase in customer demands leading
to a demand driven market.
- Developing relationship and synergy amongst the various SCM functions.
Furthermore, information systems, inventory management, supply chain relationships, consumer
demands and consumer information regarding wants and needs have been described as the core
essentials for developing an IT enabled supply chain for online retailing. The above model as
described by Akkermans et al. (1999) lays importance to trust, planning, technological
development, sharing information and business cooperation in a synergy as the key elements that
characterize and lay foundation to the integration in businesses. Ballou et al. (2000) proposes that
synergy through IT in business functions is involved and evolved at every stage of the product
life cycle.
2.4 SCOR Model Relationship with it and Online Sources
Carter and Ellram (1998) lay emphasis on the implementation of the SCOR model metrics
through online sources as an effective and efficient way to manage certain outbound activities
likes after sales services, customer help services, order placement and delivery services, waste
management including reverse logistics. Coleman and Austrian (2000) proved how important
integration of automated IT systems and supply chain have helped companies manage their
operations and activities outside its physical locations and hence achieve excellence in
globalization through supply chain.
This is also highlighted by Thomas and Griffin (1996) where they discuss the importance of an
existing and evolving relationship between information systems that drive the SCOR model and
help in utilizing the resources of the company efficiently, manage customers effectively and also
provide after sales services and improved reverse logistics to satisfy customers. This also helps
improve competition amongst the entire supply chain thus adding more value in the process.
Cotrill (1997) conducted a study on effective integration in supply chain and concluded that IT
along with the supply chain metrics has evolved over the years and lead to maximum
effectiveness across the supply chain. Cotrill defined integration a viable part of the SCOR
model consisting of a virtual environment free from any physical organizational boundaries in
scales of improvement and evolvement. It acts on information and can be changed at any time
acting on information driven from customers and consumers via IT and electronic support.
Cotrill believed on transforming the initial phase of the supply chain at the company to have

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proper focus on planning, sourcing and procurement, manufacturing and delivery elements of the
SCOR model and then applying it to suppliers and customers along the supply chain to also
influence the return element of the SCOR model.
Wood (1997) & Fernie (1995) concluded how integration across the elements of the SCOR
model led to improved supply chain performance through improved communication and
cooperation. A study by Parnell (1998) highlights how integration along the entire chain only
happens when strong, fruitful and optimistic relationship exists between suppliers and clients.
These help in a reduced lead time in the overall process and improve activities like shorter
delivery time; excellence in customer services and reduced holding inventory days.
Bowersox (1998) highlights IT enabled SCM as a tool used by companies to decrease costs in
this era, while offering increased speed of delivery, reduced lead time, accurate results and
outstanding quality at an economical yet profitable price. Bowersox (1998) further highlighted
the concept of IT enabled SCM is not a new one but actually companies realized the speed, time,
accuracy and quality of it at an affordable price now.
Bowman (1997) remarks on the communication and connectivity with the customer playing a
key role in satisfying the customer and quotes an incident where a customer was dissatisfied with
the product delivered by the company despite the good packaging and on time delivery only
because the company failed to understand what the customer was expecting from it. Bowman
indicates a strong need of a positive relationship, constant connectivity and insight into consumer
mind that reflects its needs, wants and concludes this can easily be achieved at an economical
price through online modes of communication and information systems linking the all over
supply chain which translate the mind of the consumer to the company or business faster than
normal modes of research and communication making the company act to the changing
consumer perception and market demand/need in real time (Ahmed et al., 2014).
It was also noted that if the companies do not recognize the importance of information flow and
the integration of supply chain drivers in online business, the performance of the businesses will
slip overtime due to an un-synced supply chain and this will threaten not only the business itself
but the SCOR drivers (Landry, 1998; Ghobadian et al., 2000; Barratt, 1999; Tolhurst, 2000).
SCOR model is a complex framework for evaluating supply chain efficiency and effectiveness of
a business over time and it also helps find room for improvement in the supply chain of
businesses for the future according to Allnoch (1997). Saccomano (1998) believed in the
importance of SCOR model for supply chain revolution and mentioned that at the very first
stage, a firm describes its goals and objectives for performance and collects the data required to
build up its own supply chain model. Supply-chain structure comprises of product mix and
volume mix, which you are selling in the market, technological fundamentals would be
engrossed at Stage 2. At Stage 3, company actually plans its projected performance through
available variables and focuses on tuning it.
McGrath (1997) explains SCOR model as a strategic tool used to set benchmarks on the
transformation of the supply chain resulting in development of IT modules that support SCM and
help grow, industrialize and raise profits for the company. It is the best leverage a company can
have to allocate its limited resources effectively to all the SCM drivers in the best possible ways
(Allnoch, 1997). With the emergence of new technology in IT and increasing trend of E-tailing
nowadays, many methods like EDI, Internet and Intranet are aiding supply chain for connecting
with suppliers. Also it allows sharing of information within the organization. IT is playing an

