National Institute Of Fashion Technology, Jodhpur

An Exhaustive Study of Food Retail Organization on McDonald's Supply Chain Process

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Supply-Chain Management

PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e
PowerPoint slides by Jeff Heyl

2011 Pearson Education, Inc. publishing as Prentice Hall

Supply-Chain Management
The objective is to build a chain of suppliers that focuses on maximizing value to the ultimate customer

2011 Pearson Education, Inc. publishing as Prentice Hall

The Supply Chains Strategic Importance

Supply chain management is the integration of the activities that procure materials and services, transform them into intermediate goods and final products, and deliver them through a distribution system

Competition is no longer between companies; it is between supply chains

Supply Chain Management

Important activities include determining
1. Transportation vendors 2. Credit and cash transfers 3. Suppliers 4. Distributors

5. Accounts payable and receivable

6. Warehousing and inventory 7. Order fulfillment

8. Sharing customer, forecasting, and production information

2011 Pearson Education, Inc. publishing as Prentice Hall

A Supply Chain for Beer

2011 Pearson Education, Inc. publishing as Prentice Hall

Figure 11.1

How Supply Chain Decisions Impact Strategy

Low-Cost Strategy Suppliers goal Supply demand at lowest possible cost (e.g., Emerson Electric, Taco Bell) Select primarily for cost Response Strategy Differentiation Strategy Respond quickly Share market to changing research; requirements jointly develop and demand to products and minimize options (e.g., stockouts (e.g., Benetton) Dell Computers) Select primarily for capacity, speed, and flexibility Select primarily for product development skills

Primary selection criteria

2011 Pearson Education, Inc. publishing as Prentice Hall

Table 11.1

Supply Chain Risk

Mitigate and react to disruptions in
1. Processes 2. Controls 3. Environment

2011 Pearson Education, Inc. publishing as Prentice Hall

Supply Chain Risk

Reducing risk in supply chains
Process risk at McDonalds

Process risk at Ford

Controls at Darden Restaurants Control risk at Boeing Environmental risk at Hard Rock Caf Environmental risk at Toyota

2011 Pearson Education, Inc. publishing as Prentice Hall

Supply Chain Economics

Supply Chain Costs as a Percent of Sales

Industry All industry Automobile Food Lumber Paper Petroleum Transportation

2011 Pearson Education, Inc. publishing as Prentice Hall

% Purchased 52 67 60 61 55 79 62
Table 11.3

McDonald's Supply Chain

An Overview:
A unique sense of dedication and commitment characterizes McDonald's India a commitment to be driven by the leadership of local owners. Commitment to provide quality products and fast friendly service at a real value to support other Indian businesses through local sourcing and imparting new skills and to generate local employment by being a part of the local culture.

 This commitment has translated into enduring benefits to the businesses at the grass root level, in the areas of introduction of new crops, new agricultural practices and food processing methods and procedures.

 McDonald's unique 'cold chain', on which the QSR major has spent more than six years setting up in India, has brought about a veritable revolution, immensely benefiting the farmers at one end and enabling customers at retail counters to get the highest quality food products, absolutely fresh and at great value.

 McDonald's, through its unique cold chain, has been able to, both 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.

Flow Chart of McDonald's Supply Chain

 A McDonald's burger is not just a burger but an outcome of dedicated efforts by farmers, its Suppliers, distribution centre and a firm promise by McDonald's. McDonald's contributes a great back end process which enables you to enjoy your favorite burger fresh & hot, and for that, the supply chain truly acts as a backbone of the business.

Description of Supply Chain Process:

Description of above flow chart of MC Donalds Supply Chain management are below as: Agriculture Processing: The supply chain starts at the grass root level. With the suppliers receiving the crop from the farmers, which is first step or work, has been process in supply chain management in McDonald's.

 Food Processing Technology: After receiving the crop from the farmers, this is sent for processing in processing unit. After processes the crops, it has been dispatched to the Distribution centres with the help of special temperature controlled trucks, or transportation which is specially manufactures by organization.

 This ensures that the quality of the items is not compromised and it has been came in Distribution centre without any mismatch and direct to farmers with being processed in processing unit and came in Centralized distribution.

Store and Dispatching Execution: After coming the Centralized distribution 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 with the help of special temperature controlled trucks, or transportation.

 Integration and Distribution: McDonald's expectation of 'Cold, Clean, and On-Time Delivery' plays a very vital role in maintaining the integrity of the products throughout the entire 'cold chain'. This is back bone of McDonalds and also helps it to keep the continue image of fast food of retail in people mind.

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