Supply Chain Analysis: McDonald's Company Overview and Risks

This report provides a comprehensive analysis of McDonald's supply chain, starting with an executive summary that highlights key aspects of the business, products, and supply chain. It offers an introduction to McDonald's, including its history, global presence, and market position. The report delves into the specifics of McDonald's supply chain model, emphasizing its vertically integrated structure and its impact on customer value and brand health. It also explores the supply chain's evolution, referencing Ray Kroc's long-term vision, key supply chain partners like Martin-Brower, and the tracking systems employed to share information. Furthermore, the report identifies and lists potential risks, and applies techniques to measure their impact, and assess and evaluate the risks to classify and prioritize them. The report highlights the importance of communication, collaboration, and the company's response to past challenges, such as the bird flu outbreak. The report concludes by reiterating the importance of a robust supply chain for McDonald's success, emphasizing the need to maintain and enhance the current approach. The report is a student submission available on Desklib, a platform providing AI-based study tools.

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Research Assignment
McDonald’s
6/22/2019

McDonald’s
Executive Summary
The report covers the details of the business and products of McDonald have and include the
supply chain details for the organization. The supply chain strategy and network is covered in
the report.
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McDonald’s
Introduction
McDonald’s is an American multi-national fast food organization that was established in the
year 1940. The company was found by Richard and Maurice McDonald and it was set up in
San Bernardino, California. The company is currently world’s fourth largest employer in
terms of the number of employees associated with the organization. There are over 36000
restaurants all across the world in over 100 countries (Mcdonalds, 2019).
The company has been able to establish itself as a leader in its industry and one of the factors
behind the success of the organization is its ability to manage the supply chains. The
company outsources 100% of its supply chains (Boxaroundtheworld, 2019). The supply chain
model of the organization is based on the unique mix of operating principles that can create
long-term wealth.
Supply Chain
The supply chain model in the organization has succeeded in providing enhanced customer
value and has been able to maintain better brand health. The overall business performance
also improves with the aid of unique supply chain model.
The vertical integrated supply chain model is the one that is followed by the organization.
The company has been able to manage vertical integration to reduce the costs and enhance
the profits. For instance, the company grows beef with the associated with the contracted
producers and process the meat on their own. The spices and mixes are created in the
factories that are contracted and produce the vegetables with their contractors. There is
enhanced form of control that is applied to manage such vertical supply chain in the
organization (Boxaroundtheworld, 2019).
There have been certain issues around the profits and revenues earned by the organization.
However, one of the positive aspects associated with the organization is its supply chain. The
company was listed at the second spot in Gartner’s Supply Chain top 25 (Mcdonalds, 2019).
The company maintained its position at the sport for four years in a row and has been able to
maintain its position in the top 10 since past six years (Mcdonalds, 2019).
The long-term supply chain for the organization was set up by the founder Ray Kroc
(Boxaroundtheworld, 2019). The strategy made sure that it was beneficial for the
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McDonald’s
organization as well as the supplier groups associated with the same. The three main elements
included in the supply chain are the employees, owner of the restaurant, and the supply chain
partners associated with the company (Boxaroundtheworld, 2019). As per the strategy,
McDonald’s makes sure that the relations with the suppliers and restaurant operators are
maintained to make the entire process successful.
There are numerous supply chain partners of the organization that have been associated with
it since the time of its establishment. As a result, there is enhanced trust that has been
developed and the overall costs are also kept low. For instance, Martin-Brower Company
LLC is the largest distributor of the organization that is associated with McDonald’s since
1956 (Theinnovationenterprise, 2019). The company first started delivering paper napkins to
the restaurant established in Des Plaines, Illinois. The company has now developed
relationships with over 15,000 locations across North America (Theinnovationenterprise,
2019). The distribution centre provides numerous services in the areas of warehousing,
logistics, and transportation to 250 to 700 restaurants and there are two deliveries that are
provided to every restaurant in a week at a bare minimum (Theinnovationenterprise, 2019).
There is also an enhanced tracking system that is followed by the organization so that it
shares information with the suppliers and the restaurant owners/operators cover the point of
sale information for every item along with the stock levels and inventories (Ekwueme,
Egbunike & Onyali, 2013). There is a great degree of communication and collaboration that
is carried out by the organization. The company acts as a conduit between the network of
suppliers, vendors, and the franchise partners (Ekwueme, Egbunike & Onyali, 2013). There
are council meetings that are conducted to connect with the suppliers in the areas of
innovation and technology. There have been some of the disaster situations in the past. For
instance, there was bird flu outbreak that came up in 2015 and it had an impact on more than
40 million egg laying hens. However, the company could maintain the supply and quality due
to close collaboration.
Conclusion
McDonald’s is an organization that has global presence and has been successful in achieving
enhanced customer trust and engagement. One of the primary factors contributing towards
the success is the strong supply chain network of the organization. The company follows
vertical integration supply chain activities to make sure that it continues in providing
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McDonald’s
enhanced services to the customers. The company needs to maintain the same approach so
that the supply chain network is enhanced at all times.
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McDonald’s
References
Boxaroundtheworld. (2019). McDonald’s Supply Chain Management is The Secret to
Their Success. Retrieved from https://boxaroundtheworld.com/mcdonalds-supply-
chain-management/
Ekwueme, C., Egbunike, C., & Onyali, C. (2013). Benefits of Triple Bottom Line Disclosures
on Corporate Performance: An Exploratory Study of Corporate Stakeholders. Journal
Of Management And Sustainability, 3(2). doi: 10.5539/jms.v3n2p79
Mcdonalds. (2019). McDonald's - Official Global Corporate Website. Retrieved from
https://corporate.mcdonalds.com/corpmcd.html
Theinnovationenterprise. (2019). McDonald's’ Supply Chain Success Shows The
Benefits Of Collaboration | Articles | Chief Supply Chain Officer. Retrieved from
https://channels.theinnovationenterprise.com/articles/mcdonalds-supply-chain-
success-shows-the-benefits-of-collaboration
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