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important role in enabling SCM (Love, 1996). By the use of Internet running supply chain
becomes convenient. This is because it helps to point out the products which are in demand, it
helps to identify the inventory available at warehouse, what is in production process and what is
available at factories and retailing shops (Lancioni et al., 2000).
In 2000 Wang proposed that E-Commerce is acting as a driving force in the redesigning of
organizations, whereas in 2001 Kehou and Boughton laid emphasis over the importance that IT
plays in manufacturing part of supply chain. In their study light was also shed over the industrial
procedures involved in manufacturing industry and how IT is reshaping them.
Clarke (1998) observed that tangible and intangible aspects of supply chain could be tested and
treated individually and independently. According to him Internet plays an important role in
organizing, testing and controlling different drivers of supply chain without having any physical
hold. Clarke named this phenomenon as Virtual Logistics. In 2001, Damen proposed an idea of a
logistics system based on IT which, when implemented can help in achieving excellence in
logistics through integration of advanced IT tools. This model was later known as Service
Controlled Agile Logistics.
Importance of relationship between logistics and IT was further highlighted by Anderson and
Quinns theory (1986) which highlighted that transportation, inventory management and flow,
customer care services and warehousing all can be managed in better way through the integration
of such system, and how cost of logistics can further be slashed down with the help of these
systems.
3. THEORETICAL FRAMEWORK

Figure. 2: Diagrammatic Presentation
Source: Supply Chain Council

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3.2 Explanation of Framework
SCOR model is what our research will rely on. In normal situation it consist of six main
components, namely, Plan, Source, Make, Deliver, Return and Enable. We will be covering all
the components and how they impact day-to-day operations of foodpanda.pk
Plan driver includes activities related to supply planning, demand planning and forecasting;
sourcing and procurement of materials falls under source; whereas manufacturing and
production activities fall under make; while deliver covers maneuvering and warehousing of the
stock and delivering the product to the customer; and post sales activities such as after sales
service, feedback and customer care fall under return driver.
Supply-chain operations reference model (SCOR) is a benchmark model used as a reference
point to gauge the efficiency and effectiveness of the supply chain of any organization. In
collaboration with 70 of the worlds leading manufacturing companies, this model was
developed by Supply Chain Council (SCC). Due to its broad scope and flexibility, this model is
identified as the most promising model for supply chain strategic decision making.
3.3 Definition of Variables of Framework
Variables of our study are the six components of the SCOR model, which includes Planning,
Sourcing, Manufacturing, Delivery, Return and Enable. Since foodpanda does not manufacture
food and completely outsources it, so Manufacturing will come under the umbrella of sourcing.
In-depth interviews will be conducted to collect the information to assess these variables.
Plan, Source, Delivery and Enable are classified as independent variables whereas online food
ordering business and its performance is classified as dependent variable. Our independent
variables are further divided into small segments, which are as follows: forecasting, supply and
demand planning comes under Planning, selection and screening process of vendors come under
Source, Delivery has distribution planning and Enable has technology.
3.3.1 Planning: Activities that create a blend of balanced demand and supply and help in
meeting demand and supply requirements.
3.3.2 Sourcing: Activities involved in the procurement process of goods or hiring process of
services, to aid in meeting the demand.
3.3.3 Manufacturing: Activities that help in production of goods and services to fulfil the
demand requirements.
3.3.4 Delivery: Activities that help in delivering the final product to the customer on time.
3.3.5 Return: Activities that ensure the implementation and evaluation of recycling and
customer feedback strategies.
3.3.6 Enable: Activities that ensures smooth operations of an organization such as information
technology.
3.4 Research Design
The basis of this study is to explore the contribution of Supply Chain metrics on the performance
of online-based businesses, its impact, issues and solutions. Since, it is a qualitative study it will
consist of both primary and secondary data collection. Data is collected from the employees of
foodpanda.

