Operations Management and Decision-Making Models at McDonald's

This report analyzes McDonald's operation strategy, innovation and decision-making process, product and service design, process design, supply chain, planning and control, and quality management.

Operation
Management and
Decision-Making
Models

Introduction
 McDonald’s is the leading and the most successful fast-food
restaurant globally. The corporation is well-known for its burgers
which were introduced in 1940 by Dick and McDonald. The company
operates in more than 30,000 franchised stores globally.
 The aim of this report is to analyze the company’s operation strategy,
innovation and the decision-making process, product and service
design, process design, supply chain, planning and control, and its
quality management.

Description of the Organization
 McDonald’s was started in 1948 by Dick and McDonald. The
corporation is the biggest and the leading fast-food restaurant
internationally, with its stores in more than 119 countries.
 The corporation’s purpose includes providing customers with healthy,
good-tasting food, encourage a good working environment for its
employees, and to maintain good neighbors through the Ronald
McDonald’s House Charities.
 McDonald’s business strategy entails providing excellent customer
service, luring price sensitive clients by creating the value for money,
among others.

Operations Strategy
 The corporation utilizes a clear and excellent operations strategy with
the intention of gaining a larger market share as well as increasing
the shareholders’ value. The company’s main focus includes
standardization, affordability, speed, and quality.
 McDonald’s operations strategy has evolved such that it anticipates
the consumers’ traffic patterns as well as the selection of food by
analyzing the sales history and trends. To improve its current
operations strategy, McDonald’s may consider using a time and
motion study to identify the manner in which different functions and
components fit into each other.

Decision-Making Process and
Innovation
 McDonald’s has got a democratic type of leadership, thus there is a
minimal gap between the staff and the managers. Additionally, the
company practices the administrative approach in making strategic
and operational decisions.
 The corporation’s innovation stems from responsiveness to its clients
and the franchisees. For instance, it had the first drive-through
window as well as the menu innovations which have assisted it to
hold productive offerings.
 The organization creates value for the communities where it operates
in by improving systems and operations. Additionally, it is a leader in
recycling and waste management.

Product and Service Design
 The corporation offers a uniform menu that comprises of fries,
chicken sandwiches, hamburgers, the Big Mac, chicken nuggets,
salads, among others.
 This product mix poses operational challenges to the corporation
because it faces criticism as offering products that contain high
calories such as the burgers. At McDonald’s, the R&D function is fully
resourced as evident in China where the corporation continues to
invest in developing innovative products by launching more than 15
new products in the market.

Process Design
 McDonald’s corporation evaluates quality in its processes throughout
its franchise chain by using the ‘mystery shoppers’ to give feedback.
The first thing an individual notices while in McDonald’s is its
efficiency in the manner in which it utilizes its retail facility to support
it business processes. It utilizes its space to provide the maximum
number of counters using the minimal space as possible.
 An area that the corporation needs to improve to make its business
process more effective is the customer’s waiting time during rush
hours.

Value Chain
 McDonald’s is an advocate of the value chain with its primary
activities being inbound logistics, operations, outbound logistics,
marketing, and sales, as well as service.
 The activities that support the corporation’s primary activities include
the procurement, human resources, infrastructure, and technology
development. McDonald’s supply chain consists of three processes
that consist of the Customer Order where the customer interacts with
the company’s staff and places their order.

Cont.
 The second phase is the Replenishment Cycle is initiated when there
is a need to create security for future demand by replenishing goods.
The last phase is the Procurement Cycle that connects the distributor
to the supplier.
 Also, the company uses the push and pull cycle of its supply chain.
McDonald’s can improve its supply chain and logistics by using
advanced automation or adopting the Uber-style of logistics.

Planning and Control
 McDonald’s has over 31,000 stores globally. The statistical data
gathered from these stores is used by the company to plan and
forecast future demand, using the aggregate forecasting method.
Currently, the corporation uses the JDA Manugistics 7 application to
forecasting demand.
 The decision-making process and the company’s short and long-term
goals are linked in such a way that the decisions made reflect on the
company’s goals such as changing its in-store experience to attract
more customers.

Cont.
 The corporation has an excellent feedback control such that the
administrators provide real information for the implementation of the
company’s plan which enhances employee motivation.
 Feed-forward control is used in reducing and preventing deficiencies
in performance before they occur. However, the company should pay
keen attention to its inventory Planning and Control if it is to maintain
the desired levels in serving its customers.

Quality Management
 For a corporation such as McDonald’s, among the driving forces is
quality management. By using the Six Sigma quality management
tool, the corporation has been in a position to sell more than 75
burgers per second, thus benefiting the customers, employee, and
the stakeholders.
 The company’s quality system is appropriate thus making it the
leading fast-food restaurant internationally. McDonald’s can make
sure that quality is achieved by practicing reliability and improve on
responsiveness.

Conclusion
 McDonald’s success has been attributed to its decision-making
process that involves individuals at all stages including the
employees, managers, and the CEO.
 The decision-making process is linked to the company’s short and
long-term goals. The company focuses on offering standardized,
affordable, speedy, and high-quality quality products which is
attained by managing quality through the use of the Six Sigma
technique.

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