OPERATIONS MANAGEMENT | EXECUTIVE SUMMARY

Running Head: Operations Management
Operations Management
Name of the Student:
Name of the University:
Author’s Note

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EXECUTIVE SUMMARY
The following assignment is based on the case study of McDonalds. The report is
classified o the operational function of the management and it’s functioning in the areas of
inventory, supply chain, customer satisfaction and other aspects. The operational system of
McDonald’s caters to a form of partnership with the franchise and the suppliers with an intention
to improve the operational management innovatively and assist in launching new products. The
report provides a study of McDonald’s and its operational management, process, total quality
management which is imbedded in different process that provides its customers at the
acceptances cost.

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Table of Contents
Introduction......................................................................................................................................2
Operation contribution of McDonald’s.......................................................................................3
McDonald’s competitive advantage:...........................................................................................4
Quality management....................................................................................................................4
Supply chain management...........................................................................................................5
Process design..............................................................................................................................6
Inventory and maintenance..........................................................................................................7
McDonald’s operational strategy.................................................................................................8
Eliminating waste........................................................................................................................8
Maintenance of the quality in product and process...................................................................10
Meeting customer demand.........................................................................................................11
Evaluation of “Honesty and transparency make you vulnerable”.............................................12
Recommendation.......................................................................................................................13
Conclusion.....................................................................................................................................15
Reference.......................................................................................................................................17

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Introduction
Operation management is referred to as the administration where the industry practices
and creates the highest level of competence which is probable within the organisation (Heizer
2016). The unit is concerned with the conversion of material and labour into finished goods and
services as professionally as possible with an intention to increase the profit margin. The aim of
the report is to critically reflect on the operational management of McDonald’s organisation
performance. The operational system of McDonald’s caters to a form of partnership with the
franchise and the suppliers with an intention to improve the operational management
innovatively and assist in launching new products (Vivaldini and Pire 2016). With maximum
gains and minimal risk the business has continued to contribute in market and also in achieving
in international market. The organisation makes it a point to maintain a control by imposing rules
and standard procedures. Further in the assignment the competitive advantage of McDonald’s is
classified based on the quality management, process design, supply chain and inventory and
maintenance. In the second section of the report the operational strategy is implemented along
with several principles (Vivaldini and Pire 2016). The implementation is leaned to the practices
in McDonald’s which is identified on the source of maintain quality of the product and secondly
on meeting the demands of the customers. The report provides a study of McDonald’s and its
operational management, process, total quality management which is imbedded in different
process that provides its customers at the acceptances cost.
McDonald’s is a fast growing food chain and service retailer with an approx estimation of
more than 32,000 restaurants and it caters to more than 60 million people in more than 100
countries on a regular basis. More than 80% of the franchisee worldwide are operated by the
local people. At the time when Richard and Maurice McDonald had introduced their restaurant

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they had developed an idea on the basis of assembly line where the reduced menu could facilitate
cheaper cost (McDonald and Eisenhardt 2019). Lastly the recommendations made in the report
are based two criteria one is the organisation’s innovative and special items for the vegan
customers and secondly McDonald’s implementation on dynamic strategy for highlighting the
CSR and in order to attract environmentally conscious customers.
Operation contribution of McDonald’s
According to McDonald’s case study by Slack et.al the operational management is a
support to the company’s position as a largest fast growing food bistro chain in the world. There
are four strategic areas in which the retail chain represents the various strategic areas such as
quality management, supply chain management, inventory and maintenances and lastly its
process design (Stowell, Moore and Schumacher 2017). The global business entails a huge
variety of its strategic needs for the operation management. It is important for McDonald’s to
address the impacts of tough competition with the presences of other firms such as Subway, KFC
and Wendy’s. In order to formulate this McDonald’s needs to apply the strategies and suitable
policies in various fields. The founder of McDonald’s, Ray Kroc has managed to bring in the
concept of providing with limited amount of menu and run the entire process in restaurant
format.