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3.5 Targeted Population
The targeted population was divided into heads of departments that we interviewed. The
departments that were our target were finance, marketing, social media department and
operations department. The targeted population hence, was the four departmental heads of the
company.
3.6 Sampling Technique and Sample Size
Sampling technique that we used was convenience sampling, which is a non-probability
sampling technique. The convenience sampling was used to identify specific departmental heads
that would have all the information we needed to make this research. The sampling units of this
research are the employees of Foodpanda. We found the number of employees of Foodpanda to
be 67; which was our sample size. As it is a qualitative study, the research conducted will be
interview based. For every variable, we interviewed a four different departmental heads.
3.7 Instrumentation
We used in-depth interviews to get comprehensive and detailed information regarding the
processes of foodpanda. Furthermore, secondary data was also used to create thematic questions
for the interview.

4. RESULTS & DISCUSSIONS

After conducting interviews the next stage was to do analysis on the information gathered. As
our research is qualitative in nature we did a thematic analysis of the information gathered in the
research. The thematic research will be based on the five variables of the SCOR model, each of
which would serve as a separate theme for analysis. A thematic analysis will make it easy to
understand the basic concepts of the SCOR model and how each variable operates within the
model and help analyze the different functions of foodpanda variable wise. As the interviews
were conducted based on the themes selected i.e. the variables, the analysis is also done in the
same format. This includes highlighting the theme first followed by a detailed analysis of the
company based on the SCOR model.
The SCOR model as proposed before was initiated by the Supply Chain Council to empower
organizations to impact, analyze and gain from their environments by providing intense control
to the organizations. It is used as a performance measurement tool based on the supply chain
operations of a company and encompasses the manufacturers, suppliers, wholesalers and
retailers. The model operates as a process reference model and has a pyramid of four levels that
help organizations in identifying what needs to be done for further improvement in their supply
chain processes. There are numerous important variables that a business has that relate to the
SCOR model but we have chosen the most important variables that define and breakdown the
operations of an organization into processes. These are Planning, Sourcing, Delivery and
Enable. The reason for choosing these four variables is because the organization we have taken
is foodpanda, which is an online, ordering system and these variables can be best used to define
the operations of foodpanda.
4.1 THEMATIC ANALYSIS
4.1.1 Planning

