Business Operations Assessment: McDonald's Case Study Analysis

This case study analyzes McDonald's business operations, focusing on its capacity management and the implementation of a Just-in-Time (JIT) system. It examines how McDonald's utilizes the JIT system to improve efficiency, reduce waste, and enhance customer service. The analysis covers the 'four D's' of operations management (Direct, Design, Deliver, Develop) as applied by McDonald's. Furthermore, the study explores McDonald's five key performance objectives: quality, customer satisfaction, cost, food quality, and modern technology. The case also touches upon how McDonald's adapted its operations during the COVID-19 pandemic and includes calculations related to customer arrival and service times. The document concludes by referencing relevant academic literature supporting the analysis.

Managing Business
Operations Assessment
Data analysis case
study

Approach used by McDonald’s for its capacity management
JIT – Just in time management
JIT system can be defined as the system which assist an organization in it's working as
per the time scheduled or before time in order to make their operations more effective and timely
according to their suppliers and customers so that they can be very well satisfied in supplying
and purchasing the products from the company in a more easier way. Moreover, it supports the
firm in controlling of the wastages at the time of manufacturing the products by controlling the
production and wastage of raw materials as well. Thereby, this technique is used by the firm to
enhance their customer servicing strategy and to make their production more cost effective
(Bamana, Lehoux and Cloutier, 2019).
JIT system utilized by McDonald’s has some views such as it has a characteristic of
reduction in stock list in supply chain, this assist the firm in accomplishing the demands of the
consumers on an instantaneous basis because of catering minimal quantities of deliveries in the
food production chain at McDonald’s. It has also adopted the pull system using this approach
which helped in control in production and raw materials. Moreover, it has also backed up in the
engagement of employees in participation in such plan of action and procedures (Knauss, Liebel,
Schneider, Horkoff and Kasauli, 2017).
This approach is used by the McDonald’s to overcome the challenges faced by the
company due to the Covid-19 situation. Challenges they were facing like overall output were
varying because of variety in production methods, customers were demanding variety of end
products, there were less degree of visibility of end products to the customers and the less
volume aspect. But after the adoption of the JIT system, they have overcome such situations like
reducing the waiting time for the customers so that they can give best services to them and
reducing the cost of production for more savings. This has solved the methods of production
problem and varying demand of the customers.
Implementation of the four D's by McDonald’s
Direct
This point is applied by the company to direct the over all strategies that has been
planned and are to be executed in terms of creating the vision and meeting their expectations into
reality because it is important to direct the regulations, norms and policies adopted by the firm
and if they are not being directed then it can be difficult for them to convert their vision into
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reality. Directing implementation is not only adopted in the production process but it can be
adopted by the firm in various other departments of an organization as well like finance, human
resources, research and development and many more necessary areas of the company. Therefore,
McDonald’s has executed this direction implementation so that they can turn what they have
expected into real time execution process.
Design
Company has applied this approach to design the tactics and processes through which the
firm will follow to fulfil their goals and objectives because McDonald’s always set some targets
before implementation of some new strategy or tactics, thereby, they are highly requires the
designing approach for better formulation of goals and objectives of sales and production for
better experience to their customers. They take care that their designing must be cost effective
which means it should be more expensive than before because they believe that investment is
good but unnecessary expense without any return can lead to losses to the firm that is why their
main motive for the designing process is to maximum utilisation of resources to accomplish their
targets in a more effective manner (Terwiesch, Olivares Acuña, Staats and Gaur, 2020).
Deliver
This method is adopted by the company to deliver the products and services to their
customers in minimal time and minimal waiting and response time period because the main aim
for the company throughout their operating period is the maximum satisfaction of their
customers, that is why they have adopted the approach of delivery which states that delivery of
products and services must be done as per the expected waiting time of the customers and not
more than that because if waiting and response time is delayed than the customers can easily
switch to another brand and that is why they are focusing on fast delivery services to their
customers. Therefore, delivery time minimization strategy has adopted by the company for better
customer servicing in a market.
Develop
Company has acquired this tactic to develop the enhancement and improvement in
existing policy and procedures for providing more better customer experience by the firm
because they believe that development is required by the company to grow and maintain it's high
position in the market. That is why they have adopted the tactic of development from among
these four D's of operations management. McDonald’s is achieving this approach by regulating,
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formulating and updating their existing rules, regulations, policies, norms and procedures for
more betterment in an organization for not only the benefit among the customers but also for the
employees who are working in the company so that they can also work in a more improved
manner to serve their customers in a more enhanced way (Polonsky and Waller, 2018).
Five performance objectives mean for the operation in McDonald’s
Quality of products
Products like raw materials and inventories are needed to be looked out by the company
because they are considering this as a major objective because they have adopted the technique
of total quality management so that they can overlook their production methods and raw
