McDonald's Strategies for Minimizing Mistakes and Improving Operations

McDonald's, a leading fast-food chain, has been facing challenges in maintaining its competitiveness and minimizing food waste. To address these issues, the company has taken steps such as using organic oil and veggies, recycling cooking oil, and implementing an integrated production system. However, it also faces weaknesses like low technology upgradation, outdated processes, and intense competition from other brands. It is suggested that McDonald's develop new strategies, adopt modern technologies, and improve its operations to maintain long-term success.

Business Report
(Mc Donald's)
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TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
An analysis of Mc Donald's operations ......................................................................................3
Recommendations for reducing the amount of food wastage......................................................8
Conclusions and Recommendations indicating strengths and weaknesses of operations...........9
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To- The CEO Of Mc Donald's
From- XYZ
Date- 8, December, 2015
Subject- A brief description and analysis of operations of Mc Donald's
INTRODUCTION
Mc Donald's is a leading chain of fast food providing fast food and drinks to wide range
of customers. Presently, company is providing its services in 119 countries with more than 35000
outlets. The organization serves to wide range of consumers and its food, services are
appreciated and loved by all (Cantor and Macdonald, 2009). For instance, parents like Mc
Donald's as its favorable place, its outlets are available in convenient locations. Thereafter,
children like large number of food range; burgers, nuggets, fries, donuts etc provided by
company. Thereafter, old age individuals like it because services are quick and food is not too
expensive. McDonald's is able to provide effective services because production process is
systematic, there fixed time allotted for each activity. There is prior planning of production
process to meet the upcoming demands. Thereafter, there is fixed process of preparing different
food items. In this respect, observation check list is prepared which states the sequence in which
food should be prepared by staff. In the present business report, a brief description about the
operating process and the style of working of McDonald's will be detailed out (Slack, 2015).
An analysis of McDonald's operations
The McDonald's is among fastest growing company which is expanding its business
functions speedily. The major contribution of its increasing laurels is due to effective operations
process and ensuring greater satisfaction to customers. McDonald is able to take care of all the
needs of customers such as, it organizes birthday parties, events like face paintings for kids etc.
the company adopt segmentation and targeting strategies to reach the all range of customers.
Such as to impress the kids it organize fathers day or mother days on behalf of them for their
parents (Krajewski, Ritzman and Malhotra, 2007). Further, it influence elderly by do not letting
them stand in the queue. Thereafter, for youngsters it organizes face paintings etc. Thereafter, by
providing fast services, keeping low cost, attractive design of outlets etc it attracts large
customers and increase customer base. In this report, the analysis of operations of Eastborough
restaurant will be detailed out. The outlet of Mc Donald's is situated in the main shopping area
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which provides convenience to customers. The layout of restaurant consists of seating area that
comprises of two floors, and area where operations are done; counter, production and grill area.
The layout of restaurant is designed in such a way that services could be delivered to customers
as quick as possible. The production area is just designed behind the counter area so that food as
soon as its is produced is served to customer (Russell and Taylor-Iii, 2008). Every section in
production area is well organized and labeled so that there is no haphazard while service
delivery. Further, there are 10 tills at counter area which are all working during peak hours so
that customers need not stand long in queue and they get their order served quickly. Thereafter,
to maintain the quality of food, there is hot storage for storing fast food and desserts are stored in
cold cabinet.
Further, Mc Donald's change its menu and offerings with the changing needs of
customers this further help company in remaining in competition. In this respect, the company
have started providing healthy food products because, health consciousness among customers is
rising (Sousa, R. and Voss, C. A., 2008). Therefore, the enterprise offers, fast foods, deli options
and low fat muffins, salads. For kids, it is offering apple pie, fruit bag, orange juice, milk shakes
etc. With this aspect, company can overcome the negative image of unhealthy food products.
Therefore, it added more healthy and nutritional eatables. Further, to increase the sales company
undertakes different promotional activities like, introducing happy meals for kids or extra value
meals for adults. To ensure the effectiveness in the service process the counter persons adopt
various selling techniques. There is selling up technique which enables suggesting additional
items by counter person to customer. For instance, suggesting cold drink when customer places
order for burger. Thereafter, there is suggestive technique where counter person suggest of
taking extra value meal which will be more favorable for customers as it comprises of extra
items (Hill, A. and Hill, T., 2012).
