Operation and Information Management Report: McDonald's Case Study

This report delves into the realm of operation and information management, providing a comprehensive analysis of key concepts in production management and lean principles. It begins with an abstract outlining the importance of efficient work practices and lean management tactics. The report then provides an overview of McDonald's, a global fast-food chain, and critically evaluates the factors influencing its manufacturing and service process design, including product design, quality management, process capacity, supply chain, and inventory management. Furthermore, it explores lean manufacturing principles, such as the 5S technique, and their benefits. The report also touches upon the influence of service process design factors like customer participation, location, customer contact, standardization, and complexity. Overall, the report aims to provide a practical understanding of operation management within a real-world business context.

OPERATION AND INFORMATION
MANAGEMENT

ABSTRACT
In the present study, key concepts of production management are discussed so that better
work practices can be developed. Along with this, company can focus on lean management
tactics in order to have better development of activities. Operation management is a part of
management which allows to have appropriate designing and controlling so that overall
production process can be advanced in a desired manner. Quality management is also a critical
aspect which leads the business firm to an impressive level of success.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
A) Critical evaluation of main factors that influence the manufacturing and service process
design. ....................................................................................................................................1
B) Lean principle and benefits of implementation.................................................................7
CONCLUSION................................................................................................................................8
RECOMANDATATION.................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Production management generally refers to the administration of business exercises that
helps to build higher level of possible efficiency in organisation. Production management is
basically focused on converting the labour and material in to finished goods or services with
effectiveness which tries to boost up the profit of company. In a very simple manner, production
management helps a firm to create balance between cost and revenue that supports in generating
more profit in the business unit. A company's operation management includes the utilization of
resources, their staff, equipment, material and technology. Manufacturing management is
assembly of technology and tools which are used to define that how a product is developed. Lean
management is a systematic process that is using several techniques for boosting profits and
reducing the cost by removing wastage form manufacturing. For the present study McDonald's
is being selected, it is famous food brand that operates its business across the world.
A) Critical evaluation of main factors that influence the manufacturing and service process
design
OVERVIEW OF THE COMPANY
McDonald’s is the fast food firm which was found in the year 1940 as a restaurant and
operated by Richard and Maurice McDonald. The firm has headquartering in San Bernardino,
California, US. The company is started with their single product, Hamburger and their logo is
framed and used in nearly 1953 which is Golden arches logo. McDonald's is the largest
restaurant chain in entire world. They have been serving approx. 69 million customers on daily
basis in over 100 nations with nearly 36,900 outlets. It is well known for its burger (Guenthner,
2010).
The firm is dealing in a wide range of products which capture the minds of food lovers in
large numbers across the world but prominently, they offer hamburgers, different types of
chicken, French fries, chicken sandwiches and desserts (ALAM and DAMODARAN, 2014). On
other hand, on the basis of location and demand, they are also giving vegetarian items or wraps
to buyers.
McDonald opts two types of services: one is “eat-in” in which customers are ready to eat
stuff in the restaurant only and second is “take-out” here in, buyers demand for packing of food
and they consume it outside the premises of restaurant. These both facilities are also known as
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the “counter” and “drive through” services. The firm is operating their actions in accordance
with health and safety act and they are always showing their concern towards offered products so
that indirectly company will get aware with customer's health (Bumbudsanpharoke and Ko,
2015). As company is providing non veg stuff, for the same, they purchase more than 2 million
eggs per year. It expected that, it is a major impact on egg industry according to the “Animal
Welfare Standards”. Since a decade, McDonald’s has maintained their sound and effective
advertising campaign. On the other side, television strategy of company plays the central role for
firm. As an advertising and promotional tool, McDonald’s has used around 23 different slogans
in entire world that are based on different locations.
Operation management and supply chain of McDonald's:
Operation management is a part of management that is focused on designing and
controlling the production process and redesigning business operations in the manufacturing of
products and services. It helps in boosting the efficiency of business and minimising cost with
optimum use of resources. Operation management is a process of converting input into desired
output. McDonald's is using high tech technology for their production department (Jacobs, Chase
and Lummus, 2014). On the other side, supply chain is concentrating on managing the flow of
information. McDonald’s concentrates more on improvement in the business, for that it has taken
several decision for the development of business unit. These are as following:
 Designs of products and services- Company's operation management is working for
facilitating affordable products to its customers, cost of the product which are based on
buyer’s expectations. Hence, production department works to minimize the production
cost so that it can be offered to consumers at affordable rates (Wieland, 2013). Quality management- McDonald's always work for improving quality of its products and
services. For that concern department of company is using a production line method in
order to maintain quality of product on consistent basis. In this method cited firm ensure
that it provides hygienic products to consumers and provide such material that and meet
with their expectations.
 Process and capacity design- McDonald's capacity and process design is focused on
efficiency for price reduction which provide support to company's strategies. All
strategies are helping operation management of the firm to maintain efficiency and proper
capacity to demand of market (Ellram and Cooper, 2014). In the production department,
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they are optimising their resources that minimises the costing of whole production and
boosts up company's revenue as well.
