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7/31/2019 Madhan'n Work

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Operations Management (McDonalds Case Study)

INTRODUCTION - OPERATIONS MANAGEMENT:

Operations management can be defined as the planning, scheduling , and control of the activities that

transform inputs into finished goods and services. In other words, it is a field of study that focuses on

the effective planning , scheduling, use, and control of a manufacturing or service organisation through

the study of concepts from design engineering, industrial engineering, and management information

systems, quality management, production management, accounting, and other functions as the affect

the operation. (APICS Dictionary, 1995)

Operations management concerns making the most efficient use of whatever resources an organisation

has so as to provide the finished goods or services that its customer need in a timely and cost effective

manner. (Barnett ,1996).

Operations management is related with the strategy of the organisation. In this coursework, we will

demonstrate the relationship between the operations management and the strategy of the organisation

with the help of a corporate entity.

The corporate entity chosen is McDonald's Corporation.

COMPANY BACKGROUND

.

In all its restaurants around the globe, there are a number of operations that has a relationship with the

overall strategy of the organisation. Let us know discuss the key operations decisions and its relationship

with the strategy.

PRODUCT PLANNING. It involves designing products with both economy and quality in mind, which a

customer will find attractive, be able to understand and quickly able to use with minimum risk and

which delights him or her by its performance or flavour or durability etc. (Bicheno, 2002; p51)

In McDonalds Restaurants, product planning is a key operation. It has to keep on For instance, the

increasing preference of consumers towards healthy food made the restaurant add healthier food items

to its menu. Similarly it has to add new products for different seasons, for examples hot coffee in winter

and milkshakes in summer.

CAPACITY PLANNING


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The second operation decision important for organisations is capacity planning. Capacity planning and

control is the task of setting the effective capacity of the operation so that it can respond to the

demands placed upon it. This normally means determining how the operation should respond to

fluctuations in demand. Operations managers usually distinguish between short, medium and long-term

capacity decisions. For short- and medium-term capacity planning, the capacity level of the operation is

adjusted within the fixed physical limits that are set by long-term capacity decisions. This is also referred

to as aggregate planning and control because it is necessary to aggregate the various types of output

from an operation into one figure.

(source: www.mas.dti.gov.uk http:// /content/resources/categories/fact/FACT_Capacity_planning.html)

In McDonalds Restaurant, the operations managers have to set its capacity of making food items in such

a way that it responds quickly to the demands of those items in peak hours which is very important for a

fast food restaurant like McDonalds. It also have to make sure that it has enough stock of ingredients to

prepare food items which is very important because if one ingredients fall short then the whole process

of making food may halt. For instance if the buns required for making hamburgers falls short then the

restaurant may not be able to sell any hamburgers even if it has enough quantities of other ingredients.

LOCATION PLANNING

Location planning is one of the important operations that every organisation carries out and it is

essentially one of the critical success factors for any organisation. Success or failure of any organisation

may well depend on the location where it is situated. Therefore it is very important for businesses to

choose an ideal location. Businesses may choose location on the basis of various factors such as

proximity to the source of raw material, cost-effectiveness, proximity to customers or suppliers,

competition in the area, transportation availability and cost, availability of resources, and availability of

right labour.

McDonalds Restaurants also have to plan their location in such a way so that maximum customers visit

their restaurants. Therefore McDonalds prefer locations such that it can have large customer base,

transport access and availability of parking space. Moreover it also prefers location that are suitable for

raw material delivery, that is availability of ample space for deliveries of raw material.

PROCESS PLANNING:

After developing the product the businesses have to develop processes for making and supporting the

product. Organisations have to identify appropriate processes which will be needed to achieve required

level of output of the planned goods and services at right quality standards. Organisation considers both

the traditional methods in which the organisation has handled and processed its products and services

and the possible alternatives which currently present themselves. That is, it considers the advancement

of technology, computing power, and evolving managerial expertise. (Bicheno, 2002; p99)


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In McDonalds restaurant also, the operations manager develop and establishes the process of cooking

food items so that food is prepared using that method which helps them to maintain the speed and the

quality of the food. Moreover it also designs processes so that the health, safety and hygiene issues are

taken into consideration. Also the managers keep on introducing latest equipments with the

advancement of technology so as to bring pace, perfection and quality in the product.

