Principles of Operations Management Assignment

Principles of
Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
1. An introduction to McDonald's..........................................................................................3
2. Roles and Responsibilities of operational manager ...........................................................4
3. Core operational activities within McDonald’s..................................................................5
4 The core operational activities of McDonald’s which interrelate and adds value to
organization's operations. ......................................................................................................6
5 Current trends which impact on business environment affect upon operation management...6
6 The internal and external factors which influence the McDonald's....................................7
7. The impact and implication of external and internal factor upon long term goal in
McDonald's.............................................................................................................................9
8. Figure out how operation management can support long term strategies: ......................10
CONCLUSION..............................................................................................................................11
REFERENCE.................................................................................................................................12

INTRODUCTION
Operation management is the process to create high level of efficiency to operate
business successfully. In other words, it is a technique to utilize the resources in organization
such as material, equipment and technology. It handles various issues in logistic, manufacturing
and project management to make them cost effective. In this current report McDonald, is chosen
as a company which is the largest fast food restaurant chain across worldwide. It was founded
in 1940 by Richard and Maurice McDonald and it headquarter is located in Chicago, Illinois U.S.
This report explains the role of operational manager and its responsibility towards organization.
Core operational activities within organization are discussed to get better understanding of
operation management. This report also covers about the current and future trends impact on
business operation (Alayón and Johansson, 2017). PESTEL and SWOT techniques are used in
the project to analysis the external and internal factors which are influencing the organization. In
addition to this it emphasis on long term strategies goals of organization to sustain in long run.
At last this report explain about different systems, process and tools which can be used to
achieve organization objective in well-defined manner.
1. An introduction to McDonald's.
McDonald's is an American company, it is one of the biggest chain of fast food restaurant
in whole world. The company was founded in 1940, a 79 years ago by Richard and Maurice
McDonald , in San Bernardino, California, united stated. Its headquarters is in Chicago, Illinois.
McDonald's has established more than 37855 restaurants world wide. The McDonald's restaurant
serves Hamburgers, chicken products, French fries, soft drinks, , desserts, coffee, cheeseburgers,
snack wraps. The McDonald's has given employment to 390000 candidates form all across the
world (Botti and Regattieri, 2017). Along with this, the McDonald's has their restaurant in many
countries like Argentina, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Belarus,
Belgium, Botswana, Brazil, Central African Republic, Bulgaria, Canada, Chile, China, Hong
Kong, Macau, and many more countries. In addition to this, the McDonald's offers both counter
service as well as drive-through service and also they provide indoor as well as outdoor seating
for their customers. The McDonald's has created different types of restaurant for serving their
products and services to customers like McDrive, McCafe, Create Your Taste restaurants,

Special diet, Playgrounds, McDonald's Next. The McDonald's has the many Competitors in
market, like KFC, Burger King, Subway, Starbucks, Pizza Hut, Domino's, Dunkin' Donuts,
Wendy's and many
2. Roles and Responsibilities of operational manager .
Roles of an Operations Manager: The roles of operations manager differ from industry to
industry somehow main roles stay constant. In context to McDonald's, the Operations managers
helps in directing the daily activities of business which are beneficial for employees,
management, investors and customers. They are also responsible for managing all activities and
functioning of business organization smoothly and profitably (Davenport and Tuck, 2018)
(Dubey, 2017).
Communication and conflict Resolution: The operations manager of McDonald's have
fluent communication skills, thus it helps manager in communicating with other employees and
employers effectively. Along with this, they perform role of conflict resolution, which will help
them in quick assessment of effects of changing situation and it also helps in developing
strategies which influence the positive employee to work effectively.
Planning and scheduling role: The another job role of operations manager of McDonald's
is to do proactive planning and scheduling & developing projects for business. This job role
includes interacting with numbers of agencies and organizations which are profitable for
McDonald's business, frequently checking of quality of operations and function of restaurant in a
proper way (Hazen and Hill, 2018).
Responsibilities of Operations Manager: There are many responsibilities which are performed
by operations manager of McDonald's , some duties are listed below:
 Managing and directing the operations team in order to achieve business targets.
 Developing of strategies, objectives policies, and making decision which are beneficial
for McDonald's restaurant.
 The duty of operations manager is to promote the culture of their restaurant which
motivates and encourages for doing more productive performance along with high
morale.
 To Ensure that, all legal & regulatory documents of restaurant are filed properly and they
also responsible for monitoring of their agreements according to laws and regulations.

