Operations Management Assignment: McDonald's and Amazon Analysis

This assignment analyzes operations management concepts through case studies of McDonald's and Amazon. It covers key aspects such as the four broad categories of operations management, skills required by operations managers, and Porter's competitive strategy. The assignment defines TQM and Lean, highlighting their characteristics and providing examples. It also explores the Theory of Constraints and queuing theory, including their practical applications. The McDonald's case study focuses on the company's operational strategy, tools used, key decision areas, and its transnational nature, along with recent challenges. The Amazon case study delves into the company's critical competencies. The assignment includes detailed answers, case study analyses, and a bibliography.

Operations Management
Neelam Bhika
Student No: SBSMBAQAR1812106
Swiss Business School Course
Date: 11 July 2019

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Table of Contents
Introduction…………………………………………………………………………………..3
Case Analysis 3……………………………………………………………………………… 3-5
Case Analysis 4……………………………………………………………………………… 5-6
Case Analysis 5……………………………………………………………………………….7-8
Conclusion……………………………………………………………………………………….8
Bibliography………………………………………………………………………………………8

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Introduction
Operations management is the business function responsible for planning, coordination and
controlling the resources needed to produce products and services for a company. The role of
operations management is to transform inputs to outputs. Inputs have been: people, material and
money outputs are goods and services. This report includes two case studies McDonald and
Amazon. The operations management of both companies has been assessed.
Question and Answers
1. What are the four broad categories in Operations Management? Give an example in
the context of your experience.
The operations management is an extent of management which is concerned with the designing
and controlling of the production process along with the redesigning of the operations in the
manufacturing of the goods and services. The categories of the operations management are:
Policies: The policies are the specified aims, purposes and strategies for the association
comprising operations. The policies rely on the preferred state of the affairs which are wanted by
the organization to attain.
Practices: The policies define the practices like systems, measures and technological capabilities
which are required to be in place within the organization along with the establishment, suppliers,
and clients. The practices have a great role in realizing policies.
Processes: The processes are the major aspect of operations management. The processes play a
significant role in the operations and make use of the tools and techniques in order to analyze the
operations (Mahadevan, 2015).
Performance: The performance is intensely linked with the practices. For instance, the adoption
of modern Japanese management practices like just-in-time has assisted organizations to enhance
their performance.
2. What are the skills and competencies and Operations Manager required? Kindly give
live examples for the same with your experience.
An operations manager is a senior role which involves overseeing the production of goods and/or
provision of services. It's an operations manager's job to make sure an organization is running as

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well as it possibly can, with a smooth efficient service that meets the expectations and needs of
customers and clients. Experience in management, operations, and leadership. Understanding of
general finance and budgeting, including profit and loss, balance sheet and cash-flow
management. Ability to build consensus and relationships among managers, partners, and
employees along with the excellent communication skills are entailed by the operations
managers.
As a Director of Sales and Marketing my role is responsible for maximizing profitability for the
hotel and ensuring delivery of outstanding quality service for all customers. The DOSM is
further responsible for the development of the annual sales & marketing budget, as well as
ensuring forecast accuracy in conjunction with revenue management (Reid and Sanders, 2015).
3. Porters Competitive Strategy for the Mobile Industry? Which strategy is good and
why?
The business environment of the mobile industry is quite volatile. The Porter competitive
strategy is used in order to create a defendable position in the business environment. The cost
leadership as a part of the competitive strategy is used by the mobile industry. This strategy
requires destructive creation of the efficient scale amenities, overhead costs and minimization of
the costs in the concerns like advertising, sales force, research and development and more. This
strategy is good for the industry as it helps to attain sustainable competitive advantage (Argyres,
Mahoney, and Nickerson, 2019). Such strategy efficiently markets the products along with the
distribution in the cost-efficient manner than the rivalries.
4. Define TQM and Lean; please provide the important characteristics between TQM and
Lean with some examples.
TQM defined as a continuously evolving management system consisting of values,
methodologies, and tools, the aim of which is to increase external and internal customer
satisfaction with a reduced amount of resources. TQM is a customer-oriented procedure and
aims to enhance business operations on a regular basis. This process makes sure that all the
associated efforts work towards the communal goals of enhancing products quality and service.