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McDonald’s competitive advantage:
Quality management
The quality management of McDonald’s is the act of overseeing the activities of the
organisation and strategically estimates the task which is accomplished just to maintain a desired
level of excellence (Jensen, Cobbs and Turner 2016). It includes the determination of an amount
of quality policy, implementing quality and creating them. Keeping in mind about the
competitors in the market, McDonald’s maximizes its quality because it ensures to stay ahead of
its competitors. It is in the mindset of the customer that the retail outlet must look for high
quality products. The organisation on the other hand makes it significant for its customer to
provide with good quality products and also facilitate them with a take away policy (Jensen,
Cobbs and Turner 2016). This leads the customers to gain a competitive advantage and the
quality object leads to take certain action and policies in operating its product and service which
the customers want.
In order to keep it different and unique McDonald’s has made it a point to serve a variety
of high quality and nutritious food that includes fruits, salad and vegetables. From the case study
of McDonald’s it can be analyzed that the firm aims to concentrate more on the quality
management aspect which constrains the price and cost limits. McDonald’s utilizes a particular
production line that maintains the product quality consistency (Jensen, Cobbs and Turner 2016).
The consistency is important for the business to maintain as the brand stays focused in its
strategic decision and area of operational management.
The employees at McDonald’s are trained to prepare quality services and present the
meal according to the procedure that is specified to them in the training. The presentation and

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managing of food is strictly enforced to prepare and handle the raw and cooked product (Slack
and Brandon 2018). With instances in the case study it can be reflected that McDonald’s
provides a ten minutes holding time to ensure that the burger or French fries are of maximum
quality and the consumers can see a reflection of freshness in the food. The business meets all
the hygiene specified which also includes the hand washing procedures.
Supply chain management
The supply chain management of McDonald’s is interconnected with all the retail outlet
and firms that are related to each other in downstream and upstream linkage between the
different process and procedure in serving the customers (Vivaldini and Pires 2016). The supply
chain works in a systematic manner and in a following sequence:
 Coordinate the system of delivery in products from the supply chain
 Recording the demands of particular item
 Catering the customer requirements
 Supply of raw materials
 The operational resources
 Required time, quality and quantity.
The supply chain is concerned with the management that caters the flow of services and
information between the operations which forms the chain of supply network (Slack and
Brandon 2018). The organisation ensures that the suppliers follow the quality standard,
cleanliness and value set by the management. With the aim of tracing the types of product

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ingredients there is more emphasis which is placed so that the organisation are able to take
control in every link in the supply chain. McDonald’s has created a suppliers quality index in
which the suppliers are calculated (Slack and Brandon 2018). It permits the company to
monitor the performance of the suppliers which comes in non-agriculture and agricultural
products and services purchased.
Process design
The process design is the development of the functional requirements of the customers
which is able to satisfy the thoughts and shapes the resources and activities that comprise of a
product or a service and transform it (Dai, Peng and Li 2017). The process at McDonald’s begins
when the customer places the order and then after he or she receives the order, this process or
design must be completed and delivered. With the inclusion of the operational management the
organization aims to deliver a reasonable product which is placed in a rational time. The nature
of the employee working in the organisation should be to provide the customer with food within
the time limit (Dugmore and Wang 2018). The process of placing order and passing message to
the appropriate crew member requires developing of strategy and standards. The crew members
either cook burgers or within few minutes place the patties in the bun. In case of French fries the
potato is refrigerated and later deep fried. The process flow in the following manner:
 Customer places order.
 Toast bread products