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Planning deals with the planning process of a company where it plans with respect to its market
demand, it does forecasting on sales and provides its supply accordingly. Planning involves
Demand Planning and Supply Planning. Demand Planning involves customers view and the
companys view while planning. Supply Planning includes on-time purchase requisition, giving
proper lead-time to suppliers etc. It will include the processes that take place once an order is
received till it is delivered to the customer. At foodpanda the management takes major financial
and executive decisions. On crucial and important matters, the global managing director is
involved in the planning and decision-making. But to run the operations of the company major
planning is done in two separate divisions. One is the demand planning and one is the supply
planning.
The SCOR model has three attributes in planning which respectively are demand planning,
forecasting and supply planning. While demand planning and forecasting are almost similar, the
major difference is only in the fact that forecasting is based on the companys point of view and
demand planning is reflected from both the companies and majorly the customers point of view.
Though foodpanda employs forecasting using sales figures and past data of the number of orders
generated, it is viable to access the demand planning of foodpanda as it is essential to know the
steps and processes foodpanda takes to cater the demand that is generated and that is all what
demand planning is about. In planning, we also see the supply planning of foodpanda and
analyze the plans the company has in store to look after the supply that will cater the demand
generated.
The major factors involved in the planning process of foodpanda are customer related or
customer driven data which includes the likes of number of orders generated in a month,
commission generated per restaurant, most successful deals, inventory levels with respect to
demand of restaurants, delivery service, customer satisfaction/delight etc. On the basis of these
planning is done in foodpanda. As the SCOR model suggest, demand planning needs to have
evaluation of the supply assets, total demand and requirements to cater demand, planning of
stock, variables that produce demand and the plans to cater demand. Foodpanda has its demand
planning divided into three distinct categories. These include deal planning, planning with
respect to sales history and seasonal planning. All planning is initiated from these three stages,
which includes planning for marketing too.
The deal planning at foodpanda is the responsibility of Key Account Managers (ACMs) and the
marketing department. The marketing department tells the Account Managers what needs to be
done and likewise the account managers plan their deals to offer to the restaurants. The
marketing department tells the marketing scenario in place and the ACMs plan accordingly for
the deals to offer to the restaurants. Deal planning has a schedule of deals to follow. Foodpanda
has deal scheduled which includes deals on specific days under the name of Monday Madness,
Whacky Wednesday and Weekend deals. These deals have to be present with respect to the
theme associated for each day. Other than these days, foodpanda ACMs have to negotiate deals
with restaurants keeping in mind the trends of consumer buying behavior.
Deal planning is done with respect to the ratings of vendors at foodpanda. Vendors are given
ratings with respect to their performance over time. ACMs conduct meeting with restaurants, use
data from backend and check the trends famous over in the buying behavior of customers. If
customers have ordered a lot of Pizza, ACMs would plan on bringing deals of pizza restaurants
with the highest amount of discount. Likewise, this goes on for BBQ, Chinese etc. ACMs plan
the deals themselves with respect to the cuisine trends and go and make offers to restaurants. The

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restaurants agree to those deals and a marketing plan is likewise derived to market those deals
specifically if they belong to AAA rating vendors and/or carry a discount rate of 25% - 50% or
more.
Deal planning is also done by foodpanda with respect to the customer footfall in the area.
Consumer income spending plays an important role where higher discounts have been given
from restaurants in areas like Gulshan-e-Iqbal, Gulistan-e-Jauhar and North Nazimabad to have
lots of orders generated from people and play on volume as compared to restaurants in Defence,
Clifton and KDA where 10% discounts do the trick and generate a lot of orders for the company.
Another type of demand planning the company does include planning base on sales data. The
company looks at sales data and anticipates the number of orders that will be generated in the
upcoming month. It has data from all restaurants and likewise, it predicts an expected demand
and knows the footfall to the restaurants. This is the stage where the restaurant is planning to
cater to the demand. Here, it lets know the restaurant how many orders to expect in a month or
when a special deal is run live or a deal day occurs so that the restaurant is backed up with
inventory stock to cater the demand generated through foodpanda as well as have enough food to
cater its walk-in demand. Marketing plans are made with respect to the planning done on sales
data. It makes foodpanda figure out which deal to market and which cuisine to bring a deal on to
which customer in order to generate orders for foodpanda. Likewise, marketing plans are made
with respect to the importance of the deal. For example, they had offline billboards marketing in
place when The Great Pizza Festival was launched to promote the 50% discount on pizzas from
every restaurant under foodpanda. The number of orders generated was so high that they could
not cope up with the deliveries and hence had to suspend their services for a few hours. So
planning based on sales data is relatively important because it lets the company know how to
plan for the demand.
Seasonal planning includes making plans based on seasonal demands that arise due to seasonal
occasions like Eid-ul-Fitr, Ramzan, Mothers Day, Labor Day, and Valentines Day etc.
Seasonal deal planning is done way ahead of the arriving season and henceforth, marketing
activities are put in action to make the seasonal deals successful and generate revenue for
foodpanda. Moving on to supply planning, it includes all the processes that take place in order to
fulfill the demand that has been generated. This will include marketing to cater deals, purchasing
of inventory of restaurants and the ordering process. The SCOR model says that the supply
planning must be consistent with demand planning as here you are going to fulfill your demand
and if the planning for supply of demand is not good enough, the whole supply chain will
collapse. SCOR model lays emphasis on both supply and demand planning equally. If the
company does not know how to manage its supply process, it will not fully satisfy its customer,
and to satisfy its customer it needs to plan its supply process.
The supply planning carried out by foodpanda includes marketing to the customer. Foodpanda
believes that marketing is a crucial part of both demand and supply planning. The reason it is
important for supply planning is because until and unless marketing is done using the right
communication tools and mediums, the customer will not know the offerings of the company.
Unless the customer knows the deal offerings of the company, it will not generate any orders for
foodpanda. So supplying information comes under marketing for foodpanda and is part of the
supply planning process. Marketing for deals includes medium planning for marketing, updated
menus of restaurants on the foodpanda application and website, a working website and app that
does not crash when the customer places its order etc. Another part of supply planning is to