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On the other side, the lean is all about the mode of working so that removal of waste can be
focused within the process. The lean is concentrated on preserving value with less work. It
results in the enhanced efficiencies leading to the enhanced process flow. It ultimately increases
the speed of the process. Lean is all about getting the appropriate things to the appropriate place
at the appropriate time in the appropriate quantity. This process speedily adapts to the change.
TQM has gained importance as it involves everyone in the organization from the CEO to the
lowest level employee in order to focus on the product and service quality. It offers training to
be familiar with the required TQM techniques. TQM makes decisions on the basis of the best
solutions in spite of the hidden agendas. Under TQM, all the departments are required to
concentrate on the quality along with productivity. For instance, the cars of Toyota are
manufactured under TQM which has satisfied several customers. It has resulted in the high
resale value of the vehicles along with the individual items.
The lean is more focused on the customers and aims to encompass the vision of the
organization. This process makes every member of the organization comprehend the values,
mission and strategic priorities of the organization. It is essential to engage the employees in
the success of the organization. For instance, Kaizen is the philosophy of lean which focuses on
improving the organization. It empowers people to search for ways in order to drive the further
success of the organization. Toyota is having high vehicle demand as it practices lean
manufacturing which results in dependable and economical vehicles. It helps companies to
grow by offering good quality (Sanders, Elangeswaran and Wulfsberg, 2016).
5. What is the Theory of Constraints? What are the steps followed to improve the output?
The theory of constraints includes a scientific approach to improvement. It is methodology in
order to identify the most significant limiting factor which stands for attaining a goal and then
analytically enhances so that constraint does not remain as the restricting factor. The steps to
improve the output comprises identifying the system’s constraint, exploiting the constraint,
subordinating all to the constraint, stirring the constraint and preventing inactivity from
becoming a constraint. In order to manage the constraint, it is required to find out what it is
(Goldratt, 2017). Add on, the output of the constraint regulates or controls the output of the
organization as an entire. So it is authoritative to squeeze as much as possible out of it.

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6. What is queueing theory? Give some examples where the theory is practically used in a
Business environment?
A queuing model is constructed so that queue lengths and waiting time can be predicted.
Queuing theory is generally considered a branch of operations research because the results
are often used when making business decisions about the resources needed to provide a
service. Queues take place when there are limited resources.
Commercial queening Systems serving external customers: Banks, ATM, Gas Station
Transport Service System: Toll Stations, traffic lights, taxi cabs
Social Services: Hospitals, Universities
The queuing theory is used by companies like Toyota in the business environment. The
people in Toyota have learned about the statistical variation and inferences of the queuing
theory and it is reflected in the lean practices to reduce the variability. The queuing theory is
commonly reflected by focusing on the smaller batches and cycle times to go towards the
flow. Queuing helps in delivering value quickly along with the constant improvement.

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Case Study 1
Mcdonald’s
1. What is the key fundamental Operational Strategy of McDonald’s? What are the tools
used by McDonald’s to achieve its Operational Strategy?
The operational strategy is apprehensive with the pattern of strategic decisions and
actions. It assists in setting purposes, role, and activities of the operations. McDonald’s is
having the objective of maximizing the high-quality product through the operational
strategy which can help in satisfying customers. McDonald’s can attain the results by
making use of the tools like enhancing product quality, reducing costs, punctual delivery,
response speed and product flexibility in adapting to the personal customer’s needs.
Some other factors like advanced technology, confrontation to the variations in demand
and excellent customer service also assist in the operational strategy of the organization.
In order to attain objectives, McDonald’s has created a balance between the customer’s
requirements and reducing waste. The demand is projected and the stock is regulated so
that the products can be saved repeatedly (Raghavendra and Nijaguna, 2015). It equally
helps in reducing waste. The tools used to attain the operations strategy are:
TQM: TQM is used by McDonald’s in order to attain the operational strategy. TQM
includes the benchmarking, constant improvement and employee involvement. The
benchmarking is the procedure of comparing business process and performance of one
organization to the industry in order to learn and attain the best performance (Fonseca,
2015). The constant improvement is all about the continuing efforts in order to enhance
the product, service or process to attain organizational improvement. The employees are
engaged by McDonald’s in order to make an effective decision-making process.
Six Sigma: Six Sigma as a part of the operational strategy is used by McDonald’s to seek
quality improvement of the organizational procedure. It is possible to attain by removing
the reasons for errors and reducing the variability in the business procedure (Tennant,
2017).
2. What are the Key Decision areas which the McDonald’s focuses?
McDonald's focuses on design of goods and services. It is the goals of the McDonald to