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 Cook frozen products
 Place products in packaging
 Add ingredients
 Hold the cabinet
 Deliver it to the customers.
Having a well designed process design, McDonald’s is capable to produce customer
satisfaction in maintaining their quality, cleanliness and reduce the waiting time of the customer.
The flexibility is maintained in wide variety and changes the cost of the items by eliminating the
waste.
Inventory and maintenance
Inventory planning and maintenance is the control compensation that creates the
difference between supply of a product and demand f the same. It is the way of McDonald’s
which keeps the burger lanes full during the peak hours as it is a recognizable strategy of a pull
system. The organization has catered to billion of hamburgers which uses the elements of “just in
time” from the time or order till payment made by the customers (Pritchard and Mitchell 2016).
McDonald’s uses the lean production system which comprise of just in time planning and it takes
control to meet the target and demands of the customers. This as a result reduces the wastage of
stick and manages the correct demand that gets forecasted so that the services do not get
dispatched (Berholt and Bohman 2017). The advantage of using this method is that McDonald’s
produces goods which are of high quality and keeps its range of products at a low cost. This
method facilities the production to be faster. The delivery of McDonald’s inventory happens to
be recorded twice and more than that which depends on the business of the food outlets.

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However, the inventory is stored in the refrigerator in proper packaging where the beef Pattie are
processed and kept. The use of seasonal potato is also cut and freshly blanched in salt water so
that later on it can be directly deep fried when ordered are placed. All such activities are recorded
under the inventory management system of McDonald’s. apart from the frozen items the stock
are packaged in clear bags, boxes, bottles and for take away meals there are storage of paper
bags, drinking can and straw.
McDonald’s operational strategy
McDonald’s has adopted the lean manufacturing strategy that assists the organisation to
improve the quality of the service and also caters to help in reduction of cost of production. The
lean principle is applied in the services that help to make the work for the people more effective.
The owner and the manager of the retail outlet take the decision to operate and produce the
capacity of the organization (Dixit 2017). This process of lean manufacturing helps in
eliminating waste, maintain the quality in product and process and lastly it helps to meet the
demand of the customer. The process design by McDonald’s is designed effectively and
efficiently as it caters the principles of getting many benefits.
Eliminating waste
With concerned to eliminating waste, McDonald’s has designed its system of functioning
in a synchronized manner. Each of the crew members in the working station has its own job role

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and follows the system of just in time delivery to the customer. The concept of just in time
means that the produced good and service is placed exactly when they are needed. The customer
is offered with a waiting time of ten minutes and within that time phrase the entire order needs to
be placed (Wang and Chang 2016). This strategy of just in time planning aims to meet the
demand in a right way which comprise of perfect quality and also not generating waste. The lean
itself means waste elimination which is faster, produces high quality products and is more
dependable and also operates low costs.
McDonald’s uses the strategy of lean production which caters to minimizing the waste
accurately, develop correct demand and manage stock so that the products are not wasted or
discarded later (Wang and Chang 2016). For example the retail outlet does not starts cooking or
deep frying the French fries until the order is not placed by the customers. The firm is able to
make the products as soon as possible with the help of the technology they uses like the bun
toaster. McDonald’s provides with fast service and on the same time the finished products are
placed in inventory. The major advantage of implementing the reduced wastage skill helps in
lowering the cost and also maintains a better quality to the customer service (Wang and Chang
2016). The ordering cost of McDonald’s could be made higher with ordering of the fast food that
really is not fast.

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Maintenance of the quality in product and process
The total quality management is improving the operational management of McDonald’s
and is also helping in development of a structured root that is improving the corporation
presentation (Gorham, Gibson and Irlbeck 2016). The five major objectives that make the
presentation are speed, cost, quality, dependability and flexibility. The major concern here in that
why does McDonald’s set in coordination of its service. To which it can be explained that the
quality service of McDonald’s is maintained high and is possibly making its meals agree to the
others to which it is concerned with the staffs who are serving the clients. There are times where
McDonald’s make a point for surprise quality check. In every retail chain the restaurants go
through periodic examination which is also applied on the canister to check the additional stock
checks (Berholt and Bohman 2017).
Most of the customers are looking for products that are high in quality and the
organisation provides fault free products for their impending customers and as a result gains
competitive advantage (Gorham, Gibson and Irlbeck 2016). The quality objective of McDonald’s
leads to certain policies and action in operation just to provide a service that the customers want.
The retail outlets of McDonald’s provide a variety of high quality food products, salad, French
fries, vegetables and many more. The employees of McDonald’s are provided with training to
prepare and present the meals in accordance with the specified procedure that are strictly
enforced, especially in handling of raw materials and processed foods. The organisation meets all
the hygiene factors and specification that includes the hand washing format. The retail chains
have succeeded on the feedback form from the customers who make a visit in the store to
maintain and check on the areas that require improvement in quality and service.

