Supply Chain Flows of Mcdonald's

Topics: Supply chain management, Supply chain, Fast food Pages: 17 (5471 words) Published: January 22, 2013
This report will touch more on the supply chain management of McDonald’s, specifically in India.|

Table of Contents

1.Executive Summary2
2.Company’s Description3
3.Elaboration on Flow Chart3
3.1.Stages of Supply Chain Process3
Cycle View3
Push/Pull View4
New Zealand –AngusPure5
United States of America – Gaviña5
Brazil – Marfrig5
Golden State Foods Corp.5
3.1.3.Restaurant Outlets6
3.2.Sequence & Dependency Links6
3.3.Flow of Information, Product & Funds7
Better Marketing Promotions and Demand Forecast8
Incorporate a Higher Quality System8
6.Flow Chart9

1. Executive Summary
McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants. It serves approximately 68 million customers on a daily basis in 119 different countries. In 1955, Ray Kroc joined the company as a franchise agent and subsequently bought over the chain from the McDonald brothers, overseeing its worldwide growth. The supply chain consists of McDonald’s suppliers, distributors, restaurant outlets and its customers. McDonald’s has local and international suppliers. The firm’s distributors have to collaborate with these suppliers to deliver goods to respective McDonald’s restaurant outlets. Cold chain concept is also vital in its supply chain, to preserve quality and freshness of perishable food products. Once the goods arrived at the restaurants, products will be put together for end-products to be sold to customers upon their orders. There are three different cycles in McDonald’s supply chain; “Customer Order Cycle”, “Replenishment Cycle” and “Procurement Cycle”. The Customer Order cycle that connects the customers and the restaurant outlet is triggered when customers place their orders over the counters in the restaurant. The “Replenishment Cycle” connects the restaurant outlet and McDonald’s distributors when the outlet needs to replenish the number of stocks it has in its restaurant. Lastly, the “Procurement Cycle” connects the distributor and the suppliers, and it takes place when suppliers have to gather materials to meet with the distributor’s order. The push/pull boundary of McDonald’s supply chain lies between the Customer Order cycle and the Replenishment Order cycle. Demand is being “pushed” from the suppliers, to the distributors, and ultimately to the restaurant outlets based on forecasting of demand and sales. The pull effect will only start to kick in when the customer place their order and demand for the specific product. All parties in the supply chain are interdependent; the ultimate consumer will not be able to receive his or her demanded product if the suppliers could not harvest the right goods in the right quantity in time, or the distributor could not preserve the quality of the products well during delivery or could not deliver specific goods in time, or the restaurant run out of stocks available in their premises. All parties of the supply chain must work effectively and concurrently in order for business to run. This goes on to link how information flow must be efficient among parties and how essential it is to keep communication flowing up and down the supply chain. Only with effective communication will smooth flow of funds and products flow up and down the supply chain respectively. Despite the highly responsive and successful supply chain McDonald’s already have in place, problems such as uncertain spikes in demand during promotions and complexities in managing with several parties in the supply chain process still make things complex and cumbersome for the global firm. Two recommendations were suggested to help McDonald’s combat the problems. Firstly, marketing promotions should be scheduled properly before broadcast. This will help McDonald’s prepare for a sudden increase in demand and to cater to...

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