materials used by the staff and how much inventories are actually needed and how much it is
going waste. Their target is to manufacture the products in an sustainable manner so they ensure
that they must not compromise the quality of the products and therefore, they take care of
minimum wastages and maximum output of the production of their products and services
(Bouranta, Psomas and Pantouvakis, 2017).
Customer satisfaction
Objective of the company is to satisfy the customer by providing them best services in
minimum waiting time to improve the over all experience of the customers because maximum
customer satisfaction is one of the major objective of the company so they had adopted all those
approaches through which customers can gained their expected and desired satisfaction from the
company and can maintain the customer loyalty towards the firm so that the company can
maintain stability in an organization. That is why they have adopted the just in time management
tactic to deal with the customer experience in an organization for more sales and revenue
generations.
Costs
Company's objective is to minimise the cost of production and operations so that they can
achieve more savings for better return on investment because this is also the one of the objective
of McDonald’s that they are highly indulge into savings from unnecessary expenses and
investing the same in research and development department or investing in areas where they
could get the maximum return out of money invested. It has an efficient working finance team
who has a good knowledge of investment that where the company can invest so that ROI for the
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firm can be achievable which was extracted from the savings point of view via decreasing the
cost of production and operations but not affecting the quality of it.
Food quality
Objective of the firm is to maintain the quality of the food by inspection of the quality
provided by each store to their customers because the goal of the firm has defined the best food
quality must be supplied to the customers which should be healthy in nature and not rotten.
Therefore, food inspection is being done and send to the quality management which decides that
this food cam harm the person or not. Therefore, McDonald’s provides best quality food because
it is considered as one of the important performance objective by the company.
Modern technology
This objective is adopted because company wants to provide fast services to their
customers by digitizing their servicing operations management because McDonald’s has a aim of
using advanced technology so that they can be effectively working for the customers providing
them the fast services as much possible for them. That is why they have adopted more of online
services so that customers also feels sophisticated visiting to the restaurant. Therefore, adoption
of modern technology in terms of servicing the customers are counted in the investment which
can be a high return in terms of customer loyalty and income generation (Jogaratnam, 2017).
McDonald’s performance objectives has highly focused on the challenges faced by the
company due to pandemic because of Covid-19 situation such as these performance objectives
has benefited the company in fighting against the pandemic. Quality of products are stated in
such way that it defines the healthy nature so that customer prefer purchasing that, customer
satisfaction are ensured via best servicing and decreasing the crowd in the restaurant, they have
decreased the production cost so that they can save maximum in order to invest at some good
places, they have increased the food quality because customer will not prefer low quality in this
pandemic so they use to take care of the quality of the food products and they used the modern
technology in terms of payment and less touching the resources of the restaurant in order to
safeguard the health of the customers because of Covid-19 increasing cases. Therefore, they have
handles and managed the situation very well by forming their performance objectives so that
they cannot lack in serving the customer in any way.
Calculating the average number of customer which are arriving till average time
Average number of units in the system= u/(1-u)
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= [5/ (1-5)]
= [5/-4]
= [-1.25]
= 1.25
Working Note:
u=ra/rs
=25/5
= 5
Average waiting time in the system= ts/(1-u)
= [5/ (1-1.25)]
= [5/-0.25]
= [-20]
= 20
Service rate= ts*12
= 5*12
= 60 Minutes
= 60 minutes per order
There are about 20 people per hour there for the delivery of their product which is there
for the orders. To minimise the waiting time there is need to show some improvement in the
waiting time which is there can help in getting such high level of delivering of services which is
there can help in getting large customer base in such limited period of time. Using the
technology and different online platform which can help in getting order and can help in getting
deliver as per arrival of the customer which can help in saving the waiting time and also can be
there some minimised time to get the delivery on some limited period of time. There can be the
challenge to get the delivery in such limited time which can help in getting high level of
customer satisfaction which is there can help in generation high productivity which also can help
in getting large profit.
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References:
Books and Journals
Bamana, F., Lehoux, N. and Cloutier, C., 2019. Simulation of a construction project: assessing
impact of just-in-time and lean principles. Journal of Construction Engineering and
Management. 145(5). p.05019005.
Bouranta, N., Psomas, E.L. and Pantouvakis, A., 2017. Identifying the critical determinants of
TQM and their impact on company performance. The TQM Journal.
Jogaratnam, G., 2017. How organizational culture influences market orientation and business
performance in the restaurant industry. Journal of Hospitality and Tourism
Management, 31, pp.211-219.
Knauss, E., Liebel, G., Schneider, K., Horkoff, J. and Kasauli, R., 2017, September. Quality
requirements in agile as a knowledge management problem: More than just-in-time.
In 2017 IEEE 25th International Requirements Engineering Conference Workshops
(REW) (pp. 427-430). IEEE.
Polonsky, M.J. and Waller, D.S., 2018. Designing and managing a research project: A business
student's guide. Sage publications.
Terwiesch, C., Olivares Acuña, M., Staats, B.R. and Gaur, V., 2020. A review of empirical
operations management over the last two decades.
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