Managing Business Operations at McDonald's

This report discusses the operation management at McDonald's, including the approach to capacity management, implementation of the four Ds (Design, Direct, Develop, Deliver), and the five performance objectives (Quality, Speed, Dependability, Flexibility, Cost). It also includes an analysis of the average number of customers and waiting time at the Drive-Thru. The report provides insights into how McDonald's manages its business operations to deliver high-quality products and meet customer expectations.

MANAGING
BUSINESS
OPERATIONS

INTRODUCTION
Planning, organizing, supervising and controlling of business operations especially
concerned for production and distribution with the objective of enjoying higher profits refers
Operations Management. This is related to the internal management of the company which is
inseparable. The present report concerns for the operation management at Mc Donald's who is a
multi national company offers a wide range of fast food to its customers worldwide. The
assignment includes some concepts of operations management such as 4 D's from design to
deliver, five performance objectives, approaches of capacity management, etc.
TASK
1. What approach(es) does McDonald’s seem to take for its capacity management to
reconcile capacity and demand?
Capacity management refers to the procedure of measuring the company's resources
capacity to perform the activity in order to have efficiency in its operations. There are several
approaches concerned with capacity management in the organisations.(Dasgupta, and et.all.,
2018). The approaches such as Level Capacity, Chase Demand and Demand Management are
used in the case of Mc Donald's company. The explanation of each approaches are under:
 Level Capacity: This approach involves determination of the resources which a
manufacturer company is needed to fulfil the demand of a particular product at a
particular time. This gives an idea to the producers about the requirement of all the
supportive materials such as labour, machinery,capital, raw material, etc. required for the
process in getting final product and serving it to the clients (dellaBadia, and Simon,
2019).
Mc Donald's has adopted Just-in-time management for managing level of inventory where the
raw material and essential goods are obtained by the company when required.
 Chase Demand: This approach comprises chasing of the demand raised by the customers
in the market. This involves producing the exact number of goods by the company which
is demanded by its potential customers. This approach is best suited for the industry
producing and offering perishable goods in the market which involves low production

and inventory cost. Companies under this approach manufactures its products as when
demanded by the buyers.
Mc Donald's uses pull strategic method in its production of fast food to chase the demand and
reduces the cost of production. The company also maintains smoothness and uniformity in its
production flow.
 Demand Management: Demand management refers to the process of managing the
customers demand through supply chain management or by marketing. The concept
includes forecasting the demand, promising the potential customers for delivery of their
order, managing the customers order, etc. It keeps a track on the requirements of the
business internally and the buying operations of the company (Gölzer, and Fritzsche,
2017).
Mc Donald's applies the approach of demand management in its organisation in a way it includes
the engagement of its employees related to their involvement and participation. The company
also supplies some quantities to meet the instant demand in the chain of food production.
2. Analyse the implementation of the four Ds by the McDonald’s restaurants?
Four D's refers to a method of time management or of productivity. For the big
companies who operates at multinational level each and every time is very crucial and for
managing the time companies uses the method of four D's in its organisation to offer their
product to the customers in an effective and efficient way (Hacioglu, and Sevgilioglu, 2019) .
Four D's stands the acronym for Design, Direct, Develop and Deliver. Each D is explained
under:
 Design: It includes the designing of the product, company strategies, its pricing, etc. Mc
Donald's have designed its information system by proper utilization of digital technology
which helps the customers to choose their food in an easy manner. The company also
presents new items for its customers.
 Direct: This involves directing to some expert for specific work and overall strategy in
the organisation. Proper direction helps the company to maintain effectiveness and
increase productivity. Mc Donald's has directed all its outlets for certain regulations and
measures which every store has to maintain in order to deliver best and high quality of
service to its customers. For this the company keeps on regular check of quality in food

