supply chain management of mc donalds

7/27/2019 supply chain management of mc donalds

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MC DONALD'SSUPPLY CHAIN



FAST FOOD INDUSTRY ANALYSIS

The Global Fast Food Restaurants industry has managed to grow over the

past five years despite being battered by a weakened global economy and

society's increasing awareness of the health risks associated with a diet

high in fat, salt and sugar.

The industry experienced steady and growing demand from emerging

economies

The industry's attempts to respond to changes in

consumer preferences have also supported revenue

growth.



Contd..

Over the five years to 2013, revenue is expected to grow at an

average rate of 2.5% per year.

Industry revenue declined 2.6% in 2009, but bounced back

4.4% in 2010 and continued growing through 2011 and 2012.

In 2013, revenue is expected to grow an

additional 3.6% to total $526.2 billion.



INDUSTRY SHARE



GROWING FIRMS



FOUNDED & FOUNDER

May 15, 1940 in San Bernardino, California McDonald's

Corporation, April 15, 1955 in Des Plaines, Illinois.

Richard and Maurice McDonald , McDonald's restaurant

concept

Ray Kroc , McDonald's Corporation founder.



McDonald’s IN INDIA

• Entered India in 1996 through a joint venture with

Hardcastle Restaurants Pvt. Ltd. and Connaught Plaza

Restaurants Pvt. Ltd.

• Special menu with vegetarian selection, no beef

•

Products using Indian spices - McVeggieburger, McAlooTikki burger

• Indian local suppliers provide McD with highest quality

freshest ingredients



BASIC INFORMATION

Number of locations 34,000+ worldwide

Revenue US$ 27.56 billion (2012)Operating income US$ 8.60 billion (2012)

Net income US$ 5.46 billion (2012)

Total assets US$ 35.39 billion (2012

Total equity US$ 15.29 billion (2012)

Employees 1,800,000 (2013)



McDonald’s– FOUR PILLARS OF SUCCESS

Limited Menu

Fresh Food

Fast Service

Affordable Price



MC DONALD’S SUPPLY CHAIN IN INDIA

• Source all its requirements from within India

• Developed local business

• Works with 38 different local suppliers

• Trained local farmers to produce according to their specification

• Worked with vendor to get the perfect cold chain in place

• Distribution centers – Noida, Kalamboli, Bangalore, Kolkata

• Cold chain – Unique concept of McD supply chain in India



• Full Supply Chain responsibility

• Multi Temp. Products - Over 65 % temperature controlled

• Stores as far as 500 – 1000 kms

• Drops per month - Over 1000 - Movement mainly by road

• Regular movement of perishables by air

• No margin for error – Operations critical client

Mc Donald’s SUPPLY CHAIN CHALLENGES



Mc Donald’s SUPPLY CHAIN CHALLENGES

(cont.)

• No Stock Outs at store

• On time delivery record – above 97 %

• Clean delivery record – above 99 %

• Unfailing inbound supply chain

• Bull whip effect

• Cannibalization



SUPPLY CHAIN STRATEGY



SUPPLY CHAIN SERVICES FOR

McDONALD‘S RESTAURANTS



COLD CHAIN – LIFELINE OF FAST FOOD

BUSINESS

• Temperature controlled supply chain

• Series of storage and distribution activities which maintain agiven temperature range