 The responsibility of operational manager is to create strong & effective relationship with
customer by addressing them with their issues as well as complaints in a proper time
period (Ivanov and Schönberger, 2017).
3. Core operational activities within McDonald’s.
The McDonald’s core operational activities are Design of Goods and Services, Quality
Management, Process and Capacity Design, Process and Capacity Design, Location Strategy,
Layout Design and Strategy, Job Design and Human Resources, Supply Chain Management,
Inventory Management, Scheduling, Maintenance and many more. Some of the activities are
illustrated below in brief.
Location Strategy: The management of McDonald’s sets their goals and objective in this
strategic decision area of business function, and establish and sets the maximum locations for
restaurant outlets in order to cover whole market. The marketing mix of McDonald's includes
their restaurants, kiosks, their company’s website and some mobile applications. With the help of
these the customers can reach McDonald's restaurant in both ways traditional as well as online
ways.
Layout Design and Strategy: The management of McDonald’s is focusing on using the
practical strategies for area of operations management. Thus this strategy is involving in
maximum utilization of space in their restaurants instead of focusing on comfort zone as well as
spaciousness for customers. Further McDonald's is developing more space for family as on
weekends persons can spend quality time. They are modifying their restaurant so that to provide
greater experience and services to the customers.
Quality Management: The main aim of McDonald’s is to maximize the quality of their
product with the help of minimum cost and price limits. Along with this, the management of
McDonald’s is using production line method, which helps them in maintaining the quality of
product in a proper effective way. In order to this, they satisfy their consumers’ and fulfill their
expectations about their products and services and it also builds their brand image effectively and
efficiently (Kapadia and Yang, 2018). McDonald’s use a specific production line techniques to
maintain the product quality consistency which help in developing high-reliability as well as
quality of services.
Supply Chain Management: The McDonald’s serves their products at international
level. The company supply chain influence and helps its various restaurant present all around the

world. The McDonald’s has adopted effective strategy for distributing their goods i.e. supply
chain diversification, which will help operations manager for making effective as well as
profitable decision for this functional area of operations management. Moreover, this strategy is
involved in influencing more suppliers to connect with them from different various regions of
world, in order to reduce the risk of McDonald’s supply chain management. McDonald’s has a
strategy of supply chain diversification for this decision area of operations management. Such
strategy involves getting more suppliers from different regions to reduce McDonald’s supply
chain risks.
Operational activities help to formulate the robust plan to achieve the operational
excellence by obtaining the effective measures. For McDonald's its is important to understand
the operational activities and make changes to provide better services to the customers. Here are
some steps which help to make operational activities for McDonald's.
Set goals : It is important for the organization to set goals in order to achieve the desired
aim. For the company like McDonald's it is crucial for developing effectively strategies and
business plan to achieve it desired goals. A manager must develop the aim and also track
employees performance in order to achieve the goals.
Measure accurately: The organization must build the score card and track each and
every activities during the operational activities. In the context of McDonald's it is important to
have structured and plan to measure the employee performance and make changes if required.
This method help in gaining competitive advantages in the market and help to gain more market
share with the proper measures taken while making product and offering to the respective
customers.
Frequent Feedback: It is the prime responsibility of the organization to take proper
feedback from the customers as they provide information regarding the taste and quality of the
product. Manager of McDonald's is must take questionnaire regarding the price, quality of the
product and make change as per the requirements.
4 The core operational activities of McDonald’s which interrelate and adds value to
organization's operations.
There are various core operational activities of business which interrelate and add value
to organization's profit. Quality management which play an effective role for adding value to

