McDonald’s: One Of The Best Supply Chain Management In The World.

An excellent supply chain encompasses the entire process of logistics and brand management, maintaining control of every single aspect of such and delivering a great product always on time, to the right place and at the best possible price with the lowest cost. A company must strive to harness a great supply chain that has many links, such as, suppliers, transportation, distribution, customers and public relations amongst others. Those links must be successful by their own accord. Every year, experts analyze and discuss supply chains of many companies, their strategies, missions and visions they accomplish through their management and how they handle their brand, process, delivery and others. McDonald’s has always had a great supply chain, considered number two in the world as the best SCM in a company.

McDonald’s is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries across more than 36,000 outlets. Known throughout the world for being an organization of great quality and having some of the best franchising opportunities, McDonald’s always strives for high-level standards to maintain consistency. Most of their facilities offer entertainment for children and their products include toys and merchandising that’s the latest in the market for the youngest customers. McDonald’s guarantees a constant distribution of their products applying ethical sustainability, environmental and economical principles. For the past ten years, they have been focusing mainly in optimizing and maintaining their supply chain utilizing a system of agricultural management that abides by strict parameters and standards demanded from their suppliers in all of their raw materials and foodstuffs.

McDonald's_supply chain management_david kiger_
Image courtesy of Leroy Chew at Flickr.com

Storage.

They are divided in three sections: dry, refrigerated and frozen foods. The holding area for each category is maintained at a specific temperature to avoid breaking the cold chain and so products don’t suffer spoilage due to variations of weather and climate.

Distribution.

Just like the storage, they have separate sections for the three major categories in order to efficiently deliver to restaurants while maintaining correct product temperature.

Menu.

The menu is somewhat limited and controlled and not changed regularly. This has allowed their sales to benefit, since customers are usually familiar with of their products and know what they want. Having the same menu allows their kitchen processes to remain simple and efficient during peak hours, also it allows them to anticipate the needs of certain high demand items such as nuggets and fries so they can be prepared before they are ordered and delivered to the customer before a minute has passed.

Beef.

McDonald’s beef is 100% cow meat coming from around 400,000 cattle farms worldwide of all different sizes, some with fewer than 50 head of cattle. They use whole cuts from forequarters. Each animal has an identification tag that traces its origins and process and assures the proper handling and required treatment established by legislation. Once the patties are delivered to stores, they are frozen and given a hygiene inspection.

Environmental considerations.

Being very conscious of the importance of caring for the environment and the huge impact suppliers can cause while producing their raw materials, they collaborate with initiatives that look for ways to protect the environment and maintain ecosystems healthy. The use paper that doesn’t come from deforestation and thus they reduce the use of non-renewable resources and non-recycle material.

Suppliers.

Some of McDonald’s suppliers have been with them since their beginnings. They strive to maintain their partners for the long run giving them incentives to stay that way. In order to serve more than 200 million customers a year, they must receive products from different suppliers in separate places of the world. Some of its main suppliers are:

  • McCain.  A potato company founded in 1957 and who has been making the potato fries for McDonald’s for many years.
  • Bimbo. One of McDonald’s main bun suppliers, they make an especial production just for the fast food brand. In 2011 they created a process in order to reduce the sodium in the bread they used to use before.
  • Coca-Cola Company.  Known as one of the best soft drink companies in the world. McDonald’s tries to offer the best drinks available and most of those come from the Coca-Cola lineup of products. McDonald’s is Coke’s largest restaurant customer, and the two companies maintain a unique, symbiotic relationship. Neither one would be what they are today without the other.
Supply chain management_david kiger_McDonald's
Image courtesy of Mike Mozart at Flickr.com

McDonald’s has strived to make its supply chain more transparent. This transparency scored McDonald’s a major public relations victory in Europe. After many competing fast-food chains were found to have served horse meat labeled as beef, McDonald’s was able to use its supply chain to prove its own beef was just that. The company’s supply chain transparency was praised by the Elliott Review, the British government’s official investigation into the issue.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s