• Extend and ensure the shelf life of food products

Locked in pre-cooling room to

remove field heatafter harvesting

Transportation todistribution centersin refrigerated vans

McDonald’s store

products to be usedon daily basis

2 o c 1 to 4 o c-18 to 4 o c



VALIDATION OF COLD CHAIN

Component

Qualification

• Qualification check

on packaging

components

Operational

Qualification

• To demonstrate that

the process

performs at the

operationalextremes

Performance

Qualification

• To demonstrate that

what happens in the

real world is within

the limits of whatwas demonstrated

in the Operational

Qualification limits



COLD CHAIN PARTNERS

BEHIND THE Big McD

Source: http://www.rediff.com/business/1999/apr/29mac5.jpg



COLD CHAIN PARTNERS

• Baramati, Maharashtra

• Immense benefit to farmers by setting up a network of milk

collection centres equipped with bulk coolers

• From farm two degrees Celsius in 90 minutes

• Fully automatic international standard processing facility

• Capability to convert milk into cheese, butter/ghee, skimmed milk

powder, lactose, casein & whey protein and humanized baby food

• Stringent quality control measures and continuous Research

& Development



COLD CHAIN PARTNERS

Trikaya Agriculture-Supplier of Iceberg Lettuce

• Grow lettuce all year round with the help of experts from Mc

Donalds• A specialized nursery with a team of agricultural experts

• Vegetables are moved into the pre-cooling room within halfan hour of harvesting.

•

The pre-cooling room ensures rapid vacuum cooling to 2º Cwithin 90 minutes.

• The pack house, post-cooling and cold room are located atthe farms itself, ensuring no delay between harvesting, pre-cooling, packaging and cold storage

• Refrigerated truck for transportation.



COLD CHAIN PARTNERS

Vista Processed Foods Pvt. Ltd. -Supplier of Chicken andVegetable range of products including Fruit Pies

•

Produces a range of frozen chicken and vegetable foods

• The technology includes hi-tech refrigeration plants formanufacture of frozen food at temperatures as low as - 35° c.

• Cultural sensitivity: Vegetable & chicken manufactured at differentprocessing lines separated by a shower (washing) area. Utmostcare to ensure no mixing up.

• R&D facility for innovation in taste, nutritional value andconvenience



COLD CHAIN PARTNERS

Radhakrishna Foodland -Distribution centers

• Handles large volumes

•Services include procurement, quality inspection,storage, inventory management, deliveries, datacollection, recording and reporting

• Dry and cold storage facility to store and transport

perishable products at temperatures upto -22 DegreeCel.

• Effective process control for minimum distribution cost

• Very vital role in maintaining the integrity of the

products



COLD CHAIN PARTNERS

Amrit Food- Supplier of long life UHT Milk and Milk Products for

Frozen Desserts

•

ISO 9000 company• Manufacture widely popular brands – Gagan Milk and Nandan

Ghee

• State-of-the-art fully automatic machinery requiring no human

contact with product, for total hygiene.• Installed capacity of 6000 ltrs/hr for producing homogenized UHT

(Ultra High Temperature) processed milk and milk products.

• Strict quality control supported by a fully equipped quality control

laboratory.



LOGISTICS

• Handled by AFL Logistics Ltd.

• ~100 sales items in the restaurant

•

~400 SKUs in the warehouse (Hubs: up to 1,500)

• ~200 restaurants per DC (~180 DCs globally)

• Delivery frequency: ~3/wk, higher in urban areas

• 2-3 stops per route , Exclusive distributors (3PL)

• Freight consolidation (via freight forwarders)

• Long term partnerships with service providers, risk sharing

• Strong quality focus (Cold Chain, HACCP, QIP)



SUPPLY CHAIN INTEGRATION



TYPES OF SCM PACKAGES

• JDA

• RED PRAIRIE

•I2 MANUGISTICS

• INTACTIX

• ARTHUR

• WARE HOUSEMANAGEMENT SYSTEMS

•

ERP• MANUFACTURING

EXECUTION SYSTEM



Significant business benefits to both the customer and the supply ch

Enables

One stop shopping concept - Central file management

Inventory management - Restaurant simplification

SYNCHRONIZING THE PERISHABLE SUPPLY CHAIN

Demand forecasting

Promotional + Continuous Supply Supplier and DC level

Supply Planning

Restaurant and DC level

Visibility and Collaboration across the chain

RESULT OF SUPPLY CHAIN INTEGRATION



SHANMUGA NANDA R

MITHUN MV

NAGESH R

SRIDHAR R

SHASHI KUMAR M R

Documents

supply chain management of mc donalds