offered to the customers at Mc Donald's restaurants (Limański, Popławska, and Drabik,
2018).
 Develop: This involves development of the company's existing products and services
through regular improvement. This aspect of operations management helps the company
in achieving success and attaining growth. For Mc Donald's it is very essential to adopt
such strategies which can be implemented in an effective way.
 Deliver: This involves the final delivery of the product to the customers and meeting
their expectations. Management of company's inventory can be very helpful for any
organisation to deliver best products along with the meeting of expectations of the
buyers. Mc Donald's is very much concerned about delivering high quality products to its
customers with less time as for the company its buyers are the priority and to meet their
expectation is company's main objective (Renfroe, 2019) .
3. Evaluate what the five performance objectives mean for the operation in McDonald’s?
Performance objectives is the concept which supports the organisation to achieve success
expected from the employees to fulfil it. There are five performance objectives which takes the
organisation to its success. The objectives are Quality, Speed, Dependability, Flexibility and
Cost. Each objective is discussed under:
 Quality: Quality is something upon which every company focuses on a prior basis. It
depicts the company's operations and customer expectations for a specific product or
service. It is backed by the concept of “doing things in a right manner” (Shrivastava, and
Kapoor, 2019). Better quality product builds a good and continuing relationship between
customer and the company. For Mc Donald's quality management is places at the top
with utmost priority. Company does not compromises with the quality presented in its
products. It insures maintenance of better customer relation and services. The company
always tries to bring better quality every time compared to existing one for its valuable
customers.
 Speed: Speed refers to the frequency in the process, productions, distribution and
delivery of the products and services by the company. It comprises of the time duration
started from placing of order by a customer and the final delivery of the product by
company to its customers. Mc Donald's always takes care of the time for the delivery of
the product to its customers. The company always delivers the product in minimal time at

a faster rate. For catering more and more customers Mc Donald's always works upon
reducing time for the delivery of the product but by keeping the quality in mind.
 Dependability: It refers to the dependency level of the customer upon the company for
the product which is being promised by the organisation to deliver it to the customers. Mc
Donald's always depends on its customers for increasing its sales and developing brand
image (Vishniac, and Schmidt, 2018).
 Flexibility: This includes modifications in the operations of the company to meet the
requirements and to fulfil the expectations of the potential buyers. This can be in a form
of any change, modification, or bringing new products or services into the market. More
flexibility leads to more sales and higher profits with increasing brand image. Mc
Donald's always tries to fulfil the customers expectations and the company also provides
flexibility to its employees to work in a better and good working condition. This
flexibility in the organisation supports Mc Donald's to achieve success and raise brand
image.
 Cost: Cost refers to the expenses incurred on the production and delivery of the product.
Every company is concern about the cost involved in the product. Less cost gives an
opportunity to have high profit ratio for the company from the sale of the product. Mc
Donald's always focuses on cost reduction so as to increase profit for the company. Mc
Donald's always concerns on less price of their product so as every interest buyer can buy
the product easily and should not bother buyers about the price of the product. Offer
pocket friendly product to the customers is the main motto of the company.
4. At the Dorchester McDonald’s branch, cars arrive at the Drive-Thru at a rate of 25
per hour and only one drive-thru till is open. The average time it takes for an order
and collection is 5 minutes. Assuming that the interarrival time and the service time
are both exponentially distributed. Calculate the average number of customers
arriving at the till and the average time they must wait before exiting McDonald’s

Drive-Thru. You are encouraged to use calculations to prove any challenges if there
is any and suggest any solutions, based on the calculations.
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
Company saves time in delivery of its product by starting an online platform and
adopting digital technology for accepting orders form the customers and saves their waiting time
which helps the company in order to cater more customers and generate high profits.
CONCLUSION
From the above report it can be concluded that Mc Donald's offers its best to the
customers. Company focus on providing best quality pocket friendly product to the buyers. It
always tries to deliver the product in lesser time as much as possible. For the company its
customers and employees are very important and always tries to meet their expectations. From
the report it can be stated that four D's and five ways of performance objectives are very

essential for every company to deliver good quality product and increase brand image of the
company.

REFERENCES
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