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For McDonald’s it is the product planning that caters to the operation system. The
restaurants make it a point to add new products in its menu every month or every quarter. It also
involves the designing of the product quality in which the customer will find it an alternative
option to choose between the products.
Meeting customer demand
Meeting the customer needs is one of the primary aspects that McDonald’s make sure
that more of attention is given. With the strategy of improving the quality standard McDonald’s
make it a point that the employees are trained in maintenance of the store (McDONALD 2016).
The continuous learning desire of the employee and McDonald’s should result in increasing the
level of customer’s satisfaction. When the quality is enhanced it is the nature of the workers who
are serving the customers is well trained and caters to overall service. The sale price has been
one of the major reasons why McDonald’s is so popular and highly demanded by the customers.
McDonald’s has enabled the customers to make it affordable for their customers and thus lead in
high purchasing power (Berholt and Bohman 2017). On the other hand the company is also able
to analyze the customer needs and preferences and is motivating its employee to work on the
same field. They organization is able to introduce new chicken burger and also introduced vegan
burger for the non-vegetarian customers. The other variety of food products that has been
launched includes the organic milk in adding together to the salads.
The sociological factor of McDonald’s is contributing on high demand of hamburgers.
The change in nature of the working place with an increase in the number of working hours has
impacted on the demand of the hamburgers. The less amount of time allocated for preparation of

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the food thus have resulted in more number of people and families visiting the store. However
the main reason to satisfy the customer and meet their demands has been possible due to the
evolution of technology (Berholt and Bohman 2017). With the introduction of new latest
technology which comprise of packaging, store monitoring and maintaining the accounts.
Evaluation of “Honesty and transparency make you vulnerable”
The goal of McDonald’s is to aim and serve fresh food in a friendly environment.
Secondly it aims to be socially responsible to provide good service in return of the monetary
value they offer. The firm aims to provide the potential customers with food of high quality
standard. Provide services as soon as possible and stay up to the value of money. On the other
hand the objective of McDonald’s is successfully communicated in their new healthy alternatives
(Donaldson 2019). The perceived notion of McDonald’s is offering same time to the people who
have been offered the alternatives. McDonald’s have been a good communicator of their
products in nutritional element. Hence it has increased the transparency and the possible
elements of the people who try to know how many calories they may consume in a particular
meal. This is the process through which the organisation has perceived to be more open and
credible. With the statement mentioned above that is honestly and transparency make you
vulnerable goes in accordance with the organisation as McDonald’s puts its main focus on
maintaining its positions (Donaldson 2019). There should be a place for all kinds of consumers
and it should aim to continue its development both in burger and other healthier alternatives.
The competitors in the market have been evolving more in the recent times. Keeping in
mind the nature of the products the rival firms are selling, McDonald’s has made sure that its
organizing method and technique remains same as it was before. With the attribute of having

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high quality products and marinating hygiene in the organisation this leads to more of customers
and allows them to make repeated purchase (Berholt and Bohman 2017). The method of keeping
its customers first helps to maintain the value. McDonald’s makes sure that its crew members
and the products are honest to the customer as it an exchange value to the money they are
offering. Placing the customers first it makes sure that they are fully satisfied with McDonald’s.
It is predictive by the customer and fulfills the need which exceeds their expectation and with the
help of the market research it helps to find out what the customers want. McDonald’s aims to
surprise the customers with their service and quality and makes sure that their standards are met.
It is further consistent in the market because the organisation makes continuous improvement by
decreasing the cost and maintains the ordering procedure in all the outlets.
The management of the firm aims for zero defects as it plans to target the right procedure
in first attempt. The implementation is costly but it believes that prevention is better than cure. It
is in need of rigorous quality testing and controls the defected products which are spotted
immediately (Berholt and Bohman 2017). The organisation sells an approximate of millions of
burgers each day and hence to make it work so appropriately the job functioning has to be made
in a systematic and repetitive manner. With respect to produce so many burgers every employee
who are working is assigned a particular job in which it ensures that the quality and taste of the
product is the same all the time.
Recommendation
The following recommendation can be made on two major aspect one is McDonald’s
must innovate and add special items in their menu for the vegan customers and secondly the