Further, there is fixed sequence for providing regular orders of Big Mac, fries, cold drink
or coffee. Therefore, by following a systematic sequence, the staff can increase the efficiency of
their service delivery process. However, in the case of shortfall of particular food item demanded
by customer, immediately call is done made by counter person to production person who
ultimately request grill area. Further, during weak sales periods, food items which are less
demanded are not readily available and they are cooked only on order. Here, salads and deli
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options can be included. However, if it takes time to serve the order the counter person can
request the customer to take a seat until the order arrives.
Further, there is systematic process of production planning process that help in meeting
the demand of customers and satisfying them with valuable services (Jacobs, F. R. and Chase, R.
B., 2010). The respective manager of McDonlad's outlet, forecast the sales on the basis of
previous three weeks sales for the same period the previous year. This further help the manager
in estimating the future demand and preparing bin level to meet that demand. Thereafter, a chart
is prepared and displayed on wall which help in guiding the staff so that employee in charge can
maintain bin levels. Further, it assist in determining the increase or fall in demand and arranging
the bin accordingly. Therefore, it help McDonald's in meeting the demand and avoid the situation
of shortfall, lack of availability of product demanded by customer. However, the demand varies
with time frame like, evenings there are more customers. Thereafter, on weekends the customers
are more as compared to weekdays. Therefore, the raw material and bin level are kept maximum
on Friday, Saturday and Sundays (Cachon, G. and Terwiesch, C., 2009). Furthermore,
McDonald's also arranges its staff according to the prospective demands of customers. Like
presently, Eastborough have staff of 100 people where only more than 70% are part time worker
and rest are full time one. The key strategy of outlet is to have right number of individuals at
right time. Therefore, during weekends it employs more staff than in slack periods. For instance,
normally on weekends it appoint 40-50 staff whereas on weekdays, it appoint 10-20 staff only.
Thereafter,during the time of low demand manager ask it part time workers to leave if they want.
However, manager calls the additional staff if demand is circumstantially high. This ensures that
organization make optimum use of its human resources (Bayraktar, E., and et.al., 2007).
Further, Mc Donald's control its production process to avoid shortage and wastage of
food products. By controlling the production process the manager of outlet ensures there is no
accumulation of unnecessary stock that adds to the operating cost for company. Therefore, there
is well defined approach for controlling production. For this aspect, every day the person in
charge fills the bins in the production area to the optimum levels (Parfitt, J., Barthel, M. and
Macnaughton, S., 2010). For this aspect, necessary products are requested from production area;
grill area and chicken station. Further, at the time of high demand a person is assigned a duty to
manage the bin by acting as a mediator between service staff taking customers orders and staff
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preparing food. Therefore, bin in charge calls the production when required and keep the bin
stock maintained upto the required level (Stadtler, H., 2008). However, during low demand
period counter staff makes the order directly from production department to maintain minimum
inventory level. Further, company does not compromise on the quality of services even if the
demand is high. For this aspect, the staff ensures that food is served hot to customers. Therefore,
food is held up to maximum 7 minutes after packing before it is served to customer. According
to the interview done of bin in charge it has been identified that managing the bin help in running
production smoothly. However, one is required to follow the chart that reflects how much
inventory should be held to match the different levels of demand. However, the bin in charge is
required to keep a check on what is selling, customer inflow-outflow, stock requirement and
experience of production staff. It is suggested by the bin in charge that it is more feasible for Mc
Donald's to keep bin level high rather than making a customer wait. This further, reflects that
major attention is given by employees and company towards the convenience of customers. This
also enhance the satisfaction level among customers as company take care of their comfort and
needs in best way (Food and Beverage Industry Outlook Survey. 2013).
Further, to satisfy the food and beverage needs of customers, McDonlads keep on
revising their menu. This also help in meeting the needs and preference of customers in most
effective and efficient manner. For this aspect, company undertakes product development
strategy, my developing products which are demanded by customers. This also help the company
in sustaining the tough competition from its rivals. Like, with the growing health consciousness
among individuals, Mc Donald's have added healthy food items. The company provides
customized menu in different locations as per the needs of customers (Reducing Wastage. nt.d).