company. The product quality and method which are used by employees while preparing food
aid to increase customer loyalty towards the brand and company. It ultimately increase goodwill
of company and increase large size customer in an effective manner (Ketokivi and McIntosh,
2017).
More consistency satisfies consumer expectations about McDonald's and its brand in this
strategic decisions area of operations management(Spring and et., al 2017). Another is supply
chain which is global supply and in various locations around the world. The decision area of
operations management which involves in getting more supplier from different regions to reduce
McDonald's supply chain risks. Thus it gives value to company buy skilled labor will take part in
activities and customer will able to get deliver of ordered items on time. Employees and skilled
labor will ultimately add value to company through higher production of good and service to
customers.
These are some of main core activities which can add value to organizational operations
the main aim is to earn profit but through providing best services to customer in an effective
manner. This will help company to increase their goodwill in market. McDonald has adopted
various operation strategies which emphasis's on the customers importance as well as customers
satisfaction. Firm has started using information technology, it help in developing new ideas
which improve new ideas. Management is using stock control data base system to avoid
unnecessary ordering. It has become very easy and time saving to maintain the stock effectively.
They have the main objective to serve people by fast delivery with low competitive price and
earn profit by expanding business worldwide. MacDonald have made stock rooms which are
directly linked with the sales system which provide actual time data to move product effectively.
5 Current trends which impact on business environment affect upon operation management.
Current trends in business environment impact on operations management both in
positive as well as negative manner. There are various trends which is changing according to
customer need and desires more over updated fashion styles hence these are some of major factor
which affect business (Kontogiannis and Balfe, 2017). In context to McDonald's which is
changing outlets an infrastructure according to customer feedback and desire. Their main aim is
to attract and satisfy customer in effective manner so that they can ultimately earn profit from
them. Some of major trends which affect business on operational management which is
discussed below:-

Technological: Update technology like online services which affect the business growth.
Customer which are now a days need all work on time and without wasting any energy they
should be served in attractive manner. More over smart internet searches with high tech
functions. McDonald's is working online delivery services that is 24/7 many applications links
which adopted by this company thus payment facility is also been modified. Credit card online
payment which helps customer to buy food items effectively (Merigó and Yang, 2017). They are
using the new technology such as coffee as well as tea machines where customers can serve
themselves without interaction with the McDonald's employees.
Ethics: The environmental ethics which affects company in negative manner so to
resolve issues effectively. McDonald's also continue to use paper, plastic cutlery and eating
utensils, such as paper plates and plastic forks which continuing abuse environment tearing down
their trees to help make eating utensils as well as throwing plastic wastes which damaging and
break down environment. Company is focusing on the operation competitive strategies which
emphasis on cost, speed and nutrition which have the motive to satisfy the consumers. They also
have strategy to refund the customers money if they have waited more than 5 minutes in the line.
This kind of business ethics develop goodwill and brand image in the market as well as in the
minds of customers.
Global relations: McDonald's is an internal brand and working globally hence it has
gained large customer base, countries and their values and cultures, more over global relations.
McDonald's which has created brand image and goodwill among customer which helped and
encouraged them to serve products at global level. Hence as per above mentioned current trends
which affected business operations in an effective way.
McDonald's became the leader in the fast food industry with their strong focus on
customer service, response to competition, and use of marketing techniques early on in their
development (How McDonald's Became The Leader In The Fast Food Industry 2019).
McDonald's is focusing on the advertisement towards children and families which create a good
impact on the families. There main key of success is to analyses the current trends and provide
satisfactory services to the customers. They are using advance logistic system and have
trustworthy suppliers which leads to growth and expansion.

