Mcdonalds distribution network

8/11/2019 Mcdonalds distribution network

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PROJECT ONSUPPLY CHAIN MANAGEMENT

Perishable Products (Restaurant Chain)


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OBJECTIVE :

Understand the markets basic requirements of the product.Market potential of the productCompetitive environment of the chosen product

market dynamics in terms of consumer behavior about theproduct Detail information on the Supply Chain

Mfg locations in IndiaHow product reaches to consumer? Criticality/significanceof the Supply chainWho are all intermediate in between of Mfg to finalconsumer e.g dealer, C&F agent, depot etcDescribe role of each intermediate in the supply chain

Understand the markets basic requirements of the product.Market potential of the productCompetitive environment of the chosen product

Market dynamics in terms of consumer behavior about theproduct Detail information on the Supply Chain

Mfg locations in IndiaHow product reaches to consumer? Criticality/significanceof the Supply chainWho are all intermediate in between of Mfg to finalconsumer e.g dealer, C&F agent, depot etcDescribe role of each intermediate in the supply chain


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McDonalds Vision, Mission and Value

Vision To be the best & leading fast food

providers around the globe

Mission To be the world's best quick service restaurant

experience. Being the best means providingoutstanding quality, service, cleanliness, andvalue, so that we make every customer in everyrestaurant smile."

Values Our values summarized in Q.S.C & V. Provide

good quality, services to customer . Havecleanliness environment when customer enjoystheir meal .The value of food product makes

every customer is smiling .


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Quick Facts About McDonalds

McDonald's was started as a drive-in restaurant by twobrothers, Richard and Maurice McDonald in California,USin the year 1937.

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

Ray Kroc , distributor for milkshake machines, expressedinterest in the business, and he finalized a deal forfranchising 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 toMcDonald's Corporation . In 1965, McDonald's wentpublic


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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 McDonalds Corporation (U.S.A) and twoIndian businessman Amit Jatia (HardcastleRestaurants Private Limited, Mumbai)and VikramBakshi (Connaught Plaza Restaurants PrivateLimited, Delhi).

Two separate operations in Northern & WesternIndia.

Partners and their management teams trainedextensively in Indonesia & the U.S.

Approximately 75% of the menu available inMcDonalds in India is Indianized and specificallydesigned to woo Indian customers.

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


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Market potential of the McDonalds


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McDonalds has built up huge brand equity. It is the No. 1 fast-foodcompany by sales, with more than 31,000 restaurants servingburgers and fries in almost 120 countries. Sales, 2007 (11,4009million), 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) hassupported its new positioning.

Use of CRM, database marketing to more accurately market to itsconsumer target groups. It could identify likely customers (based onmodeling and profiles of shoppers) and prevent brand switching.

Strengthen its value proposition and offering, to encouragecustomers who visit coffee shops into McDonalds.

The new formats, McCafe, having Wifi internet links should helpin attracting segments. Also installing childrens play-parks and itsfocus on educating consumers about health, fitness.

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

International expansion into emerging markets of China and India.


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Competitive environment of theRestaurant Chain (MCD)


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McDonalds India: Channel Network


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How product reaches to consumer?

Criticality/significance of the Supply chain


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Geographically Diverse suppliers: Ensuring stringent quality standards


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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 McDonalds Supply Chain


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VALUE CHAIN ANALYSIS OFMCDONALDS


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I n b o u n d

L o g

i s t i c s

Organizing the supplyof food and materials torestaurants through

approved third partylogistics operators.

Production in hugeplants denotedexclusive to McDonalds

control fooddistribution andpackaging system

Inboundlogistics


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Technological Development

Human Resource ManagementFirm Infrastructure

Procurement

I n b o u n d

L o g

i s t i c s

O p e r a t

i o n s

O u t

b o u n d

L o g

i s t i c s

S e r v

i c e

Relatively Few

Management Layers toReduce Overhead

Effective Training Programsto Improve WorkerEfficiency and Effectiveness

Timing of AssetPurchases

Efficient PlantScale to MinimizeManufacturingCosts

Selection of LowCost TransportCarriers

Delivery Schedulethat ReducesCosts

Products Priced toGenerate SalesVolume

Small, HighlyTrained SalesForce

Investments in Technology in orderto Reduce Costs Associated withManufacturing Processes

Frequent Evaluation Processes toMonitor Suppliers Performances

Policy Choice ofPlant Technology

OrganizationalLearning

Efficient OrderSizes O

p e r a t

i o n s

R&D in field researchneeds of end users. quality development incollaboration with good

suppliers

Forward integration:through franchisees withcontrol over storepresentation, menu itemsetc. and enhanceparticipation in processimprovement

Operations


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Procurement

O u t

b o u n d

L o g

i s t i c s

M a r

k e t i n g

& S a l e s

S e r v

i c e

Selection of LowCost TransportCarriers

Delivery Schedulethat ReducesCosts

National ScaleAdvertising

Products Priced toGenerate SalesVolume

Small, HighlyTrained SalesForce

Effective ProductInstallations toReduce Frequencyand Severityof Recalls

Frequent Evaluation Processes toMonitor Suppliers Performances

Efficient OrderSizes

Interrelationshipswith Sister Units

O u t

b o u n

d

L o g

i s t i c s

Is the concern of thefranchisee.

Outbound logisticsare growing as a partof McDonaldsrecycling systemintegrating in thelogistics ofdistribution center

Outboundlogistics


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Procurement

I n b o u n

d

L o g

i s t i c s

O p e r a t

i o n s

O u t

b o u n d

L o g

i s t i c s

M a r

k e t i n g

& S a l e s

S e r v

i c e

M a r

k e t i n g

& S a l e s

Long term marketingobjectives are brokendown into shorter termmeasurable targets, which

McDonald uses asmilestones.

Country teams are givenautonomy in marketingmix decision.

Advertising & PR isoutsourced(Mudra agencyin India)

Marketing


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Procurement

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L o g

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O p e r a t

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O u t

b o u n d

L o g

i s t i c s

M a r

k e t i n g

& S a l e s

S e r v

i c e

S e r v

i c e

Servicesprovided by thecompaniesenrollmentstandards

Service


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Procurement

I n b o u n

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O p e r a t

i o n s

O u t

b o u n d

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M a r

k e t i n g

& S a l e s

S e r v

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Procurement

Sought partners with expertise on down trade distribution

Procurement


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Procurement

I n b o u n

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i s t i c s

O p e r a t

i o n s

O u t

b o u n d

L o g

i s t i c s

M a r

k e t i n g

& S a l e s

S e r v

i c e

Human Resource Management

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

HRM


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S u p p o r

t

A c t

i v i t i e s



I n b o u n

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O p e r a t

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M a r

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& S a l e s

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Firm Infrastructure

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

INFRASTRUCTURE


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Process:


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Who are all intermediate in between of Mfg tofinal consumer.

Describe role of each intermediate in the supplychain


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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


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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) foodsafety standards emphasizing prevention of faults.


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The five main performance objectivesare:

Speed Cost Quality Dependability Flexibility


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Documents

Mcdonalds distribution network