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ensure that your supply chain is perfect which will deliver the end product to the customer.
Being an online order business, foodpanda has to ensure that its vendor restaurants are ready to
cope up with the demand of orders and have the inventory in store (fresh) to deliver orders to the
customers. For this part of supply planning, foodpanda uses the data from backend software and
shares the analytics to the restaurants. The restaurants are told how many orders to expect off a
certain deal and all the demand planning data helps them know what to expect and plan
accordingly to cater those expected number of orders.
The most important part of the supply planning process is the online ordering process. This
process is the backbone of the supply planning of foodpanda, as it is the reason the company is
able to conduct its supply and earn revenue. The online ordering process is dependent on IT
systems that are integrated with the entire supply chain. Foodpanda has to make sure that its
online ordering process is hassle free at all times so the supply is smooth. For this, the company
is in constant contact with the foodpanda IT department in their global Germany head offices.
All planning related to the backend IT software and its associated IT programs are done in
Germany. Planning that includes how to keep the IT software running smoothly and not being
crashed to how to process orders all takes place in this process. The online ordering process is an
essential part of the supply planning as the process is what the company depends on for orders
and if the supply process is not smooth, the company will lose its customers.
Concluding the analysis on planning with respect to the SCOR model, the company has its own
measures to undertake planning and carries it out effectively with strategy. Strategic planning is
present with respect to the ongoing trends and the company has procedures to conduct thorough
demand and supply planning with respect to its business model. The whole business depends on
the planning process and the company has marked out the different types of planning it needs to
conduct to run its operations and the processes that follow to put those plans into action. The
company has effective plans both for its demand and supply in store to cater its customers and
satisfy them. However, foodpanda has a big vendor issue which will remain present only because
all its production of orders is outsourced. Relaying on vendor restaurants for delivery and food
quality is one big issue that they need to address. Foodpanda needs to have good relationship
with its vendors so that there are no customer dissatisfaction due to food quality and untimely
delivery issues or at the end of the day it will spoil the brand image of foodpanda.
It is important to note that foodpanda has attributed supply chain as the most important factor to
run a successful online food ordering business. Likewise, it has acknowledged the importance of
IT to link all the supply chain drivers to obtain maximum supply chain performance and it
implements it in its planning by integration of data from its vendors and customer on its IT
dashboard and using it to plan new policies or deals to cater its customers. The planning of the
company involves data input from customers and suppliers and helps them in making long-term
and short-term plans. The SCOR model also suggests that the linkages between supplier-retailer-
vendor-customers need to be strong and communicative in order to shorten the lead-time and
make an effective supply chain. Moreover, utilization of vendors in the design process of any
product (deals in the case of foodpanda) leads to effective product output as vendors (restaurants)
can tell what the customers are after and the customer feedback in the design process of deals
helps the company provide what is needed and wanted by the customer. For all this to be
possible, foodpanda has an effective communication model which is both one-way and two-way
over different mediums where the restaurants communicate with foodpanda, customers