6 The internal and external factors which influence the McDonald's.
There is various factor which affect business growth and status of company. The two
major factors are internal and external factors which influence business environment, hence these
factors depend on size, type and status of business. Internal environment are plans and policies,
human resources, financial and marketing resources, quality and size of infrastructure and many
more (Minh and Cuong, 2018). External environment has been divided into two parts micro and
macro, micro includes customers, competitors and marketing macro includes economic, political
and social. Hence these are some of various factors which influence in business decision. But
important way to which McDonald operational manger can analyze is through SWOT analysis
and PESTLE analyses.
PESTLE analyses of McDonald's which is discussed below:
Political  Political factor which affect McDonald's environment by
government policies towards issues such as a public health
which is increasing costs and impact in operations of
organization.
 Health issues which is obesity and make business activity
more expensive and special taxes on fast food increases or
certain ingredients are banned.
Economical  Economical which impact McDonald include international,
national and local conditions which affect global brand
Social  Social factor is one of the factor which operational manger
need to analyze that is changing tastes of customer which
impact McDonald's in terms of their sales
Technological  Technological can assist McDonald's in strengthening the
brand by providing different channels for ordering customers.
Legal  Regulation is concerned to big companies, As a company in
fast food industry McDonald's must match to legal
requirements such as labour and employment law, corporate
tax requirements.
Environmental  McDonald's itself cross hairs of environment list that is over

packaging while using its sandwiches and paper based packing
which breaks down into organic ingredients much quickly in
environment.
The SWOT analyses of McDonald's are as follow:
Strengths
McDonald's is successfully rolling new items like smoothies, burgers, smoothies and
expanding the range of menu choices for its customer. Company is growing its income through
recessions with strong product offering which attracted many customers. Hence sales are also
increasing for this business. This company operation are spread all over world and adopted many
economics and their currency. Hence company annual dividend payment has gone to fifty five
per share in 2005 which is huge profit during the year (Moutinho and Vargas-Sanchez, 2018).
Weakness
It is difficult to find prime location which build a set of golden curve for McDonald. In
U.S. restaurants are been saturated and due to potential cultural changes growth affected
internationally. The dividend growth rate which is slowing and most probably will come to slow.
Opportunities
There are opportunities for new restaurants outside the U.S and McDonald's which can
take advantages of them. China is a great opportunities for company. Menu innovations are
limited only by imagination. Low interest rates provides cheap capital for growth.
Threats
The main threats which is faced by this company is government rules and regulations
which is targeted for fast food. The major competitions player is like Starbucks coffee and Jamba
smoothies these are some of competitor which affect company. Commodity price which
increased which has a weak economy and limited ability which has pass the price hike of
customers.

7. The impact and implication of external and internal factor upon long term goal in McDonald's.
Internal Environment: The internal factor refers to the activities which are under the
control of company and they are not affected by the outer world. This kind of factor consist of
financial, Physical, human and technological factor which can slow the business activities. In the
case of McDonald company can control the internal factor and effective internal management is
the key to successful business (Schönsleben, 2018). There are different kinds of internal
environment which are explained below:
Employees: McDonald totally depend upon its employees in all the perspective. As
employees are considers as one of the important assets to any organisation. They must be treated
with dignity as they are the one who can achieve the desired goal of company. For long term
planning it is important fro company to make proper strategies which can reduce the cost and
maximize the revenues. Proper planning involves decision making for growth purpose and also
to build brand image.
Product and services: Company musty regularly evolve the product to meet the
changing demand of customers. This strategies will help McDonald to gain customer attractions
and it will help in generating profit. Company must do proper research and development before
launching their new product in order to avoid risk and uncertainty present in market. By proper
planning and understanding the business environment company should introduced their product.
It will facilitate McDonald for developing sustainable business model for long term.
Organisation structure: Company must have effective structure for making decision in
well defined manner. This method will save time and money of organisation and firm can
focuses on expanding market and profit. In the context of McDonald they must proper hierarchy
to manage customer as well quality of production (Skurka, 2017). With help of SWOT company
can acknowledge overall view of the company and help them to make strategic plan to achieve
organizational goals. Firm can make effective business plan for future and also help in
minimizing competition from market.
External environment: These are the factor which are not in control of company and
these factor may vary time to time. In the context of McDonald, it is important take effective

