A Comprehensive Case Study: McDonald's Operations and Performance

This case study analyzes McDonald's operations management, focusing on capacity management approaches, the implementation of the four Ds (Design, Direct, Develop, Deliver), and the evaluation of five performance objectives (Quality, Speed, Dependability, Flexibility, and Cost). The analysis identifies McDonald's use of inventory appraisal and demand management for capacity control, alongside the application of a Speedee service system in design and JIT inventory management. Calculations are used to illustrate potential challenges, such as waiting times, and suggest solutions like order management apps, AI integration, data analysis, and staffing adjustments. The study underscores the importance of these strategies in achieving McDonald's mission and vision, highlighting the company's focus on quality, efficiency, and customer satisfaction. The document concludes by summarizing the key findings and the effectiveness of the implemented strategies.

Case study
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Table of Contents
INTRODUCTION...........................................................................................................................3
Q-1 What approaches does McDonald seem to take for its capacity management to reconcile
capacity and demand?..................................................................................................................3
Question 2 Analyze the implementation of four Ds by the McDonald Restaurant?...................4
Question 3 Evaluate what the five performance objectives mean for the operation in
McDonalds?.................................................................................................................................4
Q-4 are encouraged to use calculations to prove any challenges if there is any and suggest any
solutions.......................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Operation management refers to managing of business practices in effective way in order to
maintain efficiency and attain goals and objectives. There are various types of operations
performed within organisation. It require to ensure that efficiency of operations is maintained.
This is done by setting of certain standards and improving process. So, on basis of that overall
operation process works (Allen, and Carlson, 2018). However, there are some performance
objective set as well which has to be attained. In this report it will be described about a case of
McDonald and questions to be answered in it.
Q-1 What approaches does McDonald seem to take for its capacity management to reconcile
capacity and demand?
There is need to manage capacity in order to manage supply and demand. For that there
are various types of capacity management which is applied to acquire resources. Thus, by
analyzing the case study it can be identified that McDonald uses inventory appraisal for its
capacity management. In that they uses just in time management approach in which goods and
raw materials are acquired when it is needed to be used in production of products. By using this
it has led to decrease in cost. Moreover, it has led to control in production. However, it has been
identified that McDonald has followed approach of demand management. In that they are able to
forecast, plan and then manage demand for products (Anaf, and et.al., 2017). So, with that they
are able to manage supply and also maintain balance of capability of supply chain. In this no
forecasting is done of demand. Along with that, company also follows approach of level
capacity. Here, they do plan and forecast to supply demand in proper way. The forecast is done
for a particular period of time. Thus, quantity of output is equal to expected demand of that
particular period.
Therefore, using of these has led to managing capacity of production process and meeting
demand. Moreover, stock maintained is enough to meet demand. So, inventory levels are less
and it has resulted in controlling of production and leading to decrease in cost. Hence, overall
cost of production has reduced and also efficiency of it has improved. Besides, JIT approach has
been integrated within operational process so it has led to smooth flow of production process.
With that they are able to control inventory stock and production process. It also has led to
reducing cost of production.
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Question 2 Analyze the implementation of four Ds by the McDonald Restaurant?
McDonald is large scale fast food chain which provide variety of products to customers. It
operate at global level (Chaudhari, 2021). Thus, it require for them to follow an effective
implementation process so that operational process efficiency is maintained. However,
McDonald has implemented 4 D which is defined as
Design- Here, it has been found that has designed their process through speedee service system.
In that they have set a standard process which is based on high quality, methods, etc. However,
there are procedure specified in it of cooking instruction which led to gaining high customer
experience. In addition to that, quality operation is also included in process. McDonald has
digitalised their information system. The business model is based on service. Besides, products
of McDonald are designed in such a way that it is easily produced and delivered on time.
Direct- it is found that for giving direction McDonald set some performance objectives. This is
done in basis of operations performed. With that they are able to ensure quality of products. Cost
is objective set by firm in which they are able to minimise it. Alongside, food quality is also
performance objective of firm. So, it provide direction to employees to fulfil goals.
Develop- In this McDonald focus on employee management. The staff is given rewards on basis
of their academic education (Langert, 2019). Also, promotion are given to hard working staff.
Thus, rewards like employee of month awards and positive remarks and cognitions is given.
Moreover, employees are governed by specific procedures which is set. Thus, in this way high
quality of services are offered to customers. Hence, organization follows scientific management
principles in it.
Deliver- In this McDonald have implemented JIT in their inventory management. Here, stock is
kept reserved to fulfil demand. Also, several strategies are implemented to control of flow of
food processing. The JIT is also used in it which has led to focus on inventory. So, there is save
in cost as well. The pull strategy is used to control production.