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communicate with foodpanda, restaurants communicate with customers and customer drive the
market based on their communication.
4.1.2 Sourcing:
Manufacturing is a part of Sourcing for foodpanda as it does not manufacture food itself but
outsources the process as part of being an online ordering platform. Sourcing includes Vendor
Selection and Service Quality as the two major aspects for foodpanda. The manufacturing part
was explained in detail in supply planning as the order taking process and its backstage treatment
is part of the planning process a company has for its supply of services to the customer. The
SCOR model describes sourcing as the processes that help in the procurement of raw material
which would be used to make the product and manufacturing include the processes that start the
production of a product from raw material and change it to finished goods. For foodpanda, this
has changed a bit with respect to the business model of foodpanda.
Purchasing of raw material has been defined as vendor selection for foodpanda and making of
the entire product has been taken as Service Quality. The reason behind this is because being an
online food ordering business and not a usual manufacturing business, the dimensions of the
business model change and with it the processes change. The change in processes lead to
determination of different aspects to these variables. Sourcing, which would normally include
looking out for good vendors for raw materials, include vendor (restaurant) selection for
foodpanda as restaurants under foodpanda contract deal with the sourcing of raw materials and
then manufacture or produce food orders to deliver to the customers. And the manufacturing,
which is also a part of sourcing, includes making the product to the best of quality present and
hence includes service quality. Hence, sourcing for foodpanda includes vendor selection and
service quality.
The vendor selection criteria for foodpanda are very simple. Foodpanda analyzes the brand
image of a restaurant, its national or city-wide presence, its brand equity (food quality, service,
management, ambiance, its perception in the mind of the customer), the sales its generates, its
delivery service if any, its number of orders per month/per season/per demand, its offerings and
then makes an offer to the restaurant. The restaurant is promised marketing of its deals and an
online presence where the customer would see the restaurant but any orders are not promised. As
foodpanda, does not promise any orders, the restaurants are not charged for marketing via online
tools. The restaurants are signed up on a minimal 10% per sale commission basis and the
commission goes up as the performance of the restaurant with respect to the number of orders
goes up. Timely delivery of food and quality of food are two things foodpanda does not
compromise on and any restaurant under foodpanda contract has to conduct its operations in such
a way that these two factors are not compromised otherwise their contract is terminated if the
number of complaints against them are on a rise (Ahmed & Saeed, 2014).
The service quality is judged through a number of things at foodpanda. First of all, before
signing up as a vendor restaurant, the restaurant is asked for certification from the authorities
regarding food distribution and health certification. The restaurants are supposed to have an NTN
number and be a regular taxpayer of the FBR (if they fall under the required income bracket
liable to pay taxes). The service quality is judged on two basic things; delivery time and food
quality. Foodpanda takes immediate action on every complaint registered and deactivates the
restaurant if the number of complaints against the restaurant rise and the restaurant does not
change its policies. The company is extremely stringent on its policies for timely delivery and

