I interviewed the “Supplies managing director of McDonald’s company.”
McDonald’s is one of the most recognizable brands in the world, with a long and fascinating history (Cassidy et al.2021). The company was founded in 1940 by brothers Richard and Maurice McDonald in San Bernardino, California. Originally, the brothers operated a drive-in restaurant called “McDonald’s Bar-B-Q,” but they soon realized that hamburgers were their most popular menu item (Cassidy et al.2021). In 1948, they redesigned their restaurant to focus exclusively on hamburgers, fries, and milkshakes and introduced a new concept: fast food.
Today, McDonald’s has more than 39,000 locations in over 100 countries. The company’s menu has evolved over the years to offer customers r a wide range of products and services. The company is best known for its burgers, fries, and milkshakes, which are popular worldwide. However, McDonald’s also offers a variety of other items on its menu, including salads, wraps, breakfast items, and desserts (Cassidy et al., 2021).
One of McDonald’s most popular products is its Big Mac burger, a menu staple since 1968. The Big Mac consists of two beef patties, a special sauce, lettuce, cheese, pickles, and onions on a sesame seed bun. Other popular burgers on the menu include the Quarter Pounder with Cheese, the Double Cheeseburger, and the Filet-O-Fish.
In addition to its burgers, McDonald’s also offers a variety of side items, such as French fries, apple slices, and mozzarella sticks. The company has also recently introduced plant-based options, such as the McPlant burger, to cater to customers looking for vegetarian or vegan options.
Breakfast items are also popular for McDonald’s customers, with options such as Egg McMuffin, breakfast burritos, and oatmeal on the menu. The company has also started offering all-day breakfast in some locations, allowing customers to enjoy breakfast items anytime. McDonald’s also offers a range of services to its customers, including drive-thru, delivery, and mobile ordering.
The company’s success can be attributed to its efficient and effective supply chain management practices. From my comprehensive interview with the supplies chain managing director, here are some ways in which McDonald’s integrates a lean supply chain in their operations:
Commitment to zero defects:
According to the supply chain Managing director, McDonald’s is committed to delivering high-quality and consistent products to its customers, reflected in its rigorous quality control system. The company’s quality control measures include a comprehensive supplier approval process, regular product testing, and on-site inspections to ensure that all food products meet the company’s strict standards. In addition, McDonald’s uses advanced technologies to monitor and analyze its supply chain performanceallowingws the company to identify and address quality issues in real-time.
The director stated that the company’s quality control system has helped to eliminate defects and waste in the supply chain “through continuous monitoring and improvement, we have been able to drive down the number of defects in our supply chain, which has resulted in cost savings and improved customer satisfaction.” This shows that McDonald’s commitment to zero defects has not only improved the quality of its products but also helped the company to reduce waste and costs in its supply chain.
Frequent shipment of small lot sizes according to strict quality, delivery, and performance standards:
The director also confirmed that; McDonald’s has implemented a just-in-time (JIT) system to receive frequent shipments of small lot sizes from its suppliers. This system helps reduce inventory and waste while ensuring that the company always has fresh ingredients. The JIT system is supported by a sophisticated logistics network that ensures that supplies are delivered to restaurants quickly and efficiently. It works closely with them to establish clear expectations and guidelines to ensure that suppliers meet the company’s strict quality, delivery, and performance standards. The company also provides training and support to help suppliers meet these standards. For example, McDonald’s offers a Supplier Performance Index (SPI) that measures suppliers’ quality, delivery, and service performance. The SPI is used to identify improvement opportunities and to recognize suppliers that perform well.
Collaborative buyer-seller relationships:
He further informed me that; McDonald’s, the fast-food giant, has established a reputation for developing robust buyer-seller relationships with its suppliers. These relationships are characterized by close collaboration, where the company works hand in hand with its suppliers to identify opportunities for continuous improvement, reduce costs, and increase efficiency. McDonald’s understands that working closely with its suppliers is critical to maintaining its competitive edge in the industry. As such, the company has invested heavily in building long-term relationships with its suppliers, resulting in a high degree of trust and cooperation between the two parties. The collaborative approach employed by McDonald’s ensures that both the company and its suppliers benefit from the relationship. The suppliers benefit from a stable and predictable source of revenue, while McDonald’s benefits from a reliable supply of high-quality products at competitive prices. The company’s commitment to collaboration has also led to a culture of innovation and experimentation, where both parties are constantly seeking new and better ways to enhance their respective businesses.
Regular production schedules sent to suppliers regularly:
Per the director, McDonald’s provides suppliers with stable production schedules to help them plan their production and reduce waste. By providing these schedules, McDonald’s allows suppliers to plan their production more effectively, reducing the likelihood of stockouts, delays, and other disruptions that could negatively impact the supply chain. Additionally, this helps suppliers to optimize their production processes and minimize waste, which is critical for maintaining profitability in today’s competitive business environment.
Besides, the business provides stable production schedules, which also benefit the company by enabling it to maintain high control over its supply chain. By knowing when and how much of each product it will receive, McDonald’s can plan its operations more effectively, ensuring it has the necessary resources, staff, and equipment to handle the incoming shipments. This, in turn, helps the company reduce costs and improve efficiency, which is essential for staying competitive in the fast-food industry.
Sharing of electronic information between supply chain members:
As per the director’s reply, McDonald’s leverages technology to share electronic information with its suppliers, including vital data on sales, inventory levels, and production schedules. This approach allows for better communication and coordination between supply chain members, leading to an efficient and effective supply chain. The use of technology enables McDonald’s to provide suppliers with real-time information on changes in demand, enabling them to adjust their production schedules accordingly. Moreover, sharing electronic information helps to reduce the likelihood of stockouts and delays, ensuring that McDonald’s can meet customer demand. Additionally, this approach allows the company to gain valuable insights into its supply chain operations, which it can use to optimize processes, reduce costs, and improve efficiency.
Per the director’s reply, McDonald’s works closely with its logistics partners to manage its shipping needs. To transport its products from suppliers to its restaurants, the company employs a variety of transportation modes, including trucks, ships, and planes. This enables the company to respond quickly to changes in demand, ensuring that its restaurants have the products they need to serve customers. The use of different transportation modes also helps to minimize shipping costs and reduce the environmental impact of its supply chain operations. Moreover, McDonald’s works with its logistics partners to optimize its shipping routes and schedules, ensuring that deliveries are made promptly and efficiently. This approach enables the company to maintain a reliable and efficient supply chain, ensuring its restaurants have the necessary products to meet customer demand. Overallmanagingof shipping needs is a critical aspect of McDonald’s supply chain strategy, which helps the company maintain its position as a leader in the fast-food industry.
Overall, McDonald’s has a well-designed and efficient supply chain that integrates lean principles to minimize waste, improve quality, and enhance efficiency, which agrees with the argument in the course text.
Cassidy, O., Shin, H. W., Song, E., Jiang, E., Harri, R., Cano, C., … & Bragg, M. (2021). Comparing McDonald’s food marketing practices on official Instagram accounts across 15 countries. BMJ Nutrition, Prevention & Health, 4(2), 510.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2021). Chapters 1 and 2. In Purchasing & supply chain management (7th ed.). Cengage.