Operations Strategy: McDonald's Fresh Food Supply Chain Presentation

This presentation examines McDonald's potential transition to a fresh food supply chain, with a specific focus on beef. Given McDonald's position as the world's largest beef buyer, the analysis explores the challenges and opportunities associated with sourcing and supplying fresh beef for its menu...Read More

This presentation is for McDonald’s and its supply chain. The center of focus for this
presentation is its journey with a ‘Fresh Food Supply Chain’. Beef as one of its raw materials
is an important part of this journey of McDonald’s. Therefore, the presentation analyses the
different elements of the supply chain of McDonald’s to conclude whether a ‘Fresh Food
Journey’ is possible for the company.
For a ‘Fresh Food Supply Chain’, McDonald’s will need to ensure quick supplies of
fresh materials such as beef. Notably, McDonald’s is the world’s largest buyer of beef. So, it
makes sense that beef is an essential part of McDonald’s supply chain. To offer fresh beef
made foods like hamburgers McDonald's would require a supply of a huge quantity of good
quality animals. Additionally, the company would have to invest in the health and security
protection for the animals. It could be challenging considering its potential impact on the
cost, volume and quality of the food.
McDonald's has handled such a challenge in the past and it should do it now again.
The company had once worked closely with few suppliers to offer a ‘Smoothie’ containing
mango also. Working with suppliers was needed to keep a check of different blends of mango
varieties. It was also required to hit the price, volume and customer demand. McDonald’s
successfully did that in the past. It should do this again with the beef to support its ‘Fresh
Food Supply Chain’ by offering more foods on an order basis.

However, the supply of beef in quicker times to produce more foods on an order basis
can be full of challenges. First, effective collaborative working with few suppliers will be
needed to ensure that an adequate supply of beef is maintained constantly. This will consume
time as well as money for adopting new strategies. Second, the stocking of animals in secure
places will attract stock maintenance costs. Hence, the overall supply chain operation’s costs
will also increase. Offering fresh foods and be the cost-leader at the same time cannot move
parallel.
However, there are few other things, which could support McDonald’s on its fresh
food supply chain. The first is its lead strategy, which it uses to predict an increase in
demand. That predicting efficiency should also help to figure out the demand for beef made
McDonald’s foods. Hence, a more accurate stock needs can be communicated to suppliers,
which is necessary to feed customers without letting them wait for some time. Second,
McDonald’s has various regional planners each of them works closely with 100 restaurants. It
is how any influence on the inventory is known to McDonald’s. Such acts do not just give
suppliers sufficient time to arrange the orders; but also ensures that its restaurants do not face
any material shortage.
Therefore, it can be said that McDonald’s can facilitate a ‘Fresh Food Supply Chain’.
There will be some challenges as the analysis suggests; however, McDonald’s will manage
these considering its efficiency to tackle such challenges. One of the examples that show how
McDonald’s manage big challenges is of a ‘Smoothie containing mango’. In that case,
McDonald's had to work closely with a few suppliers to ensure it has access to a variety of
mangoes in bulk.