Thereafter, the food is also prepared according to the detailed process so that its taste,
flavors remain same and matches the quality benchmark set by the company. For instance, french
fries are left up to at least 45 minutes to defreeze before cooking. Thereafter, they are put in
vessel and put a timer of 30 seconds that indicates the staff that vessel must be lifted and shaken
(About us. 2015). Further, the fires are cooked for three minutes and ultimately wrapped and
served within the standard 7 minute time. The process of preparing food remains same for every
Mc Donald's outlet so that customer get same taste whether the consume the Mc Donald's food
product in their home country or in foreign country (Cantor and Macdonald, 2009). For ensuring
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the familiarity within the staff personnel's an observation check list is prepared for all the items
described in menu. This observation check list consist of proper sequence of preparing food,
cooking pattern, time allotted for cooking and serving style. The main objective of preparing
OCL is to ensure that minimum time is taken in cooking food products.
Further, for ensuring the smooth functioning of Mc Donald's and efficient performance of
staff members, company take various measures in this respect (Slack, 2015). The company
provides training to its staff members to enhance their skills and competencies within the
organization. This further, enhances the overall productivity of staff members. With the help of
training and development process coordination, cooperation and team building skills are
improved among staff thereafter, staff are trained to major functions of Mc Donald's; preparing
and storing food. Further, the training and development process increases the career
opportunities for individuals and within few month develop expertise. Further, the quality of
performance of staff is evaluated by manager with the help of proper operation clearing list.
However, to get status of five star employee, one is required to attempt two adequate OCLs for
each area of operations (Krajewski, Ritzman and Malhotra, 2007).
Thereafter, Mc Donald's hold up its business motto of quality, service, cleanliness and
value by conducting an external audit by the end of each quarter. However, the audit is done by
manager of other Mc Donald's outlet. This further ensures that there is no biasness. Further, for
audit purpose, file of at least fifteen employees is chosen and outlet is graded based on the
attained OCLs scores. Apart from this, full field audit is also done (Russell and Taylor-Iii, 2008).
With the rapid competition, company is aligning its business strategy with rivals
strategies. Like, to match the competition with Subway, Mc Donald's introduced healthy
products, salads, veggie roles, burgers, apple pie etc. Further, company also changed its service
delivery style from storing in bins to making on order (Sousa, R. and Voss, C. A., 2008).
However, for this aspect, company was required to upgrade its current technology by installing
fast processing toasters, computers for managing stock, launching zones for controlling
temperature etc. This helped company in keeping in pace with its competitors.
From the aforementioned description its clear that Mc Donald's adopt management
functions, planning, organizing, leading and controlling. Therefore, company plans its
production process, organize raw material, staff and other resources, lead people by conducting
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training sessions and ultimately control various functions by audits and OCLs. Further, company
do competitor analysis in order to match their strategies with their rivals. For instance,after
analyzing the market of Starbucks, Mc Donald's introduced espresso coffee in its menu (Hill, A.
and Hill, T., 2012). Further, for increasing customer, company adopt new marketing and
innovative marketing strategies like advertisements etc by using tag line 'I m loving it' .
Thereafter, Mc Donald's also make effective use of marketing Ps, product, price, place,
promotion and people. Here, product involve items suggested in menu, people refers to
diversified range of individuals to whom services are offered. Place states the outlets of Mc
Donald's providing best dining experience to customers. Thereafter, company keeps affordable
prices and promotion involve advertisements and other mediums used by outlets to connect with
customers.
Recommendations for reducing the amount of food wastage
With the rising concern among individuals at food wastage in Mc Donald's, there are
some recommendations that will help in reducing the amount of food wastage. They are further
explained as follows,
 Mc Donald's should avoid using bins for stocking food and start providing food on order.
Therefore, company can overcome the problem of food wastage that is faced when
demand is low and food kept in bins is not sold out (Jacobs, F. R. and Chase, R. B.,
2010).
 Mc Donald's should keep only appropriate level of inventory of food ingredients like,
buns, veggies, chicken etc. Holding the stock for more duration deteriorates the quality of
food and ultimately it is not used and wasted (Cachon, G. and Terwiesch, C., 2009).
 The company also recycle its product to avoid wastage like, recycling the used cooking
oil for further use. Therefore, company can recycle its used cooking oil and transform it
into bio diesels etc.
 Mc Donald's can use solar panels and wind turbines in each outlets to make effective use
of energy.
 The counter person while serving the order can request the customer to finish their order
and do not leave anything in their plate.
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 The company can generate awareness among its customers by emphasizing on the
disadvantages of food wastage in its advertisements and other promotional activities.
 The company can use its organic waste to as a bio fuel like,peels of potatoes and other
vegetable waste can be sent to landfills to increase the nutritional content of soil
(Bayraktar, E., and et.al., 2007). Likewise, left out or used coffee by customers can be
sent to landfills as it also adds to the nutrient compost level of gardens.
