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GLM Project Report on McDonald

Submitted To: Ms Rajkumari Mittal

Submitted By:
Dinesh Kumar Kratika Mahendra Rupesh Kumar Chaturvedi Sushobh S Unnithan Swati Kumar

GLM Project on Mc Donald

Contents
Company Profile: ..................................................................................................................................... 3 History: .................................................................................................................................................... 3 Cold Chain Concept: ................................................................................................................................. 5 Vendor Selection: ..................................................................................................................................... 5 Vendors: .................................................................................................................................................. 6 Dynamix Dairy Industries (Supplier of Cheese): ........................................................................................ 6 Trikaya Agriculture (Supplier of Iceberg Lettuce): ..................................................................................... 7 Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of products including Fruit Pies) ................................................................................................................................................................ 8 Radha Krishna Foodland (Distribution Centres for Delhi and Mumbai)...................................................... 9 Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts) ................................. 10 Logistics Management ........................................................................................................................... 11 ACTIONS SPEAK LOUDER THAN WORDS ............................................................................................. 12 Packaging Material................................................................................................................................ 14 KEEPING SCORE - SUSTAINABLE PACKAGING FROM THE OUTSET ....................................................... 14 Environmental Management ................................................................................................................. 16 Conclusion ............................................................................................................................................. 18 References ......................................................................................................................................... 19

GLM Project on Mc Donald

Company Profile:
McDonald's is the world's leading fast-food retail service organization. They operate more than 32,000 restaurants in 117 countries on six continents. It is one of the world s most recognized and respected food brands. They have an unparalleled global infrastructure and competencies in restaurant operations, marketing and franchising. There are 32000 retail store serves more than 60 million people each day. More than 75% of McDonald restaurants worldwide are owned and operated by independent local men and women. Nine major markets for McDonald are Australia, Brazil, Canada, China, France, Germany, Japan, the United Kingdom, and the United States--accounts for 80 percent of the restaurants and 75 percent of overall sales. The vast majority of the company's restaurants are of the flagship McDonald's hamburger joint variety. Two other wholly owned chains, Boston Market (rotisserie chicken) and Chipotle Mexican Grill (Mexican fast casual), along with Pret A Manger (upscale prepared sandwiches), in which McDonald's owns a 33 percent stake, account for about 1,000 of the units.

History:
McDonald is world s most successful fast food retail chain; head quarter in Oak Brooks, IIinois, US. It has one philosophy that is One world, one Burger by which they wants to serve same quality of Burger all over the world. They are known as a very efficient fast-food delivery system and customized delivery. It has an excellent supply chain system throughout the glob and they called it is Cold chain . McDonald restaurants incorporated in the year of 1954 when Ray Kroc a 52 years old distributor of milk shake maker multimixer went to see MacDonalds brothers hamburger stall in California and he got to know that they were searching for worldwide franchisee for their store. He opens his first store at IIinois, USA. In the year of 1996 McDonald opened their first restaurants at Vasant Vihar, South Delhi. Starting with a joint venture with two Indians, now McDonald has more than 160 restaurants across the country.

McDonalds India Supply Chain:

GLM Project on Mc Donald

Supply Chain is one of the critical factors for the smooth functioning of any business. McDonald has unmatched Supply Chain Structure, which not just ensures on time delivery of raw materials and supplies to McDonalds but also enables it to cut down on its cost and maximize profitability along with maintaining highest quality standards of its products worldwide. McDonald s initiative to set up an efficient supply chain and deploy state-of-art technology changed the entire Indian fast food industry and raised the standards of performance to international levels. , McDonalds had been working on its supply chain even before it opened its first joint in the country. McDonalds, an international brand which was trying to make inroads into the country, developed its Indian partners in such a manner that they stayed with the company from the beginning. The success of McDonalds India was achieved by sourcing all its required products from within the country. To ensure this, McDonalds developed local businesses, which can supply it highest quality products. Today, McDonalds India works with 38 different suppliers on a long term basis and several other standalone restaurants for its various other requirements. McDonald s distribution centers in India are: y y y Noida and Kalamboli (Mumbai) in 1996 Bangalore in 2004 Kolkata (2007). (It is the latest one).