 Supply chain management- McDonald’s supply chain is very effective and sound as it
provides support to various sites across the world. Company's supply chain is diversified
and hence, they are able to provide product in every franchise location. They also look
after inventory on the demands of time. They are having large number of suppliers those
which are working in different locations or regions. It is essential to have a strong supply
chain and hence, production will always remain in controlled (Manzour and Rahman,
2013).
 Inventory management- It is considered as one of the most important part of business.
Sound level of inventory management helps the production department to generate
development of product without any roadblock.
Theories of lean manufacturing and process management with critical evaluation
Lean manufacturing- This is a way to reduce waste and boost up the efficiency of
manufacturing of company. It concentrated on flow, the value of stream and reducing waste. The
process of lean manufacturing helps in developing goods by using few or less resources use in
order to compare with the different traditional productions. This helps in minimising the waste,
efforts of human, investment in tools and techniques, manufacturing space and engineering time
to frame a new product (Saleeshya, 2015). Lean manufacturing is also known as Toyota
production system because this company is very much effective in innovation and production
approach. Basically, lean manufacturing is a business management tool that concentrated on
minimising wastage from the process of production. Lean accounting is a synonym of lean
manufacturing that helps in all of the wastages form the resources of company's capital by
implementing the lean manufacturing principle to the firm's financial function (Westin, Chronéer
and Segerstedt, 2013).
5S Technique of lean manufacturing- Lean manufacturing is using a very prominent
techniques which consist of 5S. This is using a list of five Japanese word which are seiri, seiton,
seiso, seiketsu and d shitsuke its English transformation are like-
Sorting- It means reducing all unnecessary parts, tools only by keeping important thing in
the production .
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Straightening- It means setting all the activities and operations in order. Work place
needs to be managed. Other than that every activities should be on their place with the help
priority. All stuff needs to be arranged in that manner so that they can promotes sufficient
working and accessibility of tools (Kumar and Sharma, 2015).
Systematic cleaning- Cleaning at workstation helps in performance boosting.
Maintaining the cleanliness is a part of daily work. Hence, McDonald’s is performing in a
systematic manner and cleaning helps in attracting a large number of persons and it provides
hygiene as well.
Standardizing- All workplaces for certain job are needed to be identical. All workers
who are performing the job are able to work on any station with the different tool of same
location.
Sustaining- It means discipline or self-disciplines. It helps in reviewing the standards
and concentrated on new ways (Weske, 2012).
Benefits of 5S:
 It boosts up the safety.
 Makes visually attractive
 Enhances the quality and speed of work performance
 Minimises waste in all manner
 Increases the organisational effectiveness
Process management theory- This theory states that all the activities and operations
need to be properly monitored and planned. Basically, process management can be determined as
the application of skills, knowledge, tools, methods etc. to statement, measure, visualize and
control or improve process with objective to match with the needs to customers. Process
management is about arranging the different process and procedures and make company's
function more managed so that work can be done effectively and efficiently (Trkman, 2010).
McDonald's is having the process through their management are performing in effective and
smooth manner.
Influence factor of service process design
Designing a process of service has inclusion of some careful considerations of related
factors of services. Some of the issues are detailed such as-
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Service itself- Services process design has great impact on the overall development t as it
depends on their process like what types of services are offered by company then the process of
service is made. Hence, it is important to understand the services before making their process for
company.
Customer’s participation in process- Buyer participation is essential in the process of
designing services. It is a part of production process which effectively promotes the interaction
between buyers and company. McDonald’s is providing the services which provides a significant
aspects in order to meet the needs of buyers. Company ensures that customers have awareness
for the services that are provided by the restaurant (Rosemann and vom Brocke, 2015). It was
essential because self-services customers come to the counter and get their order so without
proper awareness about process the issues can be faced in service delivery
Location of service delivery- This problem is related with availability and accessibility of
services which are important. Location is major aspect for a restaurant because it helps in
targeting the customer and market. If offered product is accepted in the market then the
sustainable development can be taken into account. Then it comes to price of the product after
consideration of location the cost framing is the main thing for company. It is necessary to
ensure that prices of the product are affordable for the customers in order to have continuous
opportunities (Manzour and Rahman, 2013).
Level of customer contact- the presence of customers physically can be known as the
customers contact. The level of customer contact are be calculated for the numbers of time a
buyers spend in the restaurant in compare of total system.
Degree of standardization- The services are divided in different segments such as
standardize services and customized services. In context of standardized services, they are
delivered in a stranded manner. This generally refers to designed for high volumes with
concentrated services. In order to give standard services, it is necessary to have skilled workforce
so that better outcome can be attained. They are required worker force of effective and generally
low in technical skills (Saleeshya, 2015). Hence, the company will mould them in accordance to
their own set standard in order to match with the needs to various types of customers. It will be
called as divergence. On the other side, customized services are involved higher divergence
where judgement and flexibility are called for single part of the company. Workforce will make
interaction with their customers that helps on identify the needs of them in regards of future.
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Complexity of services- This refers of the amount of stages that are involved in delivering
the services to the customers. Hence, the level of complexity can be judged and measured on the
grounds of the number of activities that are involved the service delivery (Westin, Chronéer and
Segerstedt, 2013). There are some services which are larger on complexity along with higher in
divergence.