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organisation must implement more dynamic strategy for highlighting its corporate social
responsibility in order to attract environmentally conscious customers.
Based on the first recommendation McDonald’s should introduce new product item on
the menu for vegan customer. It can introduce its plant based vegan burger in many parts of the
world. McDonald’s can introduce soya burgers and potato corn steak burger in its menu
(Abakumova 2018). The trial can be placed in small amounts or as free take away with the meals
ordered. Later the feedback process can be implemented to the people who visit the store (Carfì,
Donato and Schilirò 2018). The statistical data will allow the retail chain to either keep the
product on a bigger scale or remove it from the menu list. The vegan people on the other hand
can prefer the soya steak burgers and it can be a boon for the fast food lovers who want to avoid
meat. It is common for McDonald’s to try and experiment with the menu in the local regions
before it could decide to adopt or ditch the product line. The entry of marketing opportunity for
McDonald’s is based on the international expansion is creating to make the market examine
some crucial experiments (Peggs 2018). The international marketing challenges to discuss few
phase and procedure to enter the market entry.
The second recommendation that can be made for McDonald’s is to implement more
dynamic strategy with the help of corporate social responsibility and attract environmentally
conscious customers. McDonalds can implement its first strategy by stopping its paper billing
system and in return place the bill on customer’s phone number. An electronic form of billing
system can be obtained which can as a result save paper (Lee and Lambert 2017). After
researching about McDonald’s passion for its food and serving quality product to its customer it
can be ensured that it provides quality service to the people who visit the store. For the
consumers who are environmentally conscious aims to avid the usage of paper and plastic. The

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less usage of paper and plastic will help the organisation to maintain its corporate social
responsibility and also ensure that the food products are safely packed and refrigerated.
On the other hand the organisation aims to better the life of the employees and those in
the surrounding communities. The incorporation of more fruits and vegetable in the menu or in
the burgers will cater to better the lives of its customers. The organization should aim to offer
more in its product line or give an opportunity to its customer for add on toppings in French
fries, milk shake, salad and burgers (Roseman, Choi and Adams 2017). While the pricing
strategy of the extra toppings must be minimalistic so that the customer are attracted and on the
other hand the firm also receives good revenue. Lastly it can be said that McDonald’s can
incorporate organic vegetables keeping in mind the health of the customers. Organic vegetables
are meant to be used because it has fewer pesticides or antibiotics. Eating organic meals helps
the environment and it reduces the risk of cancer and other health effects. The aim of introducing
organic food in the products avoids the use of manmade pesticides, fertilizers and many more.
Conclusion
Hence it can be concluded that McDonald’s is an organisation that recalls its significant
work in serving its customer and emphasizes on how to turn the operational management to
approach and help the business to flourish. An effective approach of the organisation is to
analyze and know what its customer wants. The operational management functions in its
existing retail outlets. The firms are concentrated in achieving its process of transformation from
raw materials to finished goods. However the effective form of operational management
enhances the performance in that progression. It is one of the most known organisations that is
working worldwide and is mostly targeted by the children because of its exciting free offerings

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in happy meals. The operational strategy is well known and is decided to reduce cost, on time
delivery of the product, improve the quality of the product or food items and its continuous
performance in the prepared aspect. McDonald’s work together with the suppliers that caters to
all the standards of quality setting (Langert 2019). This ensures to satisfy the customer need of
fast served superiority products that includes the strategy of incorporating the short time in
serving the food to the customers. This results in serving of quality food in the shortest time
period.

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