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food quality as their image depends on customer satisfaction through those two factors. Service
quality is also measured through customer feedback. When a customer orders, a feedback email
is sent to the customer to get feedback based on the overall delivery service and experience for
ordering from foodpanda. The customer services department sees every customer response and if
there are any issues and complaints, they are dealt with immediately by the foodpanda customer
services department to ensure that the customer takes the order; the payment is made with
customer delight. The customers are given complementary food gifts sometimes just to create
customer delight if foodpanda is at fault in delivering the order. The customers have mediums to
communicate their feedback back through to the company. They can do this by using the
foodpanda App, website, live chat or through phone call. All this is monitored by foodpanda and
stringent action is taken on any complaint or review whether it is good or bad. In case of bad
reviews, the restaurant is notified to be careful next time because the public image of the
company is at risk. All the feedback data is also used to make deal planning or realize customer
buying behavior trends or customer delight trends or places where the customer was not satisfied
etc. to improve the supply chain and performance in the future.
Foodpanda being an online food ordering platform does exceptionally well with respect to
Sourcing as defined by the SCOR model. It needs to improve its vendor selection process and
take in reliable vendors that are licensed and registered from the existing food authorities in
Pakistan. Furthermore, it must keep have good brands under its portfolio in the many cuisines it
has to offer and promote all those good brands respectively in order to get more orders.
Managing service quality is an important part of manufacturing a product because it then has to
be delivered to the customer and if the customer is not happy, the company does not earn a good
review. Hence, risk of managing the service quality is always great due to outsourcing to the
restaurants.
4.1.3 Delivery
Delivery deals with the distribution and delivery of service to the customer. It consists of
distribution planning and processes that enable the company to deliver the product or order to the
customer in time. The SCOR model lays emphasis on the delivery aspect of a business, as it is
most crucial in determining the fate of the sale and the fate of the customer satisfaction. Delivery
encompasses the transition of goods and services from the place of manufacture into the hands of
the customer. It includes variables likes transportation and logistics, warehousing, retailing,
distribution system etc.
As described by the SCOR model, a companys distribution system must be strong enough to
deliver the desired product to the right customer in proper time and in manner. The distribution
system at foodpanda is complex and well balanced now with respect to the number of restaurants
in its wing. There are two stages of delivery service in foodpanda. The restaurants are divided in
to categories. The first category is labelled Stage One delivery system and it consists of all the
restaurants that have their own delivery services. The delivery process here is simple. Any order
for Stage One restaurants is dealt at the Backend IT system and transmitted to the restaurant
as soon as it is confirmed. The transmission is done through a GPRS printer installed by
foodpanda at the restaurant. The order is printed and acknowledged by the staff of the restaurant,
prepared and delivered through the restaurants own delivery service. The restaurant keeps the
money collected and with respect to a 10-day accounting cycle, the commission is paid to
foodpanda on the tenth day.

