Detailed Analysis of McDonald's Operations Management Processes

This report provides a comprehensive analysis of McDonald's operations management, examining its asset management, key operational processes, and potential areas of failure. It begins with an introduction to operations management and its significance in enhancing organizational efficiency and revenue. The report delves into McDonald's asset management, including finance, employees, intellectual property, and machinery, highlighting the importance of employee training and intellectual property policies. It then outlines key operations such as product development, quality management, locational strategy, human resource management, and supply chain management. The analysis identifies potential failure points in HRM and quality management. Finally, the report explores the utilization of lean approaches to enhance production and reduce waste within McDonald's operations, offering insights into the company's strategies for operational excellence.

Running head: OPERATIONS MANAGEMENT
OPERATIONS MANAGEMENT
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1OPERATIONS MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Management of the assets..........................................................................................................3
Key operations...........................................................................................................................4
Areas wherein the organisation management may fail..............................................................6
Utilisation of lean approach.......................................................................................................7
Development of the key approaches that will help in the development of production..............8
Conclusion..................................................................................................................................9
Reference list............................................................................................................................11

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Introduction
Operation management is the practice that is being performed by the administration
business to improve the efficiency of the organisation. The operation management is an
important factor that will help in the development of the working style of an organisation,
ensuring a rise in the revenue of the organisation (Gibson and Parkman 2018). It is
considered to be one of the significant factors that help in the improvement of the working of
the employees, ensuring the effective productivity of the organisation. Operation
management helps in the management of the assets ensuring development in the hike in the
production of the organisation. The operation management will help in the development of
working in the organisation (Reid and Sanders 2019). The operation management provides an
attempt that will help in the development of the balance cost with revenue to achieve the
highest net operating profit possible.
The operation management of McDonald’s enables it to be the world’s largest fast-
food restaurant chain. The organisation has been developed in the year 1940. It has been one
of the famous and successful fast-food organisation that has been serving a large number of
customers. It has its headquarter in Chicago. In the year 2018, there was a revenue of
US$5.924 billion with an operating income of US$8.823 billion (Ashton and Hou 2018).
Richard and Maurice McDonald have founded it. It has been operating with 210,000
employees in the year 2018 (Hitt and Carnes 2016). McDonald's have been considered to be
one of the best running organisation in restaurants. The paper will help in the explanation of
the operation that is being taken place in the organisation. From the paper, one will be able to
understand the operation process that is being taken place in McDonald’s and the ways
McDonald’s have been managing its waste production.

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Management of the assets
McDonald’s is the world’s leading organisation that has been serving fast-food since
1940. It has been serving people with its franchises located in various parts of the country.
The assets of the organisation play an important role that will help in the development of the
organisation to increase its revenue that will help its stability in the coming years (Ballew,
Wallace and Walton 2017). The entire working of the organisation has been successful since
1940 due to the right management of the assets. According to Heizer (2016), the main assets
of McDonald’s that have been identified are its finance, employees, intellectual property, and
machinery. Various other aspects act as an asset of the organisation that helps in the
development of the asset. It has ensured that the employees are being provided with the best
support that will help in providing job satisfaction to the employees, ensuring the retainment
of the employees. The organisation has developed training, whose primary function is
providing support and training to the provisional employees. The organisation ensures that
the employees are well aware of the working process in the organisation that will help in the
management of the employees easier for the organisation (Ferreira, Matos and Pires 2018).
The intellectual property is an important aspect that influences the non-financial aspect of an
organisation creating an impact on the efficiency of the organisation. In the intellectual
policy, some policies that have an impact on the organisation. However, the organisation is
being impacted by the policies that are developed by the organisation. Hence, McDonald’s
ensure that the policies are being well known to the
By the end of the year 2019, McDonald’s had a total asset of $45.805 billion, which is
an increase of 34.51% over a year. By the end of the year 2018, the total asset was $32.811
billion, which was a decrease of 2.94% a year. Hence, it is evident that there was a decrease
in the total economic asset of the organisation in the year 2018 (Ballew, Wallace, Walton and
Lee 2017). There was an increase in the total asset in the year 2017, which is a clear