Supplier

Purchasing

Production

Distribution

End Customer

GLM Project on Mc Donald

This is the process how McDonald Supply chain works. Suppliers who supply the raw material for the restaurants bring their products to the internal supply chain of McDonald. Then the internal supply chain department buys that product and processed it and distribute to the distributors. The end customers get the processed food form the retailer. McDonald entered with its first distribution partnership agreement with Radha Krishna Foodland, a part of the Radha Krishna Group engaged in food-related service businesses. The association with Radha Krishna Foods happened in the month of July 1993, when it studied the nuances of McDonald's operations and requirements for the Indian market. As distribution centers, the company was responsible for procurement, the quality inspection program, storage, inventory management, deliveries to the restaurants and data collection, recording and reporting. Value-added services like shredding of lettuce, re-packing of promotional items continued since then at the centers playing a vital role in maintaining the integrity of the products throughout the entire 'cold chain'.

Cold Chain Concept:


Cold Chain was one of the unique concepts of McDonalds supply chain in India, on which it had spent more than six years to get the system into place. This system brought about the integrity between the supplier of raw material and the end consumers. It helps the farmers at one end who supplies the raw material required for the restaurants chain and customers at retail counters to get the highest quality food products, absolutely fresh and at great value. Through its unique cold chain, McDonalds has been able to cut down on its operational wastage, as well as maintain the freshness and nutritional value of raw and processed food products. This has involved procurement, warehousing, transportation and retailing of perishable food products, all under controlled temperatures.

Vendor Selection:
To maintain an efficient supply chain process selection of vendor is the foremost priority for any company. But in the case of food business it is very important to identify the right kind of vendors. McDonalds has some requirement for their vendors. McDonalds operates Cold Chain here for their entire supply chain system. Before getting a vendor they looked for some specific specialties of each vendor. They looked for: y y y Vendors quality management system Cold storage facility Transpiration facility

GLM Project on Mc Donald

y y y

Technology and infrastructure used by their suppliers Capability of meet their requirement Research and development center

These are the parameter by which they selected their vendors for their Restaurant chain in India. These are the very important factor to maintain the cold chain concept. There are other concern also associated with their vendors that is Safety and hygiene. McDonald has their own quality control department which controls the hygiene related issue of their vendors.

Vendors: Dynamix Dairy Industries (Supplier of Cheese):


Dynamix has brought immense benefits to farmers in Baramati, Maharashtra by setting up a network of milk collection centers equipped with bulk coolers. Easy accessibility of that milk collection center helps the farmers to earn some extra by market their surplus milk. The factory has: y Fully automatic international standard processing facility. y Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanized baby food, Which is essential for the Burger production. y Stringent quality control measures and continuous Research & Development y From farm two degrees Celsius in 90 minutes is the first step to quality. For example, the Rs 262-crore Dynamix Dairy Industries, located in Baramati in Pune district of Maharashtra, manufactures cheese slices for McDonald s at 10 metric tonnes per month. Dynamix has helped set up 15 bulk cooling centers throughout the district from which it purchases milk. Each cooling center, which is equipped with modern measuring and testing equipment and a large cooling tank, is not more than a few kilometers away from local dairy farms. A farmer can deliver milk even twice a day on his bicycle and get a printed receipt on the spot, which also lists the quality of the milk supplied by him as per fat content, color and solids content. If the milk is sub-standard or adulterated, it is rejected on the spot. A batch of milk can vary from one liter to 10 liters, or more. Each batch is mixed in one large stainless steel cooler and chilled immediately to two degrees Celsius to stop bacterial growth and preserve freshness. From this point onwards, until just before the burger is actually served in a McDonald s

