This is a supply chain optimization case requiring candidates to evaluate four sourcing options (in-restaurant production, current plant expansion, new facility build, or third-party supplier) based on cost, quality, capacity, and strategic alignment. The recommended solution balances Hot Indian's strategic goals (Minneapolis ties, quality, growth capacity) with financial optimization, advocating for building a new facility that achieves the lowest cost-per-unit while maintaining quality control and supporting future expansion.
Our client is the CEO of the fast-food chain Hot Indian. Hot Indian brings in $3B in annual revenues around the U.S., with locations in most major cities. Started in Minneapolis as a small food truck in 2003, Hot Indian quickly became a local staple known for their quality of food, level of service, and distinctive “dance for 10% off” style gimmicks for customers. Hot Indian also keeps a lean menu, devised to keep operations simplified and allow for a Hot Indian location to have success in food courts, food trucks, and standalone locations alike. All restaurants are owned by the company, and each restaurant brings in about $1.5M in annual revenue at 20% operating income.
We have been hired to figure out where Hot Indian should source their chutney. Currently, Hot Indian sources all sauce from a company owned manufacturing plant in Minneapolis and distributes the sauces to all locations around the country. Hot Indian has 500 additional restaurant openings planned in the next three years, and the plant will be out of capacity for the additional volume within two years.