McDonald's Operations: Speed, Efficiency, and Technology Impact

This report provides a detailed analysis of McDonald's operations management, exploring the importance of speed as a key performance indicator within the hospitality industry. It defines and explains the concepts of throughput rate, efficiency, and productivity, illustrating how increased speed positively impacts all three in the context of McDonald's. The report also evaluates the influence of new technologies on other performance objectives, specifically quality, cost, flexibility, and dependability. The analysis covers McDonald's operational strategies, including customer satisfaction, process layout, and the impact of digital ordering. The report concludes by emphasizing the interdependence of throughput, productivity, and efficiency as indicators of effective business operations and highlighting how McDonald's has improved performance through its operational strategies and technology adoption. References to relevant literature are also provided.

RUNNING HEAD: HOSPITALITY OPERATIONS MANAGEMENT
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Hospitality Operations Management
McDonald

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Introduction
Operations Management is defined as the process of managing business operations such as
designing, manufacturing, distribution, supply, and services. In the hospitality industry,
operations management help to solve the issue of balancing resource productivity against service
level (Reid and Sanders, 2019). Further, operations management includes facility location,
facility layout, product design, process design, scheduling, production planning, quality control,
time standards, wage payment, capacity planning and forecasting (Slack et.al,2010). In order to
understand these concepts, an organization has been selected that is McDonald's. This report
consists of the importance of speed as a performance indicator, concepts of throughput rate,
efficiency and productivity and impact of new technology on all these aspects for McDonald.
Explain why speed is such an important performance objective for restaurants like
McDonald’s.
The hospitality industry depends on the services provided by businesses to their customers.
McDonald since beginning focused on providing customer services and each restaurant gains a
strong brand image by giving good customer services and quality food. Speed is considered as
the indicator for McDonald because it ensures customer satisfaction. Operations strategies play a
vital role in attaining organizational goals. By using these operation strategies, an organization
maintains and controls all of its operations. McDonald operations strategies based on three
sections, firstly customer satisfaction and customer importance.
Speed is one of the criteria for McDonald that contributes to customer satisfaction. Most of the
customers are happy because of speedy services. McDonald has the policy to serve customers in
minimum time and with the minimum waiting time. The most significant thing on which
McDonald operational department focus is the customer’s satisfaction. Customer satisfaction can
be attained if it serves the customers with good quality food quickly with minimum price. Speed
depends on McDonald process layout or kitchen layout and in order to reduce waiting time and
ensure quick delivery McDonald has a specific type of layout. The process layout as each
process has given proper space and resources in order to ensure high productivity and efficiency
in operations. Along with that, each process is performed by skilled staff members and they
always try to contribute the best of their ability. All this collectively contributes to the delivery

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speed and ensure the delivery of food to customers on time. Hence, leads to customer satisfaction
and considered as important performance indicators in restaurants.
Define and explain the concepts of throughput rate, efficiency, and productivity. Explain
why increased speed can improve all of them in the context of McDonald’s.
The throughput rate is defined as the number of flow units that includes money, customers,
services, produced and goods going through the process per unit time (Reid and Sanders, 2019).
For instance, the consumer served in an hour. Further, this indicates the movements of outputs
and inputs within the production process. It is considered as an important parameter in the
operation management of a restaurant. Further, this parameter is related to the efficiency of
operations as higher the throughput level, higher the revenue for the company.
Efficiency indicates the amount of work done in a particular period regardless of completed
products. This is related to the quality of work or generating more output with minimum waste
by using minimum resources and by investing fewer amounts (Hill and Hill, 2017). For instance,
if a staff member in McDonald's is serving 100 customers but out of that 40 customers are
dissatisfied and another employee serving 80 customers but all are satisfied than the most
efficient worker is the second one.
However, productivity is related to cost and linked to efficiency. The productivity is measured by
comparing the performance of employees, distribution channels and locations. For instance; if an
employee in McDonald is serving 90 customers in a month and another employee is serving 120
customers in a month than the second one is more productive (Reid and Sanders, 2019).
In the context of McDonald, efficiency, productivity and throughput can be improved and
dependent on speed. McDonald focuses on quick delivery due to that the company can offer its
products and services to more customers this directly impacts on the productivity as if more
customers served more products are required this leads to higher productivity and more revenues
for the company. Further, by using the same space, people and equipment the company can
provide more goods and services to customers and utilize all its resources to a greater extent.
McDonald focuses on customer satisfaction and in order to attain this emphasis on speed or
quick delivery to its customers. Due to that many aspects such as productivity, efficiency and
throughput level increase as speed related to productivity because quick delivery of products to

