Operations and Information Management at McDonalds UAE

Running Head: OPERATION MANAGEMENT 1
Operations and Information
Management

OPERATION MANAGEMENT 2
Table of Contents
Introduction.................................................................................................................................................3
Company Description..................................................................................................................................3
Inventory Management...............................................................................................................................4
Just-In-Time Approach.............................................................................................................................4
Stock Control Charts................................................................................................................................4
Ordering..................................................................................................................................................5
Key Operations involved in Production System...........................................................................................5
Operational Flow.....................................................................................................................................7
Failure..........................................................................................................................................................8
Delay in Food Serving..............................................................................................................................8
Overproduction.......................................................................................................................................9
Use of Lean Approach..................................................................................................................................9
Key Findings...............................................................................................................................................10
Conclusion and Recommendations...........................................................................................................12
References.................................................................................................................................................13

OPERATION MANAGEMENT 3
Introduction
Operations Management is the process of converting a wide range of inputs into usable inputs by
utilizing different physical processes. The major objective of operations management process is
to effectively use the available resources and assets, develop products which fulfill the needs and
wants of customers (Slack, Chambers and Johnston, 2014). The major aspects of this process are
such as handling of product and process design, capacity management, production system and
techniques, system development and supply chain strategy. Production system forms a major part
of operations management of any organization.
The purpose of this report is to analyze the production system of McDonalds UAE that is one of
the largest fast food chains across the world. While working with McDonalds UAE, it was a
great experience that assisted to become familiar about its production system and other internal
processes. This report includes different aspects of operations management in context of
McDonalds UAE, such as inventory management, key operations in production system and
operational flow. Furthermore, it includes the failure in company’s delivery system and then it
provides the insights on how this company can overcome these failings by using lean production
system.
Company Description
McDonalds is a leading fast food organization that has established its operations in United States
in the year 1940. Since its foundation, the organization is bale to expand its operations in various
nations across the world. Now, McDonald’s is the largest fast food chain in the world in terms of
revenues. It is serving more than 70 million customers routinely in over 100 nations
(McDonalds, 2018). As of 2016, it has total 36,900 stores where it has employed approximately
235000w employees. It offers a wide range of products like hamburgers, French fries, soft
drinks, coffee, ice tea, milkshakes, chicken, flavored tea etc. In addition to this, the restaurants of
McDonalds also offer different breakfast items in UAE and in other markets (McDonalds, 2012).
Its breakfast category includes cookies, muffins, sandwiches, biscuits, hotcakes etc. This
organization has launched its offerings under some brands like Big N’Tasty, McFlurry,
McNuggets, Mcuffin etc.

OPERATION MANAGEMENT 4
Inventory Management
Under Operations Management, Inventory Management is one of the major strategic decision
areas that assist the organization to manage the receipt and utilization of materials for its
production process. As a largest fast food chain in UAE, the organization is very much focused
on managing its inventory effectively (McDonalds UAE, 2018). It is using significant processes
and practices so that it can minimize its inventory costs while assisting the restaurant operations.
In its operations, McDonalds does not directly provide its products to the restaurants. In its place,
local distributors and intermediaries communicate with the McDonalds’ restaurant managers to
manage the inventory efficiently.
McDonalds UAE implements various practices to manage its stock and inventory which are
discussed below:
Just-In-Time Approach
One of the most significant techniques of inventory management which McDonalds uses to
manage its stocks effectively is Just-in-Time approach. In UAE, the restaurant of McDonalds
uses this inventory strategy to enhance its efficiency and eliminate the wastage by getting the
materials only when they are required in the production process, thus decreasing the costs of
inventory (Chiu, Yang and Lin, 2017). At its restaurant, when customer orders the food, the
chefs do not start to prepare the food. It assembles and reheats the burger as per the specific
order. With the assistance of Just-in-Time inventory management system, McDonalds precook a
lot of burgers and store than under the heat lamps. The restaurant stores them as long as possible
and finally disposes what cannot be sold. It assists the company to manage its inventory and
serve the customers more quickly.
Stock Control Charts
Stock control chart is one of the major components that assist the organization to manage its
stocks and inventory. Stock Control chart is the document that demonstrates the balance of
orders for new stocks against company’s sales. This system is totally dependent on the data for
forecasted sales. For instance, if sales of hamburgers are running out of system then inventory
for beef patties require to be approaching into the system. Moreover, if the sale of McFlurry is
going out, then inventory of ice-cream will need to be coming in the stock. The Manugistics
system uses the product sales worth of two years for the restaurant. At McDonalds UAE, the