B) Lean principle and benefits of implementation
Lean principle is playing a major role in the food service industry. As it assembles the
rage of products, plants, tools and its uses. If all the principles are applied to the organisation like
McDonalds then it helps in boosting the efficiency or productivity as well as enhance the
revenue with minimum cost.
Principles of lean are:
Value- it is all about values that are determined by the needs of customers for a specific
product as what will be the timeline for manufacturing and delivery. For McDonald’s this
information is important to determine the values.
Value stream- Once the prominent objective is defined, second step is mapping values
stream. Its steps are involved some specific products from raw material to delivering the goods to
buyers. The method of value stream is basically an eye opening experience that helps in
identifying all the steps and actions that are taken in products or services by help of any process
(Kumar and Sharma, 2015). This process consists of design, procurement, HR, delivery and
customer’s services. In other words this is about identifying all the steps of each family and
reducing all those things which are not creating values in value stream.
Flow- After removing the waste form value stream, next step is to make sure that
remaining steps can be able to flow smoothly without any interruption, bottleneck and delays.
This step basically refers to ensuring that all the future steps will be followed without any issues
or hurdle in the stream of value. It has a tight sequence hence, the flow of products will be
smooth and will make customers happy (Weske, 2012).
Pull- This point is about highly improved flow and time. It will make this very easier to
deliver product on certain demand like the process of just in time. In which all products are to be
delivered at time of demand and it arises in market to work on its phase of sport things. It means
that customer will pull the product for company in accordance to the needs and as the result
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products are not needed to be made in advance (Trkman, 2010). They create more expensive
inventories that should be managed and sound services will be provided to the customers.
Perfection- As value specified, value stream is defined that all the waste are removed. Flows
and pulls are launched hence the process has begun and continues till they reach up to the
perfection level so that perfect values can be created with lessen the wastage (Rosemann and
vom Brocke, 2015).
CONCLUSION
From the above report, it can be concluded that production management is an important
factor in operations and information. This report emphasises on lean manufacturing which helps
in reducing the wastage and maintaining the quality of the product in the firm. Benefits of
application of lean principle are explained in the report by which it has been noticed that
MacDonald’s is focusing on quality management tactics in order to have sustainable
development. Moreover, it can also be articulated that lean principles also allow to have
tendency to improve the efficiency or productivity so that long term goals and objectives can be
accomplished.
RECOMANDATATION
It is an important factor in the current business scenario, it needs higher skills and
intellectual property. In the current scenario, digitisation is spreading it as roots hence it has
become more important to upgraded their management. This will be helpful in expansion of
business in a cost effective way. Organisation must adapt new technological aspect to cope up
with challenges. It is necessary for management to have advanced focus on minimizing
backtracking so that better process can be framed. Company can also focus on taking feedback
on every slot of production so that proper monitoring can be taken into account for sustainable
development. By having an effective communication among members regarding manufacturing
and production process, the key concept of operation management can be developed properly.
Effective control over inventory management is also needed to be advanced so that better
opportunities can be developed to have sustainable development.
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REFERENCES
Books and Journals
ALAM, M.R. and DAMODARAN, A., 2014. PRODUCT POSITIONING STRATEGY
CAUSING SUCCESS OR FAILURE: CASES-BASED OVERVIEW. CLEAR
International Journal of Research in Commerce & Management. 5(2). pp.12-15.
Bumbudsanpharoke, N. and Ko, S., 2015. Nano‐food packaging: an overview of market,
migration research, and safety regulations. Journal of food science. 80(5). pp.1-8.
Ellram, L.M. and Cooper, M.C., 2014. Supply chain management: It's all about the journey, not
the destination. Journal of Supply Chain Management. 50(1). pp.8-20.
Guenthner, J.F., 2010. Past, present and future of world potato markets: an overview. Potato
J. 37(1-2). pp.1-8.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain management.
New York, NY: McGraw-Hill/Irwin.
Kumar, V. and Sharma, R.R.K., 2015. December. Identifying critical success & failure factors
for TQM implementation: Extract from real case studies. In Industrial Engineering and
Engineering Management (IEEM), 2015 IEEE International Conference. pp.16-20.
Manzouri, M. and Rahman, M.N.A., 2013. Adaptation of theories of supply chain management
to the lean supply chain management. International Journal of Logistics Systems and
Management. 14(1). pp.38-54.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process
management. In Handbook on business process management. 15(1). pp.1-17.
Saleeshya, P.G., 2015. Lean practices in machinery manufacturing industries–a case
study. International Journal of Logistics Systems and Management. 20(4). pp.536-554.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management. 30(2). pp.125-134.
Weske, M., 2012. Business process management. In Business Process Management. 15(1). pp.1-
17.
Westin, M., Chronéer, D. and Segerstedt, A., 2013. Lean assemble-to-order manufacturing at
Ericsson. International Journal of Logistics Systems and Management. 15(1). pp.1-17.
Wieland, A., 2013. Selecting the right supply chain based on risks. Journal of Manufacturing
Technology Management. 24(5). pp.652-668.
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