GLM Project on Mc Donald

restaurant hundreds of kilometers away, the temperature is never allowed to increase. When the refrigerated milk arrives at the Dynamix plant at Baramati, the milk in every single tanker is thoroughly tested and rejected if found sub-standard, adulterated or contaminated. The sophisticated testing lab can check fat content with an accuracy of 0.1 per cent. It can even detect minute traces of pesticides or antibiotics administered to cows. This instant feedback and the rejection of the entire tanker-load forces farmers to follow the best practices in terms of animal husbandry, use proper feeds, cut down on the indiscriminate use of pesticides and animal medicines and completely stop even the slightest attempts at adulteration.

Trikaya Agriculture (Supplier of Iceberg Lettuce):


The implementation of advanced agricultural practices has enabled Trikaya to successfully grow specialty crops like iceberg lettuce, special herbs and many oriental vegetables. These vegetables are used in production of Burger. The organic foods or vegetables are directly used in a process of burger. So the farm infrastructure and maintenance should be a big concern for McDonald. Their green vegetable supplier s infrastructure includes: y A specialized nursery with a team of agricultural experts. y Drip and sprinkler irrigation in raised farm beds with fertilizer mixing plant. y Pre-cooling room and a large cold room for post-harvest handling. y Refrigerated truck for transportation. Trikaya Agriculture, a major supplier of iceberg lettuce to McDonald's India. It is one such enterprise that is an intrinsic and very important part of the cold chain. Exposure to better agricultural management practices and sharing of advanced agricultural technology by McDonald's has made Trikaya Agriculture extremely conscious of delivering its products with utmost care and quality. Initially lettuce could only be grown during the winter months but with McDonald's expertise in the area of agriculture, Trikaya Farms in Talegaon, Maharashtra, is now able to grow this crop all the year round. McDonald's has provided assistance in the selection of high quality seeds, exposed the farms to advanced drip-irrigation technology, and helped develop a refrigerated transportation system. These assistance from McDonald helps a small agri-business in Maharashtra to provide fresh, high-quality lettuce to McDonald's urban restaurant locations thousands of kilometers away. Post-harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room to remove field heat. A large cold room and a refrigerated van for transportation where the temperature and the relative humidity of the crop is maintained between 1 C and 4 C and 95% respectively. Vegetables are moved into the

GLM Project on Mc Donald

pre-cooling room within half an hour of harvesting. The pre-cooling room ensures rapid vacuum cooling to 2 C within 90 minutes. The pack house, pre-cooling and cold room are located at the farms itself, ensuring no delay between harvesting, pre-cooling, packaging and cold storage. Trikaya Agriculture has also a plan to export this high value product to other international markets, especially to McDonald's Middle East and Asia Pacific operations because of their high quality pre-cooling storage facility, extensive packaging and transportation system. McDonald's expertise in packaging and long-distance transportation has helped Trikaya to do trial shipments to the Gulf successfully. In addition to export, McDonald's assistance has enabled Trikaya Agriculture to supply this crop to a number of star-rated hotels, clubs, flight kitchens and offshore catering companies all over India.

Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of products including Fruit Pies)
Vista processed foods pvt ltd is a joint venture with OSI Industries Inc., USA which is specialized of raw chicken, beef, pork and frozen foods in USA. McDonald's India Pvt. Ltd. and Vista Processed Foods Pvt. Ltd., produces a range of frozen chicken and vegetable foods. A world class infrastructure at their plant at Taloja, Maharashtra, includes: y Separate processing lines for chicken and vegetable foods. y Capability to produce frozen foods at temperature as low as -35 Degree Celsius to retain total freshness. y International standards, procedures and support services. Vista Processed Foods Pvt. Ltd., McDonald's suppliers for the chicken and vegetable range of products, is another important player of this cold chain. Technical and financial support extended by OSI Industries Inc., USA and McDonald s India Private Limited helps Vista to set up world-class infrastructure and support services. This includes hi-tech refrigeration plants for manufacture of frozen food at temperatures as low as - 35 C. This is vital to ensure that the frozen food retains it freshness for a long time and the 'cold chain' is maintained. The frozen product is immediately moved to cold storage rooms. With continued assistance from its international partners, Vista has installed hi-tech equipment for both the chicken and vegetable processing lines, which are reflects the latest food processing technology. They have the latest food processing technology which helps them to processed de-boning, blending, forming, coating, frying and freezing. For the vegetable range, the latest vegetable mixers and blenders

