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Supply Chain Management in McDonald’s : Essay

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Added on  2020-01-23

Supply Chain Management in McDonald’s : Essay

   Added on 2020-01-23

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SUPPLY CHAIN MANAGEMENT AT MCDONALD’S
Supply Chain Management in McDonald’s : Essay_1
Supply chain management is the most important feature of a firm’s operational strategy.It deals with the control of material flow in the organization right from the procurement ofraw materials to processing and final distribution to consumers. The supply chain function ofmultinational organizations becomes increasingly complex due to higher level ofglobalization. However, the advancement in technology has resulted in more efficientmanagement of supply chain functions in an organization. This essay provide an analysis ofthe supply chain management in McDonald’s Corporation, a US based fast food retail chain.The company operates in 119 countries across the world with more than 30000 retail stores.The role of emerging technology would be analysed after initial discussion on supply chainmanagement practices of the company (McDonald’s Corporation, 2008).McDonald’s prime business is to provide fast food products like hamburgers, Frenchfries, soft drinks, sandwiches, deserts and others to its customers. Management of a largenumber of materials is required for delivering these items. McDonalds has chief distributioncentres across several locations in different countries which can meet the demand of materialsfor 250 to 500 McDonald’s outlets so that branches need not to stock these raw materials.These distribution centres are not owned by the company but managed by distributionpartners which turns out to be an efficient management of supply chain (SHARMA, 2013).The supply chain structure of the company has core suppliers which can be categorised intotwo tiers. Tier 1 suppliers provide processed products e.g. vegetables, potato etc. and tier 2suppliers are growers. Distribution centres receive shipment of these materials throughlogistics services and upon requirements at restaurants, transportation of these materials iscarried out through logistics management systems across the company which also haveracking mechanism. Some of the materials like soft drinks and buns are directly brought torestaurants by suppliers. It can be inferred that the role of intermediaries like suppliers, logistic companies,distribution centres etc. is crucial in timely supply of required materials. The highly efficientmaterial management provides a competitive advantage to the company where the companycan focus on its core business of serving high quality fast food items. The distribution centresapproach provide economies of scale to the company and accounts for reasonable costsavings which boost the profitability of the company. Further, the role of relationship issignificantly higher in supply chain management where a strong network of distributioncentres and franchise outlets is being managed by McDonalds (Bisk, 2016).Emerging technologies plays significant role in McDonald’s supply chain whichensures that sufficient level of stocks are maintained to meet the demand and requirement of
Supply Chain Management in McDonald’s : Essay_2

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