ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS.

Running head: ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
Analysis of service operations in McDonalds
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1ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
Executive Summary
Service operations analysis of this company will facilitate in analysing the ways in which the
company is employing its service operations strategies for transforming consumer experience,
enterprise efficiency and effectiveness by operational excellence. The report revealed that the
basic principles included within the service operations strategy of McDonalds is focused on
making continuous improvements in its service operations model through decreasing costs and
maintaining effective ordering processes in all its fast food joints. McDonald’s goal in
developing such service operations strategy will be to establish locations for maximum market
reach. The service offerings of the company must expand from restaurants and kiosks to websites
and mobile applications as venues.

2ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
Table of Contents
1. Introduction..................................................................................................................................3
2. Service Operations Model...........................................................................................................3
3. Service Operations Strategies in McDonalds..............................................................................6
4. Analysis of 5 Criteria in Service Operations...............................................................................8
5. Recommendations......................................................................................................................11
6. Conclusion.................................................................................................................................12
References......................................................................................................................................13

3ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
1. Introduction
McDonalds is positioned as an internationally leading food service organization. The
company operates in more than 3000 restaurants worldwide in more than 100 nations. The values
of this international fast food chain focus on delivering an exceptional restaurant experience an
along with that the suppliers, employees and owners of McDonalds work together in addressing
consumer needs through their competitive service model (Annualreports.com 2019). Service
operations analysis of this company will facilitate in analysing the ways in which the company is
employing its service operations strategies for transforming consumer experience, enterprise
efficiency and effectiveness by operational excellence. The objective of the report is to analyse
the service operations of McDonalds for attaining an insight of the competitive service strategies
implemented by company in attaining competitive advantages. Based on the analysis suitable
recommendations will be provided for the company that can facilitate in attaining service
operational excellence in its international business market.
2. Service Operations Model
For providing better and improved strategies to its customers, McDonald’s has changed
its service operations model in the recent times and both models are illustrated as follows:

4ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
Figure 1: Old service operations model of McDonald’s
(Source: Abdelhadi 2016)
Figure 2: New service operations model of McDonald’s
(Source: Abdelhadi 2016)
With the help of service process, it becomes easy for any organization to define its
service functioning and the way through which a customer perceives a service. For designing the
process, the organization needs to be aware of the inputs like staff, information and servicescape
of physical facilities. Secondly, the process is in which the actual service is managed where it is
possible to process even the customers. This results in added value for the customers in terms of
outputs (Bernardo et al. 2017).
McDonald’s followed a service process earlier (Figure 1), which focused on utilizing the
Fordism technique in specific assembly lines for manufacturing different burgers and preserving
them until ordered by customers. The staffs in the kitchen would transfer the orders then to the
front staffs and then to the customers. Despite the fact that this process assured minimum
cooking time after the customer orders, it resulted in waste along with compromise in product
freshness (Breidbach et al. 2018).

5ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
For maintaining minimum cooking times, McDonald’s still follows the assembly line
method in cooking; however, it has changed the process of burger-making into a high-capacity
method (Figure 2). In accordance with the existing process design, staff judges the current
demand and accordingly, orders are placed for maintaining inventory balance at a particular
level. The made-to-stock procedure assures maintaining the minimum cooking time along with
maintaining inventory during both peak and lean times. This has allowed McDonald’s in
reducing waste, assuring freshness and serving customers within 2.5 minutes. Since there is
absence of any customization in the method of preparation, the made-to-stock method has turned
out to be fruitful (Chen, Cheng and Hsu 2015).
For analyzing the service process that McDonald’s has adopted, various theories could be
linked. Depending on the type of products offered, the organization has a “Runners” service
process. This takes place when the staffs carry out standard actions continuously for arriving at
high volumes and the managers could estimate demand with precision. The recurring actions
enable McDonald’s in training staffs for working faster on production and hence, keeping up
with the fast food service concept (McDonald et al. 2017).
The above assists in describing the service operations model of McDonald’s in the form
of a commodity process, in which there has been higher volume per unit and lower process
variety. This method provides a benefit to the organization, which includes providing consistent
service quality utilizing the service staffs in a number of places. This assists McDonald’s in
keeping up its image of providing standardized global services (Raju, Singh and Tariyal 2015).
Finally, in the service process, the customers make interactions with majorly two types of
staffs, which include the staffs taking orders and the staffs handling the orders. They could be the

6ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
staffs in the “drive-thru” policy or the cashiers; however, they are the only individuals with
which the customers could be involved in interactions. The staffs in the kitchen assure quality of
product and preparation, preparation of food, forecast of demand as well as stock supplies and
assembling food for smooth flow of operations. The front staffs have to work in combination
with the back-office staffs to assure a flow in relation to stocking during peak and lean times,
specific customer orders and others (De Boeck et al. 2019).
The front staffs require dedicated training as well for customer service, since their job
design requires interaction with the customers. Along with this, they have to be fully aware of
the moods and mindsets of the customers. For example, a customer walking into a store of
McDonald’s expects quick services and while in queue, the front customer takes no more than
usual time for making decision. The staffs have to undertake additional steps for managing the
depleting mood of the next customer in place so that the customer satisfaction level could be
maintained effectively and they would make repeat purchases (DiPietro 2017).
3. Service Operations Strategies in McDonalds
McDonalds have developed effective service operation strategies for attaining
competitive advantages in the global competitive market place are explained under:
 McDonald service operations are relied on “Total Quality Management (TQM)” strategy
that serves as an effective service process for the company for integrating the quality
development, maintainice along with the quality improvement efforts of several groups
within the company (Abdelhadi 2016). This enables the production along with service at
the economic levels that ensures full consumer satisfaction. Through employing this
strategy, the objective of McDonalds is to offer consumers with exceptional quality

7ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
products along with maintaining high service standards. The TQM service operations
strategy facilitates the company to put high commitment to quality that is instilled to all
the service employees when they join the company.
 The service operations strategy of McDonalds is to implement the “Just-in-Time”
strategy following which they do not start cooking its orders till a consumer has placed
the order (Johnston 2015). The fast food chain is able to ensure exceptional service
delivery process through using efficient technologies like “bun toaster”. The company
maintains fast service to add value for its consumers through offering good quality food
at a lower cost.
 The basic principles included within the service operations strategy of McDonalds is
focused on making continuous improvements in its service operations model through
decreasing costs and maintaining effective ordering processes in all its fast food joints.
The company also aims for maintaining “Zero-effects” strategy that focuses on
continuous quality testing along with control so that defective products or consumer
services are identified in an immediate manner (Kanyan, Ngana and Voon 2016).
 Due to sluggish consumer service efficiency in McDonalds, the company faced the issue
of broken service and quarterly margin decline. After such shortfall in addressing
changing consumer expectations, the fast food chain focused on addressing such concerns
by implementing new service operations strategies in increasing its speed of services.
Such strategy required implementation of drive through windows, new preparation tables,
a “runner” position along with an ordering system (Koutroumanis and Dixon 2018). In
maintaining exceptional and competitive service operations, McDonald’s new ordering

8ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
system which offers personalized one-on-one service that directly enhances order
accuracy and organized services.
 Certain issues have been faced by McDonald in offering right and effective services to its
consumers (Kurtulmuşoğlu and Pakdil 2017). These issues were dealt by the company
through ensuring exceptional consumer service along with rethinking their existing
service operations strategy. Consumer service operations in all the joints of McDonalds
are improved by the company through introducing table service ordering kiosks. Such
consumer service operations accept debit and credit cards, android pay and apple pay.
Due to sluggish consumer service efficiency in McDonalds, the company faced the issue
of broken service and quarterly margin decline. After such shortfall in addressing
changing consumer expectations, the fast food chain focused on addressing such concerns
by implementing new service operations strategies in increasing its speed of services.
Such strategy required implementation of drive through windows, new preparation tables,
a “runner” position along with an ordering system (Koutroumanis and Dixon 2018).The
ordering service has been stressful in the fast food joints for over years that was
inconvenient for its consumers. Considering the same, implementing such automation in
the ordering system has facilitated the company in maintain exceptional hospitality
experiences.
4. Analysis of 5 Criteria in Service Operations
McDonald’s has set its performance objectives in a manner that it aids the business in
maintaining its position as the international leader of fast food business. For fulfilling its
objectives, the organization is segregated into a number of departments and all of them play
specific roles in the process of fulfilling the set objectives (Jayaram and Xu 2016). There are a

9ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
number of key performance objectives, which the organization depend on assuring that it fulfills
the daily needs of the customers.
Speed:
Speed represents the time taken for obtaining a response. This is a crucial criterion, since
it assists in responding quickly to the customers that enable them to receive the product or
service ordered. The speed to service the customers could ascertain whether they would make
repeat purchases from the organization. Over the years, McDonald’s has perfected “drive-thru”
policy, in which only 90 seconds are needed to serve a product to the customer either over the
counter or on the restaurant table; in case; it is a take-away purchase. Thus, the service delivery
speed helps McDonald’s to be the leading fast food restaurant in UK (Field et al. 2018). This is
in tandem with the customer satisfaction strategy of the organization via the speed of response.
Cost:
The minimization of cost is one of the significant targets of McDonald’s. The
organization makes fruitful strategies that assist in minimizing the overall operating costs of the
business. It has been observed that the competition in the UK fast food sector is immense and
thus, price wars are obvious. For staying in the business, the restaurant has to place additional
efforts for minimizing the manufacturing cost in order to sell products at cheaper prices while
ensuring profits. The cost leadership strategy has turned to be effective for McDonald’s, since it
has witnessed its major rivals suffering huge losses under normal market prices. The reason to
use this strategy is to obtain competitive edge in the UK market. Cost minimization takes place
owing to enhanced staff productivity, reliable suppliers and increased automation (Gao and Su
2017).

10ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
Quality:
The operational policy of McDonald’s emphasizes mostly on quality in its performance
objectives’ list. The organization believes that the customers deserve the highest quality products
so that they have minimum complaints. If there is nothing to complain about, the customers
would definitely be satisfied, which increases the chance of repeat purchase. As a result, it leads
to additional revenue generation for McDonald’s. In terms of operations, the organization assures
that the quality related to activities and processes is superior at all times and thus, it leaves no
room for mistakes (Han and Hyun 2017). The assumption here is that mistakes have adverse
impact on product quality along with rise in manufacturing cost. Hence, the restaurant could not
allow the mistakes to take place.
Flexibility:
From the perspective of the business model of McDonald’s, flexibility implies the
capability of changing an operation in a particular manner. Within the organization, there are
three forms of flexibility. The first form is mix flexibility, in which an operation results in
different products for providing choices to the customers. The second form is product or service
flexibility, in which McDonald’s generates new ideas that are included into producing a food
product or a service for increasing its attractiveness to the customers. The final form is volume
flexibility, in which the organization adjusts its levels of output for coping with the unexpected
demand changes (Heizer, Render and Munson 2016). All the flexibility forms are independent of
each other and it is noteworthy to mention that flexibility at McDonald’s raises the service
delivery speed, which leads to saving money and time.
Dependability:

11ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
Dependability signifies the act of the customers obtaining their services or products
within time. In the fast food sector, dependability has been an added benefit to the business
operations, since the customers do not wish to face inconvenience. Some of them are generally
under time constraint and hence, delay in a plate of food could cause significant irritation (Hill
and Hill 2017). Dependability has direct impact on sales volume, since the customers tend to
return to the restaurant knowing that the drink or food would be delivered timely and hence, they
would not have to waste time on the same.
5. Recommendations
Based on the analysis of the service operations in McDonalds certain effective
recommendations have been provided to the company that can facilitate it in attaining effective
consumer service in the competitive business market.
 In offering exceptional services to the global consumers the company must focus on
developing effective locations strategy. McDonald’s goal in developing such service
operations strategy will be to establish locations for maximum market reach. The service
offerings of the company must expand from restaurants and kiosks to websites and
mobile applications as venues. Through expansion of its service locations, the fast food
joint will be able to reach a huge consumer ways in both traditional and online mediums
(Wirtz and Zeithaml 2018).
 The process and capacity design of McDonald’s must be focused on attaining cost
minimization efficiency, which can support its exceptional service operations model. In
addition, the strategic decision area of service operations management of McDonalds
must focus on sustaining process efficiency along with adequate capacity in addressing

12ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
changing consumer demands. Implementing production line method within the service
delivery process can increase capacity and efficiency utilization. Supply chain
management of McDonalds must be developed for ensuring successful service operations
in the company.
6. Conclusion
The objective of the report was to analyse the service operations of McDonalds for
attaining an insight of the competitive service strategies implemented by company in attaining
competitive advantages. It is gathered from the report that McDonald’s followed a service
process earlier, which focused on utilizing the Fordism technique in specific assembly lines for
manufacturing different burgers and preserving them until ordered by customers. The staffs in
the kitchen would transfer the orders then to the front staffs and then to the customers. Despite
the fact that this process assured minimum cooking time after the customer orders, it resulted in
waste along with compromise in product freshness. McDonald’s has set its performance
objectives in a manner that it aids the business in maintaining its position as the international
leader of fast food business. Considering same, the process and capacity design of McDonald’s
must be focused on attaining cost minimization efficiency, which can support its exceptional
service operations model. In addition, the strategic decision area of service operations
management of McDonalds must focus on sustaining process efficiency along with adequate
capacity in addressing changing consumer demands.

13ANALYSIS OF SERVICE OPERATIONS IN MCDONALDS
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