Mcdonalds Final

PROJECT ONSUPPLY CHAIN MANAGEMENT

Perishable Products (Restaurant Chain)

Group Members

•Nikhil Jadhav (8126)•Asif Shaikh (8150 )•Pooja Shetty (8153)•Sunil Singh (8155)•Imran Khan (8185)•Ashwin Kodati (8187)

OBJECTIVE :

• Understand the markets basic requirements of the product. Market potential of the product Competitive environment of the chosen product market dynamics in terms of consumer behavior about the

product• Detail information on the Supply Chain Mfg locations in India How product reaches to consumer? Criticality/significance

of the Supply chain Who are all intermediate in between of Mfg to final

consumer e.g dealer, C&F agent, depot etc Describe role of each intermediate in the supply chain

• Understand the markets basic requirements of the product. Market potential of the product Competitive environment of the chosen product Market dynamics in terms of consumer behavior about the

product• Detail information on the Supply Chain Mfg locations in India How product reaches to consumer? Criticality/significance

of the Supply chain Who are all intermediate in between of Mfg to final

consumer e.g dealer, C&F agent, depot etc Describe role of each intermediate in the supply chain

MCDONALD’S CORPORATION

McDonald’s Vision, Mission and Value

Quick Facts About McDonald’s

• McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California,US in the year 1937.

• By mid-1950s, the restaurant's revenues had reached $350,000.

• Ray Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954.

• He established a franchising company, the McDonald System Inc. and appointed franchisees.

• In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public…

McDonald's In India• 1996 - First restaurant opens in India, at

Basant Lok,Vasant Vihar, New Delhi.• McDonald's India is a 50 – 50 JV partnership

between McDonald’s Corporation (U.S.A) and two Indian businessman Amit Jatia (Hardcastle Restaurants Private Limited, Mumbai)and Vikram Bakshi (Connaught Plaza Restaurants Private Limited, Delhi).

• Two separate operations in Northern & Western India.

• Partners and their management teams trained extensively in Indonesia & the U.S.

• Approximately 75% of the menu available in McDonald’s in India is Indianized and specifically designed to woo Indian customers.

• The McDonald's philosophy of QSC&V is the guiding force behind its service to the customers.

Market potential of the McDonald’s

• McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales, with more than 31,000 restaurants serving burgers and fries in almost 120 countries. Sales, 2007 (11,4009 million), 5.6% sales growth

• Joint ventures with retailers (e.g. supermarkets). • Consolidation of retailers likely, so better locations for franchisees. • Respond to social changes - by innovation within healthier lifestyle

foods. Its move into hot baguettes and healthier snacks (fruit) has supported its new positioning.

• Use of CRM, database marketing to more accurately market to its consumer target groups. It could identify likely customers (based on modeling and profiles of shoppers) and prevent brand switching.

• Strengthen its value proposition and offering, to encourage customers who visit coffee shops into McDonalds.

• The new “formats”, McCafe, having Wifi internet links should help in attracting segments. Also installing children’s play-parks and its focus on educating consumers about health, fitness.

• Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages.

• International expansion into emerging markets of China and India.

Competitive environment of the Restaurant Chain (MCD)

Competitive environment

McDonald’s India: Channel Network

McDonald’s India: Network &competitors

How product reaches to consumer? Criticality/significance of the Supply chain

Geographically Diverse suppliers: Ensuring stringent quality standards

Supplier performance index

ImportBreath of supplyprocess control

equipment

No direct control over issues, positive influence by raising questions, bringing people to the table and encouraging improvement

The McDonald’s Supply Chain

VALUE CHAIN ANALYSIS OF MCDONALD’S

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•Organizing the supply of food and materials to restaurants through approved third party logistics operators.

•Production in huge plants denoted exclusive to McDonald’s control food distribution and packaging system

Inbound logistics

Technological Development

Human Resource Management

Firm Infrastructure

Procurement

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Relatively Few Management Layers to Reduce Overhead

Effective Training Programs to Improve Worker Efficiency and Effectiveness

Timing of Asset Purchases

Efficient Plant Scale to Minimize Manufacturing Costs

Selection of Low Cost Transport Carriers

Delivery Schedule that Reduces Costs

Products Priced to Generate Sales Volume

Small, Highly Trained Sales Force

Investments in Technology in order to Reduce Costs Associated with Manufacturing Processes

Frequent Evaluation Processes to Monitor Suppliers’ Performances

Policy Choice of Plant Technology

Organizational Learning

Efficient Order SizesO

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•R&D in field research needs of end users.• quality development in collaboration with good suppliers

•Forward integration: through franchisees with control over store presentation, menu items etc. and enhance participation in process improvement

Operations



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Selection of Low Cost Transport Carriers

Delivery Schedule that Reduces Costs

National Scale Advertising

Products Priced to Generate Sales Volume

Small, Highly Trained Sales Force

Effective Product Installations to Reduce Frequency and Severity of Recalls

Frequent Evaluation Processes to Monitor Suppliers’ Performances

Efficient Order Sizes

Interrelationships with Sister Units

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•Is the concern of the franchisee.

•Outbound logistics are growing as a part of McDonald’s recycling system integrating in the logistics of distribution center

Outbound logistics



Firm Infrastructure

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•Long term marketing objectives are broken down into shorter term measurable targets, which McDonald uses as milestones.

•Country teams are given autonomy in marketing mix decision.

•Advertising & PR is outsourced (Mudra agency in India)

Marketing



Firm Infrastructure

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Services provided by the companies enrollment standards

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Procurement

Sought partners with expertise on down trade distribution

Procurement



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Technology and development research in quality assurance, and packing readdressed at lower cost, faster delivery chain system and process control equipments, recycling system.

R & D



Firm Infrastructure

Procurement

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HRM specialists in R&D and expertise in food formulation, education to raise awareness of issues and raise demand. The addressing environmental issues and CRS.

HRM

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Firm Infrastructure

Strong real estate portfolio.International organization more than 50000 employees works in more than 50 countries,

INFRASTRUCTURE

Process:

Who are all intermediate in between of Mfg to final consumer.

Describe role of each intermediate in the supply chain

Vital links of Mc Donald’s cold chain.

• McDonald's spent a few years setting up a unique Cold Chain.

• The Cold Chain is necessary to maintain the integrity of food products and retain their freshness and nutritional value.

Procurement

warehousing

Transportation

Retailing of food product

SUPPLIERS• Trikaya AgricultureSupplier of Iceberg Lettuce

• Vista Processed Foods Pvt. Ltd.Supplier of Chicken and Vegetable range of products (including

Fruit Pies)

• Dynamix DiarySupplier of Cheese

• Amrit FoodSupplier of long life UHT Milk and Milk Products for Frozen

Desserts

Distribution

Radhakrishna FoodlandDistribution Centres and cold storages.

•Completely dedicated distribution and supply chain.• Matching supplier production with deliveries using ERP.•Quality inspection Program, quality check at 20 different

points in supply chain.•HACCP(Hazard analysis critical control points) food

safety standards emphasizing prevention of faults.

The five main performance objectives are:

• Speed• Cost• Quality• Dependability• Flexibility

Mcdonalds Final

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