Unit 2 Assignment
GB570 Managing the Value Chain
Prof: John Craddock
McDonald’s Corporation supply chain
McDonalds is a global giant, and it is their supply chain combined with their demand chain that really creates a value to their customers. In this paper, I am trying to uncover how McDonald’s organizes their supply chain. I am especially interested in what allows them to provide a robust dollar menu, and remain profitable. What really excites me is how they took a product like a hamburger, and built an empire around it. This does not happen by chance, and in the food industry many companies come into business, and shortly after close. This company has been able to survive and thrive for many decades, and has spent a lot of time dialing in their costs, so that they can remain profitable. This has allowed them to open locations in many different global areas and no matter the economic situations of the area provide a brand that is recognized and valued above others in the same industry.
Above and beyond just providing products that customers like, McDonald’s does much for the community in which they operate. This has allowed them to create a brand that holds a lot of equity. To achieve what McDonald’s has been able to do all starts with a supply chain, and doing the right combination of market research to allow the creation of demand around their brand, and provide an experience that their consumers value, and keep coming back for.
Overview of McDonalds Supply Chain
Through its supply chain, “McDonald’s feeds almost 1% of the world’s population each day of the year, which equals about 75 hamburgers a second.” (Lubin & Badkar, 2011) That is a huge number, and McDonalds claims that not only does it feed 1 % of the world’s population; it does it in a sustainable way. McDonalds supply chain is focused on three items, “Ethics, Environment, and Economics.” (McDonalds, 2014) McDonalds supply chain is an interconnected web of direct and indirect suppliers, which encompass everything from grain mills that supply essential ingredients, to processing facilities that produce finished products like beverages, buns, etc.
Product and Service Specification McDonalds prides itself in providing food that customers want. When most customers think of McDonald’s they think of good food at reasonable prices. There are menu items such as their world famous French fries, and the Big Mac that have global recognition to other more geographical items like the black burger which is available only in Japan. (McDonalds, 2014) Over the past decade McDonald’s has been offering more balanced choices on their menu like salad and more nutritious kids meals, changing the composition of some of their classic favorites to include reduced salt and sugar options, and finding newer and better ways to share food and nutrition information with customers. McDonalds is committed to providing quality food that customers like, and information that enables their customers to make informed choices that fit their nutritional needs and lifestyle. McDonald’s future focus is to collaborate with other leaders within the industry and with health and nutrition experts so that they can continue to match their product offerings with the changing needs of their diverse customer base. For McDonald’s, “Good food means great taste, modern choices and real ingredients.” (McDonalds Corporation, 2014) This focus on enhanced nutritional profiles, children wellbeing, and providing food and nutrition information will enable McDonalds to continue to provide products and services that evolve in line with their changing global population.
Order Processing and Management
McDonalds has overhauled their order processing and management. In the past, McDonalds had an ordering process that had you approach the register, order your food and then wait as the server keyed in the information, and went about filling