{"id":23631,"date":"2017-11-15T15:11:55","date_gmt":"2017-11-15T20:11:55","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/some-like-it-hot-new-startup-can-deliver-your-pizza-in-4-minutes\/"},"modified":"2017-11-15T15:11:55","modified_gmt":"2017-11-15T20:11:55","slug":"some-like-it-hot-new-startup-can-deliver-your-pizza-in-4-minutes","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/some-like-it-hot-new-startup-can-deliver-your-pizza-in-4-minutes\/","title":{"rendered":"Some Like it Hot: New Startup Can Deliver Your Pizza in 4 Minutes"},"content":{"rendered":"

America\u2019s Favorite Food<\/strong><\/p>\n

According to research conducted by the U.S. Department of Agriculture, pizza is America\u2019s favorite food. From 2007 to 2010, researchers examined the diets of 17,571 study participants and determined that approximately \u201c13% of the U.S. population aged 2 and over, consumed pizza on any given day.\u201d [1] While food industry trends would suggest that the pizza industry will shrink as it loses share to healthier food categories, the $45 billion North American pizza industry is expected to grow 7.4% through 2020. [6].<\/p>\n

Automating Pizza<\/strong><\/p>\n

Zume Pizza, a Silicon Valley startup founded in 2016, is committed to disrupting the supply chain of America\u2019s favorite food through the use of robots and automation. In the beginning, the startup focused on highly-repetitive tasks that were low-skilled or dangerous. For example, the startup used its pizza-making robots to apply pizza sauces and place pizzas in an 800 degree oven. [7] According to the CEO, Julia Collins, the tech-enabled delivery-only company has become so efficient that it can create a pizza in 22 seconds [5].\u00a0 Further, these efficiencies helped Zume deliver over 10,000 pizzas in the six months since its launch. [7] But the company did not stop there. In September 2016, Zume rolled out a pizza delivery van equipped with 56 ovens that allowed the company to cook pizzas while travelling to customers. [7] Since then, the company has raised over $48 million in funding, added a \u201cDoughbot\u201d designed to replace a dough spinner, and expanded geographically. [3]<\/p>\n

\"\"<\/a>
Example of Zume’s Pizza Robot<\/figcaption><\/figure>\n

Zume\u2019s Supply Chain<\/strong><\/p>\n

The key to Zume\u2019s business model is a decentralized pizza supply chain that allows the company to act more nimbly and take advantage of customer demand patterns. [3] Typically, pizzas are cooked in a brick-and-mortar retail location that delivery vehicles drive from to deliver pizzas to customers. Notably, these delivery vehicles will be empty once their deliveries are complete. Under the Zume model, the delivery vehicle is a relocatable kitchen that can be moved around based on projected demand. Zume is creating a world where your anchovy and strawberry pizza can be ordered and delivered in the four minutes before the start of Monday Night Football.<\/p>\n

\"\"<\/a>
Comparison of Pizza Supply Chains<\/figcaption><\/figure>\n

Challenges<\/strong><\/p>\n

Despite such innovation, challenges remain. Instead of the empty pizza vehicles being the bottleneck in the process, the central hub of robots is the bottleneck. [3] The only way to improve this is to increase the efficiency of the process through additional robots. These robots can cost up to $100,000 each on top of the cost of ownership for its vehicles. Under its asset-heavy financing model, the amount of money raised by Zume is a key constraint in its ability to scale. [2] In a highly competitive industry, where the top 50 pizza chains had nearly $25 billion of 2016 sales, Zume would largely be outmatched if the industry decided to emulate its automation best practices. [6] Notably, in August 2017, Domino\u2019s and Ford announced a partnership to test self-driving delivery vehicles in Michigan. [4]<\/p>\n