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indication that the financial asset of the organisation has not been stable in the past few years.
The finance of the organisation is one of the major assets that has been a pillar of
development for the organisation since it has been founded. Machinery is another important
aspect that the organisation has very carefully managed. It ensures to invest a large sum of
the economy in the machinery that will reduce the overall costing of the product reducing the
labour cost as well (Bromiley and Rau 2016). The organisation ensures that there is a separate
team that will be handling the financial details of the organisation that will help the right
investment of the financial asset of the organisation. Investing in the right machinery is a
strategy that is being used by McDonald’s that help in the efficient delivery of the work.
Key operations
McDonald’s has been working efficiently in an organisation that will help in the rise
of the organisational values along with the development of the revenue of the organisation
(Gârleanu and Pedersen 2018). The key operations of McDonald’s are being illustrated in the
points below that will help to understand the process of operation of the organisation.
In the development of the business, especially a fast-food industry, as explained by
Campbell, Jardine and McGlynn (2016), it requires efficiency in the development of
products. For instance, it is necessary to develop a product that will make people tempt for
the product that will help in the increase in the revenues of the organisation. In the decision
making and goods development, McDonalds’s ensure that the product that is being developed
will help in meeting the needs of the customers reducing the price of the product.
Quality management is another important factor that helps in the rise of the revenue of
the organisation. It is an important factor to look into the quality of the food that is being
provided to the customers as it will have a great impact on the health of the customers (Ellul,
Pagano and Scognamiglio 2020). Hygiene is an important factor that will enable the

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organisation to be loyal to the customers producing quality food. The people must be
provided with the efficient product worth the value as it will ensure the customers with the
product quality along with taste.
According to Ivanov, Tsipoulanidis and Schönberger (2017), locational strategy plays
a crucial role that will enable the organisation to understand the areas wherein there will be
people who will be interested in the product. For instance, the establishment of a woollen
store in a humid area will not help in the rise of the revenue in spite will lead to deterioration
of the product. Hence, McDonald’s ensure to establish stores in places where there will be a
rise in the price of the products.
In the words of Kashyap, Kovrijnykh and Pavlova (2020), McDonald’s have a great
and skilful Human resource management. It helps in the management of the employees, who
ensures the right operational flow of the organisation. The HRM plays an important role in
the logical operational flow of the organisation by providing the employees with the right
skill and training that will help in meeting the needs of the customers.
The supply chain management of the organisation enables its presence in various
areas of the world. As Lee and Tang (2018) stated in their research, the supply chain
diversification of McDonald’s help in the diversity of the operational management of the
organisation. This strategy of McDonald’s enables to take risk of supply management. Hence,
the factor helps in the operational flow of the organisation.
The above-stated points help in the management of the operational flow of the
organisation meeting the needs of the customers. The operational flow of the organisation
will enable the right working process of the organisation improving the process of operation.

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Areas wherein the organisation management may fail
From the above key operations, it has been identified that McDonald’s can witness
failure in only two of the situations. As Hitt, Carnes and Xu (2016) stated, HRM is a crucial
factor that will help in the improving of the revenue of the organisation. McDonald’s has
been established in various parts of the country; hence, it becomes difficult for the HRM of
the organisation to look into the working of the employees. Managing the work and
efficiency of the employee is a difficult task. Moreover, the employees ensure that every
consumer is being satisfied with the work that is being performed. The failure of the HR
policy or training is the common thing that can lead to the failure of the operation of the
organisation.
The HRM must ensure that the employees who will be selected for the organisation
must be responsible and efficient who will help in the management and develop a smooth
working environment bringing in changes in the operational flow of the organisation
(Kashyap, Kovrijnykh and Pavlova 2020). The Human Resource of McDonald’s must ensure
that the employees are being provided with the best training that will help in the execution of
the right work impacting the revenue of the organisation. Thus, there is a great chance
wherein the training may fail, leading to the downfall of the operation of the HRM of the
organisation.
According to Lu, Ding, Peng and Chuang (2018), quality management is an important
factor for a fast-food organisation. It is the responsibility of the organisation to ensure that the
organisation will be providing the best products to the customers. It will help in the
development of revenue, increasing the profit of the organisation. Quality is an important
aspect not only in the food industry but also in any industry that takes care of the customers.
For the improvement of the organisation and develop a healthy relationship with customers, it
is necessary that the customers are being provided with the best products. Hence,

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McDonald’s must ensure that the products that are being provided to the customers are of the
best quality and healthy as children mostly consume it.
Perboli, Musso and Rosano (2018) stated that quality is key for any organisation to
establish a market and increase its revenue. It is evident from the research that customers
always remain loyal to the product as long as they are being provided with the best quality.
Money worth the quality of the product helps to ensure that the customer will remain loyal to
the band. Especially for McDonald’s, it is necessary to maintain the quality of the food as it
has a large number of consumers who are a kid or young. People would not opt for products
that are not worth the price. Moreover, there has been news wherein various food industries
have been providing customers with food that are not healthy or stale. This leads to the
decline in the number of consumers in an organisation.
Utilisation of the lean approach
In the words of Petrie and Wallace (2017), it can be said that the lean approaches are
the strategies that are being developed by the operation of the organisation that will help in
the development of the production increasing the revenue of the organisation. The lean
approaches are strategies in a way to increase the production of the organisation, reducing the
waste products of the organisation. It can also be said that the lean approaches ensure an
organisation to increase its production along with the development of the risk management of
the operations that are being carried on in the organisation. As McDonald’s has a diversity of
supply chain, management of the suppliers is difficult. However, the diversity of supply chain
help in the reduction of the wastage decreasing the price of the product that will help in
proving the consumers with the best products.
Development of different departments of HRM in different areas wherein
McDonald’s is being established will help in providing better training to the employees that

