MGT737 - Analysis of McDonald's Supply Chain Management

This report provides an analysis of McDonald's supply chain management, highlighting its scale and global reach. It details McDonald's horizontal supply chain system, emphasizing supplier involvement and the introduction of diverse menu options. The report examines key components such as Coca-Cola, raw materials, distribution centers, and restaurant stock, as well as planning processes and supplier relationships. It also discusses McDonald's competencies in technology and innovation through partnerships like the one with eMac digital, which improved communication and e-procurement. The company's effective material management, delegated to distribution centers, and close relationships with suppliers contribute to its efficient supply chain. The report concludes by noting McDonald's use of horizontal supply chain management, information sharing, and waste reduction strategies.

MCDONALDS SUPPLY CHAIN MANAGEMENT 1
MCDONALDS SUPPLY CHAIN MANAGEMENT
Course
Professor
University
Date

MCDONALDS SUPPLY CHAIN MANAGEMENT 2
McDonalds supply chain
Introduction
McDonald according to (Jacobs, Chase & Lummus, 2014, p 533-534) has one of the largest
supply chains since it serves millions of customers across the world in their outlets. The
company is known for the supply of fast foods especially hamburgers to almost 36000 outlets in
119 countries every day. The company uses a horizontal supply chain system which contains
involving of suppliers in their activities which creates a win-win situation. The company always
comes up with different types of food to add on their menu such as salads and smoothies to
maintain its sustainability and customer satisfaction worldwide. To add on that, operations in the
restaurant can be operated by affiliates, the corporate itself or franchisee and here is where the
company’s revenue is generated from.
McDonalds supply chain components
Raw
Materials
Shipment
180
restaurants
Restaurant
stock
Cash register
Navi logistics
Distribution
centre
Demand supply
planning
Abroad
Shipment
Order
Coca Cola
Easy Bait
Pinar Et
Danone
Konya Seker

MCDONALDS SUPPLY CHAIN MANAGEMENT 3
Plan
McDonald can plan so well for the materials that is needed in the processing of foods. The
company delegated material management to distribution centers in that one center should be able
to plan for materials that will be used by many outlets; this promotes commitment and a
reduction in cost (Mangala & Lalwani, 2016). The company also has first tier and second tier
suppliers. First tier suppliers are those that supply products that are already processed such as
chicken to the distribution centers while second tier suppliers are those that transport the goods
from the distribution centers to the company as they are ordered.
Competencies of McDonald
Technology and innovation
The company partnered with a company that promoted business related to the internet. eMac
digital company helped the company create a good platform for advertising their products as well
as communication between the company and the outlets was also enhanced. E-procurement as
advised by (Zabeen, Wui & Lu, 2016, p 60-80) was also introduced and it helped involve
suppliers in the supply chain. People from all restaurants can place orders from suppliers quickly
and this has totally cut down the labor costs making McDonald very competent.

MCDONALDS SUPPLY CHAIN MANAGEMENT 4
Relationship with suppliers
Macdonald has made sure it has good supplier relationship. It has a system that promotes win-
win situation in that both the suppliers and the company can succeed all together. This system
has contributed a lot to the company’s supply chain.
Material management
The company delegated material management to the distribution centers and this has been very
effective. The distribution centers place orders for materials which when brought there they are
transferred to the company for processing. This has promoted commitment by the distribution
centers and effective material management.
Comments on the competencies of the company
Macdonald uses the horizontal supply chain management mainly. The company has been able to
maintain a close relationship with its suppliers and sharing of information using new forms of
technology. If there is any development of innovation, technology or new product design, the
company communicates to everyone that is involved in the supply chain. The effective material
management as recommended by (Stadtler, 2015, p 3-28) is done by distribution centers in the
company to ensure zero waste has also made it efficient.

MCDONALDS SUPPLY CHAIN MANAGEMENT 5
References
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain management
(pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Mangan, J., Lalwani, C. and Lalwani, C.L., 2016. Global logistics and supply chain
management. John Wiley & Sons.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Zabeen, S., Wei, J. and Lu, X., 2016. Development of E-business solutions for fast food
restaurants. International Journal of Services and Standards, 11(1), pp.60-80.