Approaches of McDonald’s for Capacity Management

This report discusses the approaches of McDonald’s for capacity management and the implementation of four Ds by McDonald’s restaurants. It also evaluates the five performance objectives of McDonald’s.

Managing Business
Operations

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Approaches of McDonald’s for Capacity Management ............................................................3
Implementation of Four Ds by the McDonald’s Restaurants ..................................................4
Five Performance Objectives .....................................................................................................5
Calculating the average number of customer which are arriving till average time.....................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Operation management is essential for the smooth functioning of the businesses and
enterprises. It consider as an administration of all the business operations and practices which
generate high level of efficiency that possible within an business organisation. To managing
business operation is essential for each and every organisation. With the help of useful resources,
maintain the supply chain , improve quality, are helpful to managing the business operations. For
this report, McDonald's organisation chosen that consider the most famous fast food chain of
America. It established in the year 1940 and the headquarter of this organisation in Chicago, US.
The main purpose of this report is to discuss about the approaches of McDonald’s and also
determine and implement four Ds by the McDonald’s Apart from this, evaluate the five
performance objectives that help to maintain the operational performance of the organisation.
TASK
Approaches of McDonald’s for Capacity Management
McDonald’s mainly use collaborative management approach that help to connect entire
national and international franchisees across the whole world under the one single organisation
name. Capacity management mainly affect whole areas of business operations. Basically
capacity measure and analyse the rate that all the operations can consider and transfer inputs inot
specific outputs (Balet, et. al., 2016). Capacity is like a quantity of specific products and services
that need to analysed within a proper time period. There is a need to maintain the capacity with
the managerial activities so that organisation easily balance the capacity management of the
McDonald’s .
Approaches of McDonald’s
There are various approaches which used by the McDonald’s so that organisation easily
manage the capacity and also reconcile the capacity and demand of the company. The
explanation of all the approaches are given below- Inventory & Production Management Approach – This service provide appraisal to the
retail, wholesale and manufacturing inventory. Inventory appraisal also include strategies
and risk analysis which help to maintain the inventory level. McDonald’s change the
whole methodology of the inventory and consider the modern techniques to manage the

inventory rather than traditional operational management techniques. McDonald’s now
consider production management approach to maintain the inventory. JIT Approach – Production management approach consider the Just -In- Time (JIT)
techniques which help to maintain the raw material and goods , which mainly used in
specific production stage. This approach help to save the cost of production and help to
decline inventory level. JIT mainly used “Pull Strategy” so that organisation easily
monitor the production (Barbosa, et. al., 2018). JIT help to reduce the inventory level in
the supply chains and also include the commitment of employees in context of
participation and involvement in the capacity management of the company. Capacity Level – Capacity consider the high level of output that McDonald’s can
sustain to prepare a product and give a service. To maintain the capacity level, its
necessary to contain all the limitations of production and management process of the
company. Capacity level help to maintain the capacity management so that McDonald’s
easily balance the capacity and demand of the products and services. Chase Demand – It refer as a strategy in which all the changes in products and services
are made to the result as per the demand of the company. It include matching the specific
demand from the hiring and firing the employees or by control and monitor the
production level and use inventory to monitor the changes in the level of demand
(Blagojevic, et. al., 2020).
 Management Demand – It consider the supply chain management process that help to
maintain the customers needs with the ability of the supply chain. The main motive of
this approach is to understand, analyse and influence the demand of customers and also
work the capacity management to make sure that the service provide the capacity to
accomplish this demand (Boahene, 2016).
Implementation of Four Ds by the McDonald’s Restaurants
The analysis and implementation of Four Ds are essential for the welfare of the
organisation. Through successful implementation of four Ds, McDonald’s easily maintain their
products and services activities in all the restaurants of the McDonald’s . The description of
four Ds as per the McDonald’s are given below- Design – In this first “D”, McDonald’s use to plan and design the strategies related to
products and services so that company easily accomplish the objective. McDonald’s