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will help in the increase of the efficiency of the organisation. With the development of the
HRM in every area, special training will be provided to the employees based on the culture
and diversity of the place. As mentioned by Sagnak and Kazancoglu (2016), changes in the
area bringing in changes in the mentality and acceptance of the product by the consumers.
With the development of the HRM in separate areas of the world, the employees can be
trained ways of handling people of the particular areas in spite of being hypothetical.
Moreover, it becomes easier and cost-effective for the organisation to train limited people and
provide effective training within a limited time.
McDonald’s have developed and invested a lot in the machinery that will help in
producing better and will be cost-effective. Investing in machinery that will help in reducing
the price of the product along with decreasing the waste that will be produced from the
products (Siegel et al. 2019). Quality is an important factor that helps in the increase of the
revenue of the organisation. From the research of Thomé, Scavarda and Scavarda (2016), the
waste products that are being obtained after the production of the product can be provided to
the organisation who produce products from waste materials. Decomposable waste materials
can be given to manure firms that will help in the production of manures, which will help in
reducing the price of the product as well. For instance, the oil that is being used in frying can
be reused if being refined or with the use of advanced machinery that will reduce the use of
oil.
Development of the key approaches that will help in the development of production
The lean approaches will help in the development of operational performance in
various ways. According to Bromiley and Rau (2016), development of the HRM in various
areas will help in the management of the employees and providing them training according to
the needs and mentality of the customers. The HR manager ensures that efficient and eligible
employees are being appointed for the job role that will help in the maintenance of the

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working process and efficiency of the production of the employees. Moreover, the
development of separate HRM teams will help in the analysis of the working of the store in a
particular area. Need for more employees or any issues that will be faced by the employees
will be easily resolved with the development of various HRM teams in different areas.
Providing training to a team with less number of employees will also be helpful in the right
and efficient delivery of training, which will be helpful during the process of working (Lee
and Tang 2018). It becomes easier to provide training and help develop communication with
the employees.
According to Wallace (2017), the development of the quality with the decrease in the
price help in the increase of the sales of the organisation. McDonald’s has been famous for its
quality and price. It has been investing a great sum of its asset in the machinery that will help
in producing an efficient product, decreasing the price of the product. The development of the
machinery or investment in the machinery has helped McDonald’s to develop its operational
flow that will help in meeting the needs of the organisation. Hence, the lean approaches that
have been chosen will help in the development of the organisation increasing its productivity
or efficiency of the organisation. It can be stated that the lean approaches are being developed
by McDonald’s to meet the demand ensuring the risk of the organisation. The lean
approaches will help in the development of the revenue from the sale of the waste material as
well (www.mcdonalds.com 2020). The lean approaches can be considered as the schemes
that are being developed by the organisation for the development of the operational flow of
the organisation. It will help in the meeting of the needs of the organisation during the time of
risk. Hence, the lean approaches that are being developed by McDonald’s will aid in the
improvement of the operational flow of the organisation ensuring the right operational
management of the organisation.

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Conclusion
McDonald’s is one of the largest selling fast-food for decades. The main motive of the
organisation was to provide food that the consumers have hardly enjoyed before. The main
consumers of McDonald’s are the youth or children. Hence, McDonald’s have designed their
products that are innovative and will help in increasing the number of consumers due to its
taste and quality. McDonald has ensured its customers that the product that is being delivered
to them must be of good quality. However, there has been a continuous change observed in
the financial asset of the organisation. The increase in the quality of the product has been
always helpful for the organisation as there was an increase in the revenue of the
organisation. With the changes in the financial asset of the organisation, it is evident that the
organisation must develop risk management strategies that will help in the maintenance of the
working of the organisation.
The assets play an important role in the development of the organisation. Hence, the
responsibility of the organisation to protect and develop the assets that will help to raise the
organisation. The assets directly or indirectly have an impact on the working of the
operational flow of the organisation. Hence, the changes that have been brought in the
operational flow of the organisation will help in the development of the productivity of the
organisation. The organisation has developed lean approaches that will help in meeting the
revenue crisis of the organisation. McDonald’s has witnessed various changes in the
community that has made it develop plans that will help in the risk management of the
organisation. Hence, it can be concluded that McDonald’s ensures that the revenue is not
being affected with the changes in the policies or operation of the organisation. The
operational flow of the organisation has a great impact on the working process of the
organisation.

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