Further, Zume has to contend with critics who suggest that their disruption of the industry will take jobs away from low skilled workers. In the beginning, the startup needed six workers in its kitchen but now predicts that it will only need two \u2013 one for slicing and preparing toppings and the other for quality control. Collins believes that the key minimizing the impact of automation in the pizza industry is to retrain people for jobs that maximize their \u201ctalent.\u201d [5] Notably, the company employs only full time workers and believes that automation will help provide access to high-quality, affordable meals. [8]<\/p>\n

Looking Ahead<\/strong><\/p>\n

In a recent interview at Disrupt San Francisco, Collins suggested that Zume\u2019s future is not focused on simply disrupting the pizza industry but rather disrupting the food industry \u00e0 la Amazon and brick-and-mortar commerce. The Company chose pizza as a first step but will seek to automate more repetitive and dangerous food processes in the greater food industry.<\/p>\n

Final Thoughts<\/strong><\/p>\n

Even though Zume Pizza has made significant progress in the digitization of the pizza supply chain, several questions remain:<\/p>\n

    \n
  1. Does Zume Pizza taste good?<\/li>\n
  2. Will Zume be able to capture significant market share from the dominant players in the pizza delivery industry?<\/li>\n
  3. Will displaced workers be able to find the training necessary for higher-skilled, automation-proof jobs?<\/li>\n<\/ol>\n

    Word Count: 724<\/strong><\/p>\n

    References<\/strong><\/p>\n

    [1] Ars.usda.gov. (2017).\u00a0Consumption of PizzaWhat We Eat in America, NHANES 2007-2010. Available at: https:\/\/www.ars.usda.gov\/ARSUserFiles\/80400530\/ pdf\/DBrief\/11_consumption_of_pizza_0710.pdf [Accessed November 2017].<\/p>\n

    [2] Economist.com. (2017).\u00a0Technology firms may struggle to disrupt the food business<\/i>. Available at: https:\/\/www.economist.com\/news\/business-and-finance\/21710766-zume-tries-reinvent-americas-34bn-pizza-business-one-robot-time-technology-firms-may [Accessed November 2017].<\/span><\/p>\n

    [3] Mannes, J. (2017).\u00a0Zume Pizza adds extra automation as it rolls out to new\u00a0cities. TechCrunch. Available at: https:\/\/techcrunch.com\/2017\/06\/28\/zume-pizza-adds-extra-automation-as-it-rolls-out-to-new-cities\/ [Accessed November 2017].<\/p>\n

    [4] Media.ford.com. (2017).\u00a0Domino’s and Ford Begin Consumer Research of Pizza Delivery Using Self-Driving Vehicles | Ford Media Center. Available at: https:\/\/media.ford.com\/content\/fordmedia\/fna\/us\/en\/news\/2017\/08\/29\/dominos-ford-begin-research-pizza-delivery.html [Accessed November 2017].<\/p>\n

    [5] Mercurynews.com. (2017).\u00a0Zume Pizza: Mountain View startup uses robots, smart ovens. Available at: http:\/\/www.mercurynews.com\/2016\/09\/29\/zume-pizza-startup-robots\/ [Accessed November 2017].<\/p>\n

    [6] Pmq.com. (2017).\u00a0Pizza Power Report 2017 | PMQ Pizza Magazine. Available at: http:\/\/www.pmq.com\/December-2016\/Pizza-Power-2017-A-State-of-the-Industry-Report\/ [Accessed November 2017].<\/p>\n

    [7] Taylor, H. (2017).\u00a0Inside the pizza chain that’s replacing chefs with robots. CNBC. Available at: https:\/\/www.cnbc.com\/2016\/09\/29\/inside-the-pizza-chain-thats-replacing-chefs-with-robots.html [Accessed November 2017].<\/p>\n

    [8] The Verge. (2017).\u00a0Zume\u2019s robot pizzeria could be the future of workplace automation. Available at: https:\/\/www.theverge.com\/2017\/6\/28\/15882852\/zume-pizza-doughboy-robot-automation-future-food-delivery [Accessed November 2017].<\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

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