GLM Project on Mc Donald

are in operation. Also, keeping cultural sensitivities in mind, both processing lines are absolutely separated from each other and utmost care is taken to ensure that the vegetable products do not mix with the non-vegetarian products. Now, at Vista, a very wide range of frozen and nutritious chicken and vegetable products is available. Ongoing research and development, both locally and in the parent companies, work towards innovation in taste, nutritional value and convenience. Vista foods Pvt ltd also supplies their products to the star-rated hotels, hospitals, project sites, caterers, corporate canteens, schools and colleges, restaurants, food service establishments and coffee shops apart from McDonald restaurants. Because of their nutritious and freshness of their processed foods the company is highly appreciated across the food industry.

Radha Krishna Foodland (Distribution Centres for Delhi and Mumbai)


Radhakrishna Foodland an integral part of the Cold chain supply process which is specializes in handling large volumes, providing the entire range of services including procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting. The strengths of Radhakrishna food lad are: y A one-stop shop for all distribution management services. y Dry and cold storage facility to store and transport perishable products at temperatures up to -22 Degree Cel. y Effective process control for minimum distribution cost. McDonald's local supply networks through Radhakrishna Foodland, which operates distribution centres (DCs) for McDonald's restaurants in Mumbai and Delhi. The distribution centers have focused all their resources to meet McDonald's expectation of 'Cold, Clean, and On-Time Delivery . It also plays a very vital role in maintaining the integrity of the products throughout the entire 'cold chain' process. Ranging from liquid products coming from Punjab to lettuce from Pune, the distribution centers receives items from different parts of the country. These items are stored in rooms with different temperature zones and are finally dispatched to the McDonald's restaurants on the basis of their requirements and demands. The company has both cold and dry storage facilities with capability to store products up to -22 C as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state.

GLM Project on Mc Donald

Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts)
Amrit Food, an ISO 9000 company, manufactures widely popular brands Gagan Milk and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh. The factory has: y State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene. y Installed capacity of 6000 liters/hr for producing homogenized UHT (Ultra High Temperature) processed milk and milk products. y Strict quality control supported by a fully equipped quality control laboratory. All suppliers adhere to Indian government regulations on food, health and hygiene while continuously maintaining McDonald's recognized standards. McDonald has very efficient Quality control program which certifies the products which comes from their supplier to the distribution center. McDonald's Quality Inspection Programme (QIP) carries out quality checks at over 20 different points in the Cold Chain system. Setting up of the Cold Chain has also helps it to cut down on operational wastage. Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety that emphasizes prevention within its suppliers' facility and restaurants. Based on HACCP guidelines, control points and critical control points for all McDonald's major food processing plants and restaurants in India have been identified. The limits have been established for those followed by monitoring, recording and correcting any deviations. The HACCP verification is done at least twice in a year and certified.

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GLM Project on Mc Donald

Logistics Management
As we might imagine, Mc Donald s supply chain is extensive and complex. It s also very efficient, which is why they are able to consistently offer their customers safe and quality food at an affordable price. But there s more to the equation. They strive to ensure that every step of the McDonald s supply chain contributes positively to the safety, quality and availability of their final products. They also want their product ingredients to be produced in ways that contribute positively to the development of sustainable agricultural and food manufacturing practices.