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customers leads to more demand and boosts the production process
(Hospitalitytechnology,2017). This indicates that employees are giving the best of their in the
business operations that improve the productivity of each and every individual and collectively
increase outlet productivity for McDonald. As McDonald has set premises to handle any number
of customers, as there are many counters to serve customers, a comfortable environment and an
appropriate process layout for the production process.
The concept of Just in Time and Wait time Zero has been used by the company for quick and
speedy services. This further contributed to higher efficiency as in the same layout and with
limited resources that include people, equipment, and area the company is offering more to its
customers. This indicates higher efficiency and utilization of each and every outlet to a greater
extent along with that profitability of McDonald's increased with higher revenues and sales.
According to the Kellogg school of management, reduction in wait time for customers leads to
more satisfaction and due to that market share of McDonald increased by 3 percent
(Hospitalitytechnology,2017). This is evidence that quick services or speed lead to a reduction in
waiting time and that resultant in higher satisfaction. Reduce wait time also leads to serving more
customers in an hour this shows increasing throughput level. Hence, here improving speed leads
to higher efficiency, more productivity, and increasing the throughput level.
Evaluate the impact of the new technology on two of the other four performance objectives
(quality, cost, flexibility, dependability).
Technology changed the way the service industry or hospitality industry operates. New
technology adoption by companies operating in this industry leads to higher efficiency. Looking
into McDonald, when the company adopted technology, the cost of operations reduced and
flexibility is improved. As with digital ordering the company enjoys the benefits of shorter lines,
faster speed, and reduced time spent on low-value interactions (Choi et.al,2018). With
technology, McDonald provided flexibility for customers that includes choosing table service,
ordering online and access to food by using various digital channels, drive-thru, and curbside
pickup when they order.
Further, the use of technology by McDonald makes the product layout and process layout more
effective. That helps the company to compete in the market in terms of quality as with that the
company is able to produce standardized products in all its outlets such as the use of the best

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equipment. Hence, with the use of technology McDonald maintains quality in all outlets. Further,
with the help of technology improvement McDonald improved 60 percent throughput in their top
locations and this could bring over $5.4 billion on annual basis from digital orders (Wamba
et.al,2017). Hence, the improved overall performance of the company and a few performance
indicators are quality, flexibility, throughput level, productivity, speed, durability, and cost.
The impact of technology on other performance indicators is greater as mainly on the quality of
products and services provided and the cost of production also reduced. Considering the case of
McDonald it is analyzed that the use of technology by the company speeds up the process of
getting a meal to customers and improved the process of paying the bill. Due to that, the quality
of services provided to customers enhanced as lead time reduced, efficiency improved, and all
that collectively leads to continuous improvement (Hospitalitytechnology,2017). Hence,
technology improvement impact on one of the performance indicator that is quality.
Furthermore, another performance objective is flexibility and with the help of technology,
McDonald operations strategies become flexible as the company can provide services and
products to its customers on any digital platform, any location and can opt for any payment
channel as per the convenience of customers. Moreover, technology advancement also improves
process layout and proves to be effective in eliminating unnecessary steps in production
(Priyono, 2017). Hence, in the context of McDonald it is analyzed that technology impacted the
quality of products and helps the company to offer standardized products and quick services to
its customers along with that flexibility is attained because of the digital ordering platform.

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Conclusion
It is concluded from the above analysis that operations management is termed as the managing
activities related to production, distribution, designing and many more. In the above report, the
concepts of operations management are understood in the context of McDonald's. It is identified
that speed is a key performance indicator and technology impacts mainly on the cost and quality
of goods and services offered by McDonald. Thus, throughput level, productivity, and efficiency
are the concepts that are interdependent and are an indicator of efficient business operations for
the company. It is concluded that McDonald's performance improved because of its operations
strategies and the adoption of technology.

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References
Choi, T.M., Wallace, S.W. and Wang, Y., 2018. Big data analytics in operations
management. Production and Operations Management, 27(10), pp.1868-1883.
Hill, A. and Hill, T., 2017. Essential operations management. Macmillan International Higher
Education.
Hospitalitytechnology,2017. McDonald commitment to digital ordering could make wait time
zero a reality. Accessed From: https://hospitalitytech.com/mcdonalds-commitment-digital-
ordering-could-make-wait-time-zero-reality
Priyono, I., 2017. Effect of Quality Products, Services and Brand on Customer Satisfaction at
McDonald's. Journal of Global Economics, 5(2), pp.1-4.
Reid, R.D. and Sanders, N.R., 2019. Operations management: an integrated approach. John
Wiley & Sons.
Slack, N., Chambers, S. and Johnston, R., 2010. Operations management. Pearson education.
Wamba, S.F., Ngai, E.W., Riggins, F. and Akter, S., 2017. Transforming operations and
production management using big data and business analytics: future research directions.