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Stage Two delivery service also known as the foodpanda delivery service is foodpandas in
house distribution system recently launched on April 27th 2015 at Movenpick Hotel, Karachi.
Here a team of 16 riders was hired for Karachi, 4 for Lahore and 10 in Islamabad with proper
teams to supervise such riders. The cities were divided into hubs and each hub was allotted two
cashiers each, one supervisor and a delivery rider fleet. This delivery service is dealt in
integration with Backend through V-Work IT system. When an order is generated of a
restaurant with no delivery service of its own, it is transferred from Backend to V-Work. This
is done because the dealings of such restaurants with respect to payments are different. When the
order is confirmed and transmitted to the restaurant, a rider leaves with PKR 3,000/- cash
towards the restaurant whose order was placed. The rider then purchases the order at the
restaurant and delivers it to the customer after adding the delivery charge. After delivery and
feedback from customer, the rider deposits the money from the order to the cashier in charge of
his specific hub. This is how the delivery services of foodpanda operate.
The distribution system does not end just with the delivery but at foodpanda the system
continues on to performance measurement of the delivery system, evaluation of delivery
personnel and incentive programs by the company to motivate its delivery service employees to
outperform every time and deliver as many orders as quickly as possible. Comparing it to the
requirements of the SCOR model, foodpanda has an excellent delivery service integrated with
technology and laced with its own customized IT system. The distribution system is divided into
two categories to avoid any complexities for the two different types of restaurants. From the
distribution system, to the backstage working of acceptance of orders, dispatching of orders and
categorization of orders in the MIS of foodpanda is in detail and shows how organized and well
planned the distribution system has been designed to operate. Limitations on foodpanda occur in
Stage One delivery system as the delivery service is outsourced (that of the restaurant) and
vendor relationships can play a crucial role in the quality of delivery service for foodpanda.
4.1.4 Enable
Enable includes technology implemented in order to make the business successful. This would
mainly include the platforms used by the business that are technologically linked and provide
help in managing the operations or the processes in the online ordering business.
Enable is a new variable in the SCOR model, which was introduced, in the 11th version of the
SCOR model in December 2012. Enable talks about something that drives the business to how it
operates. For foodpanda it is technology. Under SCOR model, we study how technology enables
it for foodpanda to conduct its operations and to what impact has technology impact the
operations of foodpanda. The SCOR model studies the significance of technology in the supply
chain of the particular business and how it is important to use that technology to integrate all the
drivers of the SCOR model for a sufficient supply chain system.
Technology at foodpanda is embedded across the supply chain. Its main function and operations
are run through IT systems and softwares named Backend and V-Work and the majority of
reason for that is the business model of the company, which is based online. Having an online
company changes the business model and brings technology on the forefront of the companys
supply chain. At foodpanda, the Backend and V-Work systems play a crucial role in
Planning, Sourcing, Delivery and Customer Feedback (Return). The systems are used to
communicate the product to the customer, to take order from the customer, to process the
customers order to the restaurant, to deliver the order to the customer all using IT. The data

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driven from all the SCOR drivers (Planning, Sourcing, Manufacturing, Delivery, Return, Enable)
is then used by the IT systems to determine demand, plan supply accordingly for the demand,
manufacture and source products and resources for the anticipated demand, deliver the expected
demand, get consumer feedback of the anticipate demand and use the results to calculate how to
effectively mold the current supply chain processes to cater the future demand. Technology plays
a crucial role in foodpanda right from planning to source to delivery and customer feedback
collection which all is generated in an MIS and used for further planning and the cycle continues.
Foodpanda believes that the supply chain of any business is its strongest standpoint of operations
and in order to be market leaders foodpanda has to effectively link its supply chain to each and
every stakeholder through technology.
5. CONCLUSION
The SCOR model has specific focus on laying out the processes and determining the
relationships that exist between every process. It focuses on customer interactions from any and
every service level, all the product transactions that take place from suppliers to customers and
all the market interactions that take place to fulfill the demand that has been generated by each
order. Applying the SCOR model on foodpanda made us aware of the business processes
employed by a certain online food ordering company who does not come specifically but can be
considered an integral part of e-commerce. The SCOR model helped us determine what business
processes are viable to the running operations of the business and play a key fundamental role in
the delivery of services to the business.
The insights gained from the interview lead us to conclude that foodpanda is a growing business
and has an emerging supply chain that will evolve with time, as its business processes become
more complex or increase. We conclude the fact that applying the SCOR model raised awareness
amongst us on how important and integral is supply chain of a company and how much balance
it provides to the company and how it manages to coordinate every department just to satisfy the
customer. Applying the four drivers of the SCOR model on foodpanda made us clarify the
companys distinct functions and how it helps in improving the performance of foodpanda. Our
main aim was to discover how these variables lead to the performance of a company and the
balanced planning, sourcing, well managed delivery distribution systems and the integration of
technology into the multiple functions of the company provide an overview on how the company
is improving its performance over time.
Foodpanda has good systems and strategies in place but it needs to work on raising awareness
about the brand in the country and increase its presence to more local cities. It should increase its
target market base, as the deals it offers are quite lucrative and economical. Foodpanda should
conduct a market test on the needs and wants of the customers once a while to gain feedback and
not rely on data that is received from customers who order foodpanda. A market test will make
understand the perception of foodpanda in the minds of foodpandas customer base and can help
the company plan it strategies the right way to focus on the customer correctly.

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