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GLM Project on Mc Donald

Since McDonald s does not actually produce any of the food they ultimately serve their customers, it s essential that they work with suppliers who share their values, and they do. They have a large number of direct suppliers companies that make or deliver final products for their restaurants as well as an even larger number of indirect suppliers companies and farms that grow or process the ingredients that are eventually delivered to their direct suppliers. They work closely with their direct suppliers to continuously improve the practices that impact their employees, their communities, the environment, their own suppliers and, of course, their customers. Examples of this type of work include their Social Accountability program and their Environmental Scorecard. Reviews of adherence to these programs, and others related to sustainable supply, are included in McDonald s Supplier Performance Index - the primary evaluation tool used to evaluate their suppliers overall performance in serving McDonald s needs. Their suppliers are expected to share and apply their vision of sustainable supply to their own suppliers (their indirect suppliers). They also ask them to help them understand industry-wide sustainability challenges and opportunities related to the ingredients they use to make their products. They don t have direct control over those issues, but they can use their size and recognized brand to be a positive influence by raising questions, bringing people to the table and encouraging improvement. ACTIONS SPEAK LOUDER THAN WORDS They have been developing and implementing a range of sustainable practices in their supply chains for many years. Some recent accomplishments include:
y

Completion of a comprehensive Sustainable Land Management Commitment, developed in partnership with World Wildlife Fund, that summarizes their commitment to work with suppliers toward the goal ensuring that agricultural raw materials for their products originate from legal and sustainably managed land sources. In 2009, more than 98% of their fish was sourced from fisheries with favorable sustainability ratings. And 100% of the 500 approved abattoirs (animal handling facilities) in their supply chain were audited for animal welfare in 2009, and 100% of those passed their audits. 2010 was a critical year in the development of their Supplier Environmental Scorecard. They transitioned from a manual process to one that uses a software database system that is also used for their Supplier Workforce Accountability program. It was required

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GLM Project on Mc Donald

that their suppliers for the top six categories (beef, poultry, packaging, toys, potatoes and buns) would provide online data for the top nine markets. y McDonald s Europe launched Flagship Farms, a program designed to share and promote best practices in sustainable agriculture. Other recent progress and best practices related to environmental sustainability are profiled on their Best of Green and Best of Sustainable Supply website, including supplier leadership examples. Some of the most recent winners of local Sustainable Supplier Awards include: Canada: Pride Pak, McCain U.S.: Smithfield, Keystone and Cargill Europe: Seda, HAVI Global Logistics, McCain and Cargill We also know there is much more to do. We will continue to work with our direct suppliers, advisors and relevant industries to make sure our suppliers are aware of the importance of sustainability. We also continue to support the development of multi-stakeholder efforts that promote more sustainable raw material production.
y y y

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GLM Project on Mc Donald

Packaging Material
Why not make it sustainable from the outset? That s the goal with their packaging. McDonald s is implementing a global packaging scorecard to better inform the decisions they make about packaging. The scorecard builds on best practices from their European and North American markets, as well as advice from outside experts and NGOs such as the Environmental Defense Fund. The scorecard framework focuses on their key environmental priorities for packaging:
y y y y y y

Minimizing weight Maximizing use of recycled materials Preference for raw materials from third-party certified sources Minimizing the amount of harmful chemicals used in production Reducing CO2 and other greenhouse gas emissions Maximizing end-of-life options such as recycling.

The McDonald s System is one of the world s largest purchasers of recycled paper. They use it in their tray liners, napkins, bags, sandwich containers and other restaurant materials such as shipping containers. Today, approximately 80% of the consumer packaging used in their eight largest markets is made from renewable (paper or wood-fiber) materials, and nearly 30% of consumer packaging is made from recycled materials. This is down from 30.8% in 2008, due in part due to their changing materials used for carryout bags in Europe. Also they improved the graphic appearance of some sandwich clamshells in the U.S., which increased their weight (thereby decreasing the overall percentage of recycled material), although the actual weight of recycled materials was not reduced. In the U.S. alone, the McDonald s System purchased more than $345 million in recycled materials in the U.S. for the consumer packaging category in 2009. KEEPING SCORE - SUSTAINABLE PACKAGING FROM THE OUTSET Across the McDonald s System, they continue to find ways to reduce the packaging impacts of specific McDonald s menu items. Here are a few recent examples: Brazil - An operational mandate of giving each customer two napkins was changed to providing each customer with one. This resulted in a savings of approximately 1088 tons of napkin materials. Europe - In 2009, McDonalds France introduced its frappe cup and lid made out of 40% recycled PET (rPET). By using recycled materials, this reduces the amount of virgin resin needed by 123 metric tons, while at the same time, reducing waste land filled by an equivalent amount.