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offer affordable products. For instance, the serving sizes and product prices rely on
popular customer anticipations. There are also some other key decision areas which are
focused by the McDonald like quality management, procedure and capacity design,
location strategy, layout design and strategy, job design and human resource, supply
chain management, inventory management, scheduling and maintenance (Harrington,
Ottenbacher, and Fauser, 2017). It is the objective of the organization to maximize
product quality within the confined limits of the costs and prices. The company even
designs the process on the basis of the efficiency for the cost minimization.
3. In your view what makes McDonald’s a truly Transnational Organization
McDonald is based on the globalization which means to extend to other parts of the
domain. McDonald is having 32,000 stores in more than 117 nations which make it the
globe’s largest fast-food chain. McDonald has attained the advantage of a transnational
corporation and it responds speedily to the domestic markets along with the
implementation of the sudden changes (Aversa, et al. 2015). In order to be transnational,
McDonald has taken into account the culture and traditions of other countries. For
instance, McDonald in Australia features Vegemite to integrate the taste of the local
public. In Japan, the company has launched a shrimp burger known as EBI Filet-O. Add
on McDonald serves Thai and heavy spice meals in Singapore which are quite prevalent
there. In recent years what kind of challenges McDonald's have faced with respect to
PEST (Political, Economical, Social and Technological), please give some examples
McDonald has attained the opportunity to spread its global business centered on the
enhanced international trade. The company faces political challenges like increasing
international trade agreements along with the government diet and health. The public
health policies are also evolving. As a part of the economic challenges, McDonald faces
problem in China due to the slowdown of the economy. It is a significant challenge for
the company as China is a major contributor to McDonald’s revenues. In the case of the
social factors, the healthy lifestyles trend represents challenges to the organization as
some of the products of the company are not healthy. McDonald needs to apply
technology in order to maximize productivity but such automation modifications require
changes in the operations management along with the productivity approaches.

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Case Study 2
Amazon’s
Q1. Based on the above case study please share your thoughts about Amazon building the
critical competency to deal with the demands?
Amazon can build critical competency by relentlessly focusing on the customer
experiences by offering them the products in the short duration of time. The company can
take the orders in bulk and deliver on the specific dates in order to manage the operations.
It can help in maintaining tight control over the operations. The customer behavior should
be carefully predicted in order to save from the unwanted returns. It can help the
organization to grow on a regular basis. The company can even create competency by
offering customers to return products to the local convenience store. It can help
organizations to save from the returns in the off-peak times (De Jong, and van Dijk,
2015).
Q2. What kind of tools, techniques, and technology is being adopted by Amazon to be one of
the successful E-Retailers on the planet?
Amazon makes use of several tools and techniques in order to one of the successful e-
retailers. Amazon personalizes the shopping experience by differentiating the sections
like “related to the items viewed”, “encouraged by the shopping experience” and
“recommendations for you”. Amazon is good at suggesting the relevant products to the
users. Amazon even makes use of the power of the page speed. The company focuses
greatly on the page speed which is Amazon.com. The time consumed on loading
webpage has a great impact on the experience of the users along with the sales. The page
loading time taken by the company is 2 seconds or less.
Amazon has introduced technologies like Amazon Prime Air. The customers can receive
the orders in the 30 minutes and the company does not break the speed limits to make it
happen. The secret behind this technology is the use of the unmanned aerial vehicles

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identified as drones. Amazon Fire TV is the technology which responses to the alike
products of the competitors like Apple’s TV and Google’s Android Roku.
Q.3 What is Central to Amazon and what keeps them moving towards the unprecedented
growth across the geographies?
Amazon has grown into the propulsive potency across industries like logistics, retail,
technology, consumer, cloud computing and media and entertainment. Almost every type
of businesses are impacted by Amazon. The company makes every possible effort to
grow across the geographies. The business model has enhanced the speed and envious of
the scale. Amazon Prime has helped in the value proposition of the organization in terms
of the free shipping. It is the most successful loyalty program of the company. Amazon
has spread its functions globally by assisting to the small businesses. Its role has been as
fuel for the small businesses (Mikhalkina, and Cabantous, 2015). The services are
specially designed by the company for startups. It even offers finance to the new ventures
which are going to enhance several e-commerce services. On the other side, Artificial
intelligence has been central to the company like Alexa and Siri. It offers the users to
replenish much required supplies seamlessly.
Q.4 What is the key learning from Amazon business model?
The business model of Amazon has attained popularity as the largest online retailer
globally. The business model is operated with several moving parts. The key learning of
Amazon’s business model represents the growth to be driven by the high margins from
the service sales. The business model of the company tends to understand the customer’s
obsession and offer the products accordingly. It focuses on the customers and
experiments with the new product lines which can be delightful to the public. The
business model offers the learning by identifying the string trends than embracing them,
for instance, the use of the AL and ML as the major propellers for organizational growth.
It even enables customers to provide products at the low prices at the fast delivery speed.

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Conclusion
The operations management have great role in the success of the organizations and it has been
proved from the analysis of Amazon and McDonald. The operations management is responsible
for managing the procedure of the production of the goods and services. The operations
management manages several aspects of the organization. It has helped Amazon and McDonald
to plan, organize, coordinate and control the resources required to produce goods and services. It
makes use of the people, technology, equipment and information as a part of the management
function. The operations management has succeeded both of the organizations by converting
inputs into the completed goods and services.

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Bibliography
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