Importance of Effective Supply Chain Management

Hospitality Supply
Chain Management

Table of Contents
TABLE OF CONTENT..............................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Concept of supply chain management, principles and process are applied throughout the
stages of resourcing, product design, development, logistics and distribution...........................3
TASK 2............................................................................................................................................6
P2. Importance of effective SCM from the perspective of customers, suppliers, distributors
and retailers.................................................................................................................................6
TASK 3............................................................................................................................................7
P3. Cross functional and integrated approach of Supply chain management with other
functional areas...........................................................................................................................7
TASK 4............................................................................................................................................9
P4. Supply chain strategy within the hospitality organisation and present proposals for the
improvement...............................................................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Supply chain management refers to the flow of goods and services in an organisation and
also responsible for all the production process and their requirements. This is the important
factor in the organisation as it manage all the production related activities like farming,
manufacturing and packaging of goods. (Zhao and et. al, 2016). The main component of supply
chain management are planning a source, manufacturing of goods , delivering products and
return on investment. McDonald's is a n American company, which deals in best quality of fast
food. Its headquarter is in Oak Brook, Illinois. It is the largest chain of restaurant in the world
and earn highest revenue. No. of customers for the McDonald's are more than 50 million in
different countries. This is famous for its hamburgers and French fries. This report explains the
concept of supply chain management, concept and their principles which are helping in different
stages of procuring the product, development and distribution. Further, it will explains the
importance of effective SCM and their interrelationship between hospitality sector.
TASK 1
P1. Concept of supply chain management, principles and process are applied throughout the
stages of resourcing, product design, development, logistics and distribution.
Concept of supply chain management: It is the process of flow of good and services in
an organisation, which also deals with the planning, procuring, manufacturing, packaging and
transporting the final product. (Yanamandra, 2018).The main focus of supply chain management
is to control and minimising the manufacturing cost. This concept is used by many organisation,
McDonald's can also use this practice in order to provide good quality product to their
customers. Supply chain helps in product development and designing of product and their
distribution. For example, If any organisation uses this techniques, it will hep the company to
make better use of its machine and produce superior quality goods. McDonald's uses this
technique and control all the factor of production and investing their money in right product.
Process of supply chain management- There are various factors that impact the process of
supply chain management in the organisation. This process will helps in controlling the supply
chain aspects. McDonald's uses various supply chain techniques, which helps in maintaining a
good manufacturing process and the process is explain as follows:

Planning- This is the first step of Supply chain management, which focuses on short
term and long term action plans for the organisation. Company should focuses on advantages and
disadvantages of different aspect in the international market. It also involve the Outsourcing of
manufacturing process. It is the mapping of manufacturing facilities and storage area for the
goods. McDonald's can do better planning to build a strong supply chain network that can help in
effectively analysis of good and make sure their fast delivery to their potential customer.
Procurement- This is the process which involve the purchase of raw material and ensure
that sufficient raw material should be purchase, there is no wastage of raw material.(Thunberg
and Fredriksson, 2018). With this organisation can control the various aspects of management
that will help in better choice of product and reflect the buying behaviour of the organisation.
Production- This is the process which includes the manufacturing, designing and
collecting the material. Supply chain manages ensure that all the needed material will be
available for the production of goods on time. In McDonald's, manager ensure all the
requirement of raw material and control the wastage of material. Company provide products
according to the customer needs and wants.
Distribution- This factor includes the channels of distribution of goods and services.
This ensures the proper logistics of the firm and McDonald's uses transportation company as a
their party payroll for delivery of goods and services. This company sell its product via
wholesaler, retailer and sales persons.
Customer Interface- This is the last step of supply chain management process, which
involve the concern of customer satisfaction. It focuses on identifying the problem associated
with the planning, procuring and manufacturing of goods and services.(Tamayo-Torres,
Gutierrez-Gutierrez and Ruiz-Moreno, 2019). McDonald's provide best quality fast food to their
customer as per the preferences of the customers and if there are any problem related to the
product and customer is facing issue then company can directly contact to the customer through
nay medium of communication.
From the above discussion, It is analysed that supply chain management of the
McDonald's can do better planning of what is needed for the customer and from which
techniques it can be accomplish in a better way. It the company properly execute the supply
chain process, it will help in saving the resources and produce a goods in a effective manner. It