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GLM Project on Mc Donald

USA - McDonald s supply chain partner HAVI Global Solutions identified the potential to achieve cost savings and deliver environmental benefits while maintaining performance and premium product image by transitioning to a plastic material called Clarified Polypropylene (CPP) from Polyethylene Terephthalate (PET). The CPP package delivers the same consumer experience while using 20% less material as compared to PET. Less material use per cup drove cost reduction of 15% as well as reduced inputs of raw materials and energy and generated 20% less solid waste. Cup transition began in 2009 and continued in 2010. Australia - Currently, all PET cups contain a minimum of 35% recycled PET (rPET). In 2009, McDonald's Australia introduced a lighter weight McFlurry spoon for use in Australia and New Zealand. This reduced the amount of polypropylene resin needed by more than 31 tons. Many other examples were captured in their catalog of environmental practices, the McDonald's 2010 Global Best of Green e-book, including Japan s unbleached bag, France s Crosillon Meal carrier, and China s Olympics promotional packaging.

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GLM Project on Mc Donald

Environmental Management
We ve long recognized the value of minimizing our environmental footprint. It s not only good for the world in which we operate, it s a strong contributor to our long-term financial success. More than 30 years ago, we initiated energy conservation measures. In 1990, we formally established our Global Environmental Commitment and forged a groundbreaking alliance with the Environmental Defense Fund. During the 1990s alone, we eliminated 300 million pounds of product packaging by redesigning and reducing materials. Since then, we ve continued to seek ways to improve our environmental performance. Efficiency and innovation are natural byproducts of thinking green. After all, when we conserve energy, produce less waste and minimize resources used by our suppliers, we use less and spend less.

Given our decentralized structure, and the variability of environmental issues across regions, there is no one size fits all approach. We see this as a benefit, because we have a virtual laboratory of environmental initiatives across our marketplace that we can learn from, share and scale when it makes sense. Given the breadth and scope of our business operations, we also need to understand what is most important from a global standpoint. At the restaurant level, we are focused on three areas: Energy conservation Find further ways to increase energy efficiency in our restaurants in order to save money and reduce our environmental impacts Sustainable packaging and waste management Continue exploring ways to reduce the

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GLM Project on Mc Donald

environmental impacts of our consumer packaging and waste in our restaurant operations Green building design Enhance our strict building standards to incorporate further opportunities for environmental efficiencies and innovation in the design and construction of our restaurants On all of these priorities, we continue to engage with experts and NGOs like World Wildlife Fund, Conservation International, Environmental Defense Fund, the U.S. Green Building Council and similar organizations around the world to get their best thinking on how we can improve our environmental performance.

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GLM Project on Mc Donald

Conclusion
McDonald operates an excellent supply chain system throughout the country. The supply chain system not only helps the McDonald but it also improves the relationship between McDonald's and its Indian suppliers. The supply chain system is equally beneficial of both the party McDonald as well as its local suppliers. As McDonald's expands in India, the supplier gets the opportunity to expand his business, have access to the latest in food technology, exposure to advanced agricultural practices and the ability to grow or to export. There are many cases of local suppliers operating out of small towns who have benefited from their association with McDonald's India.

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GLM Project on Mc Donald

References
http://www.articlesbase.com/
http://www.mcdonaldsindia.com/aboutus.html

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