Mc donald’s e procurement, Supply Chain and Logistics

McDonalds E-Procurement, Logistics

and Supply Chain Management

Supply Chain Managementby M. Ali Khan

McDonalds Supply Chain, E

Procurement and Logistics

Supply chain management is network of interconnected business in the ultimate provision of product and services require by end customer

Scm span all movement and storage of raw material, work in process, finishes goods from point of origin to point of consumption.

Mc Donald's scm integration

Successful scm require a change from managing individual function integrating activities into supply chain process.

Supply chain process integration involves collaboration work between buyers suppliers, common system and shared information.

Customer relationship managementCustomer service managementDemand managementOrder fulfillmentManufacturing flow managementSupplier relation ship managementProduct development and commercializationReturns managementProcurementPhysical distributionOut sourcingPerformance measurement

Supply chain strategies

Two typesPush strategyPull strategy

Push strategy

Communication between buyer and sellerInteractive and non interactive

Pull strategy

Ina pull strategy the customer request the product and pulls through a delivery channel.

WHAT IS E -PROCUREMENTBY

JAHANZAIB DILAWER(MBE-SP08-13)

McDonald’s E-Procurement

E-Procurement

E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies, Work and services through the Internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning.

How E-Procurement Works

e-procurement is a Web sites that allows qualified and registered users to look for buyers or sellers of goods and services.

Buyers or sellers may specify costs or invite bids online.

Customers can Qualify for volume discounts or special offers on the web.

It also allows automated buying and selling using e-procurement software.

Ariba BuyerSoftwares of E-procurement SystemOther softwares in E-Procurement System.Coupa.Mikrofax.

Types of E-Procurement

Web-based ERP

e-MROe-sourcing

e-tendering

e-reverse auctioning

e-informing

e-market sites

There are seven types in E-Procurement:Web-based ERP (Enterprise Resource

Planning): (Creating and approving purchasing

requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology.)

e-MRO (Maintenance, Repair and Overhaul). (Only for maintenance and repairing

concerns)e-sourcing

(Identifying new suppliers for a specific category of purchasing requirements using Internet technology).

e-tendering: (Sending requests for information and

prices to suppliers and receiving the responses of suppliers using Internet technology).

e-reverse auctioning:

(Using Internet technology to buy goods and services from a number of known or unknown suppliers).

e-informing: (Gathering and distributing purchasing

information)e-market sites: (Web-based ERP to open up value

chains).

McDonalds E-Procurement System

McDonalds E-Procurement System is basically a main reason for their successful supply chain management.

It is so efficient that it provides the backbone not only to all the logistics but the whole McDonalds supply chain management.

How McDonald’s Uses E-procurement Systems

Emac Digital: (Internet procurement site designed for

McDonald's Corporation's 27,000 franchises )

Emac Digital Company is E-Procurement website which is jointly owned by McDonalds and Accel-KKR Internet Co.

It is a procurement hub launched in 2001 allow all of McDonald's franchises across the globe to buy everything needed to run their restaurants.

From uniform to HamBurger

Aside from being faster and more convenient for franchisees, the procurement site also allow business owners to buy supplies and materials at a discounted price, ultimately reducing costs for McDonald's.

E-Procurement allows 85% cut in costs according to McDonald’s supply chief Edwards.

Benefits For the Suppliers

McDonald’s works with two types of suppliers.

Major

SuppliersSmall Suppliers

Major

Supplier

Small Supplier

s

Emac Digital

McDonalds E-Procurement Model

Place Orders Supply Received

Emac Digital

Global Franchise

s

Suppliers

Logistics

IP (Internet protocol) technology:

An IP connection would also open up a host of options for McDonald's to collect data from its consumers. Internet connections for kids at store locations would not be out of the question. The quicker connection would also allow McDonald's to track purchases and offer customer loyalty programs.

it will connect headquarters with stores.Replacing traditional and old Dial-up

Networking.McDonald's can collect data much faster

Working on SRM (suppliers relationship Management) with Oak Brook.

Developing Next generation e-procurement software POS.

So, McDonald’s e-procurement system is benchmark while provide final service to the customers form suppliers to customer’s dish.

Ahmed Ishtiaque

McDonalds Logistics Standards

Distributor Quality Management Process

Operations and Customer RelationsQuality Control (HACCP/QIP)Cold Chain StandardsHygiene RegulationsProduct Handling StandardsEmergency and contigency plan

McDonalds Logistics Standards

Risk and Crisis managementContinuous unannounced internal and 3rd

party audits for DCs result in superior quality scores regularly

INFORMATION

EfficiencyResponsiveness

Transportation

The DCs have focused all their resources to meet McDonald's expectation of 'Cold, Clean, and On-Time Delivery' and plays a very vital role in maintaining the integrity of the products throughout the entire 'cold chain'.

Transportation

The DC receives items from different parts of the country.

These items are stored in rooms with different temperature zones and are finally dispatched to the McDonald's restaurants on the basis of their requirements.

Transportation

The company has both cold and dry storage facilities with capability to store products up to -22º C as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state.

The specially designed trucks maintained the temperature in the storage chamber throughout the journey.

McDonalds Distribution systems

McDonald uses three types of Distribution strategy Franchising Licensing Joint ventures

I will discuss them briefly


FranchisingMcDonald require franchising from countries on conditions like this The entrepreneur should be trained. 45000$ in franchise fees which is higher than other fast-food companies Total investment would range from 1 million to 1.8 million After setting the entrepreneur will have to pay 12.5 % as royalty tax Contract wll be for 20 years Cash liquidity should be around 250000


Licensing The Lakson Group of Companies is one of the largest and most well-

diversified companies in Pakistan with a range of foreign affiliated partners that include Tetley Tea, Colgate-Palmolive, McDonalds, Kraft Foods and Phillip Morris International.

Colgate-Palmolive Inc.: 30% equity ownership in Colgate- Palmolive (Pakistan) Limited McDonald’s Corporation: Siza foods (Pvt.) Limited holds an exclusive Country Development

License for Pakistan. Kraft Foods: Holds an exclusive licensing exclusive Country Development License

for Pakistan. Tetley Overseas Holdings Ltd: 50% equity ownership in Tetley Clover


Samsung Corby Crave Hit McDonald’s: Samsung Electronics Company Limited, as a joint promotion with McDonalds Pakistan, has introduced the latest Samsung Corby Series mobile phones at McDonald’s outlets across Pakistan. McDonald’s customers are provided with a chance to win this fabulous cellular product through participation.The youth oriented series is focused on interactivity and is laced with exciting features such as video, images, sound, music and data sharing. The joint promotion aims to generate excitement among the youth and providing them a feel of the touch phones and boosting their comprehension.

Other than this McDonalds have license on Airports, Railways etc.

waqar saleem pashah


Joint venture GAM Corp (Private) Ltd is a joint venture company of

McDonald’s Corporation USA. Mc Donald’s is world’s leading Fast Food chain having over 30,000 restaurants world wide. Total strength of staff in Pakistan is 1800 person. It has successfully opened 14 restaurants in Punjab.

Other than this “TOYS R US” is another joint venture

Thank you