McDonald's Supply Chain: Operation, Strategy, and Fresh Food Focus

This presentation delves into the intricacies of McDonald's supply chain, with a specific focus on the fresh food supply chain for beef. The agenda outlines key areas, including the operational function, where challenges such as speed of delivery, food safety, and cost are addressed. The presentation examines the importance of strategic planning with suppliers, particularly in product design and process selection, highlighting McDonald's adaptation of 'Mass Customization' to meet local demands. It also explores service process design, emphasizing employee motivation and rewards. Furthermore, the analysis covers process-flow analysis, lean thinking, quality management, forecasting using JDA Manugistics 7, capacity planning, scheduling operations, inventory management, supply chain management, sourcing, and global logistics. The conclusion emphasizes the need for McDonald’s to meet beef supply needs through its digitally connected network. The presentation references various academic sources to support its analysis.

THE SUPPLY CHAIN OF MCDONALDS’
OPERATION AND STRATEGY
[A FRESH FOOD SUPPLY
CHAIN (BEEF)]

AGENDA
The agenda of this presentation is to discuss
the different course chapters in the context
of McDonald’s supply chain. A fresh food
supply chain for beef will be the point of
focus for the study.

OPERATION FUNCTION
 McDonald’s is on its journey to facilitate a
Fresh Food Supply Chain
 However, it faces many complexities and
challenges
 Speed of delivery
 Safety of food
 Operational cost
 Supply challenges (All Things Supply Chain,
2020)

OPERATION AND SUPPLY STRATEGY
 Supply could be a challenge for effectively
managing a Fresh Food Supply Chain
 The only way is to work closely with suppliers
to take few strategies to ensure sufficient
supply
 McDonald’s has already done this in the past
with its ‘Smoothie’
 Worked with a group of suppliers to hit the
volume and price to meet the demand (All
Things Supply Chain, 2020)

PRODUCT DESIGN
 McDonald’s, the world’s largest buyer of beef
(All Things Supply Chain, 2020)
 Need to work closely with suppliers to meet
its supply needs
 The blend of beef varieties that suits the cost
and benefit needs of McDonald’s should be
managed
 Strategic planning with suppliers over certain
time span could meet the supply needs of
McDonald’s

PROCESS SELECTION
 Apart from its few permanent products like
Big Mac, basic hamburger, cheeseburger and
the Quarter Pounder, McDonald’s adopts
‘Mass Customization’ to meet the local needs
of its international locations (Panwar & Patra,
2017)

SERVICE PROCESS DESIGN
 McDonald’s consider motivation and reward
as the heart of its business strategy
 Restaurant managers are rewarded quarterly
bonus based on sales growth, mystery
shopper scores and profit
 In its company-owned restaurants,
McDonald’s rewards its employees with
incentives (Panwar & Patra, 2017)

PROCESS- FLOW ANALYSIS

LEAN THINKING AND LEAN SYSTEMS

MANAGING QUALITY

QUALITY CONTROL AND
IMPROVEMENT

FORECASTING
 JDA Manugistics 7, a forecasting application
used by McDonald’s
 Continuous evaluation and reporting of data
 Daily point-of-sale (POS) data at the product
list, item level, restaurants’ stock levels,
inventory, shipments, etc.
 Marketing data is also taken into
consideration
 Forecast accuracy measures is used to
measure the forecast output (Jeon et al.,
2016)