measure which to minimize the risk factor which occur due to External environment. There is
various external factor explained:
Economic: This is the factor which contribute the economic situation such as fluctuation
of interest rate, economic crisis, and so on directly and strongly affects the consumption of
buyers, and consequently, the profits of businesses. McDonald must identify the market of
particular region which is suitable for doing business. Economic condition plays a vital role in
profit maximization and expansion. If the economic condition is stable in a country, organisation
can operate business activities smoothly and if there is an unstable economic condition then it
may be difficult for the McDonald to generate profit for a long time period.
Technological factor: With the help of technology company can make more profits and
can expand their business activities beyond the boundaries. For McDonald it is important to
make changes in technological advancement so to can competitive advantages. With the help of
new technological advancement company can easily improve their productivity which in result
can serve more market and grow exponentially (Slack and Brandon-Jones, 2018). Technological
factor will help in improving strategic goals which can be useful in long term.
8. Figure out how operation management can support long term strategies:
Operations management is the process where raw material are changed into finished
goods. For making long term goal operation management must be effective so that organisation
can make more revenue as well as expand market share. When operations management is
efficient, goods and services are produced at a higher capacity, reducing the cost per unit.
Company leaders need to consider all strategies that modify efficiency and organization
earnings. Here are some steps which are involved in understanding operation management of
McDonald's.
Design goods and services: McDonald's strategies is to provide affordable products to the
customers at corner of the world (McDonald’s Operations Management, 10 Decision Areas
2019). However McDonald products are minimized the size of the product in order to make
them more affordable.
Quality management: The organisation aim is to provide the quality to the respective
customers as to develop brand image in the market. McDonald's is using production line method
to maintain product quality consistency. Satisfied consumers and effective comes under the
operation management.

Process and capacity design: McDonald’s process and capacity design is focused on
efficiency for cost-minimization that supports the company’s strategies. The managers of the
company is focus on improving the efficiency so that employees can perform their activity
effectively. This strategic decision area of operations management focuses on maintaining
process efficiency and adequate capacity to fulfil market demand. At McDonald’s, the
production line method maximizes the profit of the organisation.
Layout and design: This method include the layout and surrounding of the organisation
which help customers to spend quality time. McDonald's are expanding their layout which help
organisation to offer better services to their clients. And the employees will feel comfort and
spaciousness.
Operations management involves planning, organizing, and supervising processes, and make
necessary improvements for higher profitability. It can help in providing guidance in long run
and help to gain sustainable business model. Here is some method for which can help McDonald
to develop long term strategies:
Provide quality product: In this competitive world, it become necessary to facilitate
with quality product so to gain more and more customers. The goal of every business is to
provide the best goods or services they possibly can. In the context of McDonald, they must
provide quality offering and best services to their customers. This method can gain trust of
consumers and brand loyalty for company.
Improve supply chain: The supply chain is a critical part in an organization's success.
There is important benefit to moving or locating new facilities in countries that are close to
unique resources, such as expertise, materials and workforce. McDonald must have effective
supply chain to reduce their transportation cost. Proper supply chain maximize the cost as well as
help in generating profit (Spring and McCaffrey, 2017).
Understand Market: This can provide great insight into current markets, trends, and
customer demands that can help your organization plan a course for the future. For McDonald it
is important to understand the market scenario and taste of people in particular region. Proper
research must be don before launching new product. This increase the change of success for
McDonald and gain customer attraction with effective research.
System in as collection of various business activities which are integrated in order to
accomplish the goal and outcomes. It has various inputs and which are taken as consideration to

produce certain outputs. For the company like McDonald it important to have proper system so
that business operation can run smoothly. Systematic process in essential in operation
management which help to minimize the cost and increase the production capacity. McDonald
can use effective tools such to cost minimization, improved quality to enhance their market
share.
CONCLUSION
It has been analyzed from the above mentioned report that, by using effective marketing
strategies company can manage operation in well define manner. For company it has been
concluded that internal environment is factor which must be given more important as it help in
expanding the market share. Operation management help in developing long term strategies
which are useful in making sustainable business model.

REFERENCE
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