Question 3 Evaluate what the five performance objectives mean for the operation in McDonalds?
It is necessary for firm to develop performance objectives so that it allows to serve as
baseline for attaining of mission and vision. Similarly, in McDonald as well there are different
performance objectives which is being set. This has enabled in achieving of goals in effective
way. Hence, 5 objectives are defined as:
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Quality- In this objective set is to improve product quality and maintain strong relation with
customers. Furthermore, by focusing on customer satisfaction it has enabled organization to
work on business model of service based. Another objective set is of food quality. There are
some measures and regulations set which has led to maintain high quality standards. In that there
is regular inspection of food being done (Morrell, 2020). Besides, it is also ensured that speed of
delivery is maintained as well.
Speed- Here, objective set is to reduce waiting time for less than 95 seconds. Hence, it will drive
experience and McDonald needs will be fulfilled through it. Thus, current waiting time has been
reduced which has led to gain their satisfaction.
Dependability- here, objective is set in which firm is entirely dependent on technology to serve
customers. This means technology like AI, VR etc. is being installed and services are delivered
through it.
Flexibility- the objective stated is that customer can easily pick up their order at anytime from
their food outlets. Besides, firm has implemented technology to improve service delivery by
which company is able to serve more customers daily. It has resulted in providing good customer
experience to them in their outlets.
Cost- Here, objective set is to minimize cost of operations and sell products at low price as
compared to competitors (Nuque-Joo, Kim. and Choi, 2019). They have set a performance
objective based on cost. In that McDonald are able to reduce their operation cost. Hence, with
that they are able to produce products at low price and generate huge revenue.
Therefore, these all are some performance objectives which is set by McDonald. So, it is
focusing on various aspects of attaining of mission and vision of company.
Q-4 are encouraged to use calculations to prove any challenges if there is any and suggest any
solutions
Here, in order to find out any challenge there is need to do calculation which is explained
as below :
Average number of units in system= u/1-u
0.41/1 - 0.41
= .41/.59
= .69
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Average waiting time in system = ts/1-u
= 5/ 1 - 0.41
= 5/0.59
= 4.41
Calculation of u
5*12 = 60
U = ra/rs
25/60 = 0.41
Thus, it is identified that there are certain solutions which can be implemented by
McDonald in order to reduce waiting time and serve more customers in day. So, it is as follows
 They can take orders from app and then by analyzing data they can provide delivery time
to each customers. In this way it will be easy for them to deliver products within
specified time and reducing waiting time. Also, it will enable in serving more customers
easily in day.
 McDonald can use robots and AI technology in their stores (Rajawat, and et.al., 2020). It
will be useful in serving customers in effective way and taking orders in systematic way.
Robots will store order in system and then give estimate time to customers that when
their order will be ready.
 The organization can use data analysis system in taking orders. By that it will be increase
taking orders and processing it faster. Hence, waiting time will be reduced through it.
 Here, more HR can be hired so they demand is met within time. The operations can be
performed more quickly and waiting time is reduced.
CONCLUSION
Hereby, it is summarized from above that McDonald has used demand management by
which they are able to manage capacity of production process and meeting demand. Also,
production process is controlled in effective way. In 4 D’s design followed is speedee service
system, in direct McDonald have set some performance objectives and in develop focus is on
employee management and in deliver JIT is implemented in inventory management. Moreover,
there are 5 performance objectives set by organisation that is based on quality, speed, flexibility,
cost and dependability. By that they are able to attain mission and vision.
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REFERENCES
Books and journals
Allen, N. and Carlson, M.J., 2018. Focus: Why McDonald's Tax Practices Matter to the Global
Labour Movement. International Union Rights, 25(1), pp.8-28.
Anaf, J. and et.al., 2017. Assessing the health impact of transnational corporations: a case study
on McDonald’s Australia. Globalization and health, 13(1), p.7.
Chaudhari, P.R., 2021 AN EVALUATION OF MCDONALD'S MARKETING STRATEGY
TOWARDS CHILDRETT.
Langert, B., 2019. The Battle To Do Good: Inside McDonald’s Sustainability Journey. Emerald
Group Publishing.
Morrell, K., 2020. How many McDonald’s are there? anti-union activity and global franchise
operations. SAGE Publications: SAGE Business Cases Originals.
Nuque-Joo, A., Kim, D. and Choi, S., 2019. Mcdonald's in Germany: Germans, Still
Lovin'It?. Academy of Strategic Management Journal, 18(2), pp.1-20.
Rajawat, A. and et.al., 2020. Factors: Responsible for McDonald's Performance. Journal of the
community development in Asia, 3(2), pp.11-17.
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