 Mc Donald's can make different programs like zero wastage program with collaboration
of customers to reduce the food wastage.
 Most of the waste is generated by children so company can design its meal as the
consumption capacity of children like Mc Donald's can offer small fries, small burger in
its happy meal. Further, children should be influenced and persuaded to finish their meal
by giving free toy.
Thereafter, company can recycle the used glasses, material used in packaging like cardboard etc.
to minimize the overall wastage (Parfitt, J., Barthel, M. and Macnaughton, S., 2010).
Conclusions and Recommendations indicating strengths and weaknesses of operations
Summing up the entire analysis, it can be said that Mc Donald's is managing its different
operational activities effectively. This further help company in meeting up the industry standards
and sustaining the tough competition. Due to effective operations, company is winning the hearts
of different age range customers. The share prices of enterprise are continuously increasing and
company is keen to learn from its mistake (Stadtler, H., 2008). For instance, from the failure of
healthy products and falling sales, company started making its burgers healthy by using organic
oil, veggies etc. rather than offering salads etc. Thereafter, company is taking effective steps to
minimize its food wastage like recycling cooking oil, using renewable packaging material etc.
The key strength of company is its integrated production system and design of its restaurants
they further help the firm in providing quick services. The company keeps low and affordable
prices which attracts larger customer base. However, low up gradation of technology and still
using outdated processes are some weaknesses of McDonalds. In addition to this aspect, the
company have done too much product diversification by adding lattes, wraps, salads etc in its
menu. This has increased the threat of future losses (Food and Beverage Industry Outlook
Survey. 2013). The intense competition from brand like, Burger king, Starbucks, KFC etc is also
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a major weakness for Mc Donalds. The closing of loss generating outlets and poor infrastructure
where some weaknesses that impacted the operations of company. Hence, its suggested that Mc
Donald's should develop new strategy, adopt new technology for food production and
eliminating food wastage. Further, strong marketing will help company in attracting large
number of customers. Further, proper training to workforce will help company to increase
efficiency of its human resources. The use of online portals for getting customers reviews,
answering their queries etc. will help company in connecting with customers and enhancing their
satisfaction level. Further, Mc Donald's is suggested to improve its functions and operations to
maintain in long run (Reducing Wastage. nt.d).
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REFFERENCES
Books and Journals
Bayraktar, E., and et.al., 2007. Evolution of operations management: past, present and future.
Management Research News. 30(11). pp. 843-871.
Cachon, G. and Terwiesch, C., 2009. Matching supply with demand. Singapore: McGraw-Hill.
Cantor, D. E. and Macdonald, J. R., 2009. Decision-making in the supply chain: examining
problem solving approaches and information availability. Journal of Operations
Management, 27(3). pp. 220-232.
Hill, A. and Hill, T., 2012. Operations management. Palgrave Macmillan.
Jacobs, F. R. and Chase, R. B., 2010. Operations and supply management: The core. New York,
NY: McGraw-Hill Irwin.
Krajewski, L. J., Ritzman, L. P. and Malhotra, M. K., 2007. Operations management: processes
and value chains.
Parfitt, J., Barthel, M. and Macnaughton, S., 2010. Food waste within food supply chains:
quantification and potential for change to 2050. Philosophical Transactions of the
Royal Society B: Biological Sciences. 365(1554). pp. 3065-3081.
Russell, R. S. and Taylor-Iii, B. W., 2008. Operations management along the supply chain. John
Wiley and Sons.
Slack, N., 2015. Operations strategy. John Wiley and Sons, Ltd.
Sousa, R. and Voss, C. A., 2008. Contingency research in operations management practices.
Journal of Operations Management. 26(6). pp. 697-713.
Stadtler, H., 2008. Production planning and scheduling. Springer Berlin Heidelberg.
Online
About us. 2015. [Online]. Available through: <http://www.aboutmcdonalds.com/mcd.html>.
[Accessed on 8th December 2015]
Food and Beverage Industry Outlook Survey. 2013. [Online]. Available through:
<https://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/food-
beverage-outlook-survey-2013.pdf>. [Accessed on 8th December 2015]
Reducing Wastage. nt.d. [Online]. Available through:
<https://www.mcdonalds.co.uk/ukhome/Ourworld/Environment/Waste.html>. [Accessed
on 8th December 2015]
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