consider the time which is required for the specific design of the products and services.
McDonald’s includes some criteria as per the design such as prepare effective time
table & specific cycle of events, select actions to enhance the working relationship, build
track & capture information of products and services. Company design “ speedy service
system” which help to gain the customer satisfaction (Buttrick, 2018).Company mainly
designed the equipments & specific product specification, add cooking instruction
services for the good customer experiences. Direct – In second “D”, company provide proper direction of all the employees and staff
member so that they can easily manage the all operations of the company . McDonald’s
conduct many employee management activities so that company easily balance the
healthy relation with their employees so that employees can create good engagement with
the customers (Essila, 2019). Company provide the rewards and appraisals so that
company can increase the motivation level of employees and show them right direction. Develop –In this third “D”, McDonald’s focus on development of company products and
services and also employees. Company always consider some innovative products and
provide new food items to attract the people. Company work on their quality operations
so that company easily develop the high position of fast food retailer. McDonald’s
continuously improve and maintain the high quality of their products and also provide
good customer service which help in over all development of the company.
 Deliver - In this last “D”, Company concentrate on the delivery system and time to time
launch many strategies which help in delivery of the company. McDonald’s is a world
famous company which operating their business all over the world. Company mainly
focus on deliver the valuable products and services so that company can maintain their
market position as compared to their competitors like Burger King and KFC. Company
deliver quick services to their customers (Hadiguna and Tjahjono, 2017).
Five Performance Objectives
The performance objectives of the McDonald’s help to determine the over all operations
and help to maintain the performance level. The description of these five objectives are as
follows- Flexibility – This is consider the first objective in which, McDonald’s include those
factors which determine the over all performance of the company operations. Company

follow all the principles which help to obtain the vision, mission and goal of the
company. Company provide good flexibility to their employees in term of working
conditions and also give more flexibility to their customers so that they can take
advantage of company products and services on any time or anywhere (Issa, 2020). Customer Satisfaction - McDonald’s provide good quality of products which attract the
large number of customers and also keep maintain their quality and quantity level so that
company easily satisfy their customers needs and demand. McDonald’s mainly
concentrate on the satisfaction level of customers and consider that customer satisfaction
is the key of successful organisation. McDonald’s constantly enhance their customer
service through rapid and valuable delivery system so that company easily gain the
customer satisfaction. Customer Experience - McDonald’s trying hard to boost the experience level of
customers from each and every outlets of the company. To increase the experience level
of the customers, McDonald’s adopt the modern technology to promote an deliver the
products and services on the daily basis. McDonald’s conduct online advertisement
through digital marketing channels like Facebook, Instagram, Twitter, You tubes etc. so
that company easily promote their new food items and also deliver to their customers
effectively (Obeth, 2016). Through technologies and online channels, customers easily
interact with the company and also ask their doubt and queries. Apart from this,
customers easily give their feedback which help to increase the good experience level of
the customers. Cost - McDonald’s always concerned about the cost of their products because cost
consider as an significant aspects which help to deal with the large level of population.
The main purpose of the company is to charge suitable and pocket friendly to their
customers so that company easily take competitive advantage as compared to their rivals
that help to enhance the profit maximization so that company can generate more revenue.
Lower cost useful to improve the performance and productivity of the McDonald’s .
 High Quality Standard - McDonald’s focus on their quality level and follow high quality
standard so that company performance always manage. Company established a good
guidelines and policies related to the quality standard of the products and services and
specified that it is mandatory to follow all the policies and regulations to each and every

branches and outlets of the company. Company always conduct daily inspection and
check the quality of the food items time to time (Tran, 2020).
All the objectives of the McDonald’s give their proper contribution to improve the
performance of the company and also help to maintain the customer relation and services.
McDonald’s consider these objectives which useful to generate the appropriate impact on the
productivity of company so that company effectively get the loyalty of customers.
Calculation of Average Number of Customer Which are Arriving in Till Average Time
Average number of units in the system= u/(1-u)
= [5/ (1-5)]
= [5/-4]
= [-1.25]
= 1.25
Working Note -
u=ra/rs
=25/5
= 5
Average waiting time in the system= ts/(1-u)
= [5/ (1-1.25)]
= [5/-0.25]
= [-20]
= 20
Service rate= ts*12
= 5*12
= 60 Minutes
= 60 minutes per order
There are almost 20 people present as per the hour for the delivery of their products and services
which are present there for the orders. To decrease the waiting time, there is requirement to show
few improvement in the waiting time of the people which can be helpful to taking high level
delivery services that can help to maintain the large customers in limited time period. With the
help of technologies and other digital platforms, can help more to get the order and also help in
deliver the arrival customers so that they can save their waiting time and get deliver at a

minimum level of time. It is consider the big challenge to get the delivery in short time period
but company try hard to provide delivery to save the time of people because which lead the high
rate of satisfaction level of customers (Zhang, et. al., 2020). High customer satisfaction helpful
to increase the productivity level so that company easily gain the more profit and revenue.
CONCLUSION
As per this report it can be said that operational management is playing a prominent part
for the development of the company. In this report, useful approaches of the company consider
which help to maintain the over all capacity management of the company. This report identified
that inventory and production management , JIT are the main approach which company
contained. This report also discussed about the importance of 4 Ds of operational management
and explained that how company design and deliver their products. this report also determined
the objectives which help to enhance the performance level of company. Lastly, This report also
analysed the working conditions and also prepared the specific strategy to save the time of the
people during the order deliver time. Lastly ,

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