LAYOUT DESIGN:

Layout is the arrangement of facility to provide working, service and reception, storage and

administrative areas. The layout is designed by traditional techniques using templates, scale plans, string

diagrams, and travel charting as they have been proved as low-cost methods of achieving either optimal

or near optimal layout plans. Poor layouts can greatly reduce the overall capacity and overall

productivity. Therefore care must be taken by organisation when designing layout. (Bicheno, 2002;

p121)

In McDonalds Restaurant also layout designing is a very important operation. A proper layout of the

equipments in the kitchen is very essential to ensure preparation of quality food in less time. It also

designs its layout keeping in mind the health and safety issues. It also designs layout in such a way that

needs of supervision is minimised. Another factor that is considered is the cost of production which also

depends on the layout.

JOB DESIGN

Job design consists of formal specifications and informal expectations of an employees work related

activities. The job design should try to meet the needs of both the job holder and the organisation. Thus

each job must be reasonable compromise of technical, economic, and behavioural feasibility.

Technical feasibility : The person holding the job must be capable of performing the required tasks with

the resources available to them.

Economic feasibility: The cost of providing a salary to the employees, providing equipment and

maintaining the organisational environment must remain within the organisations capabilities.

Behavioural feasibility: The feeling that people derive from a job affects their motivation to perform it

Job designing is also an important operation in McDonalds restaurant. Each employee is designed a

particular set of jobs. For example, some crew members cook food items in kitchen, some crew member

work on the counter, while others look after the customers in the lobby. Also there are employees who

manage all the crew member and look after overall wellbeing of the restaurant. While designing these

jobs the technical, economical and behavioural feasibility is taken into consideration.

SUPPLY CHAIN MANAGEMENT


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and customers, controlling inventory, forecasting demand and getting constant feedback on what's

happening at every link in the chain. (Kay, 2001; p1)

INVENTORY MANAGEMENT

Inventory management is another important operation of any organisation. It involves choosing the best

method of inventory control. While choosing the method of inventory control, the organisations must

keep in mind the expected demands of the products. The basis on which the organisations choose their

methods of inventory control may differ but the common idea is to ensure that the mix of inventory

types is able to satisfy customer needs and deliver the required profitability and cash flows.

In McDonalds the inventory is managed on the basis of First-In-First-Out basis. This is because most of

the inventory consists of perishable items. Therefore delivery of inventory happens thrice or more times

a week depending on the business of the restaurant. Moreover inventory is stored in freezer with

proper packaging so as to ensure freshness of the food items. All this activities comes under inventory

management of the organisation.

QUALITY MANAGEMENT

Quality management consists of maintaining the quality of the goods and services so as to meet the

minimum requirements laid by the industry. Moreover it is important so as to keep up the reputation of

the organisation. To manage and maintain the quality of the products and services the organisation may

adopt a number of practices like quality checks procedure etc.

Quality in McDonald restaurant is very important because of two reasons. Firstly because of the legal

requirements of the quality of food served. Secondly ,to keep up the good reputation which McDonalds

restaurants have earned over the years. Quality of food can be very difficult to maintain and therefore

McDonalds restaurant carry on a number of practices to make sure that quality food is served. Some of

these practices are the visits by the food inspector from the head office, supervisor checks etc.

MAINTENANCE

Maintenance means preservation of the things in the organisation. In simple words, maintenance is way

of protecting your production workers, office workers, drivers, and all the other users of your

organizations assets. /

ReferenceLibrary/MaintenanceManagement/The_Battle_of_Maintenance.htm)

In McDonalds, there are several equipments that are used for the preparation of food. Therefore it is

very important to maintain and service those equipments so as to maintain the quality of the product,

safety of the employees and to avoid further costs of repairing machines. Another important things that

needs maintenance are hygiene, costs, quality etc.

CONCLUSION:


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Therefore we conclude that operations management is very important for any organisations as they

have a relationship with the overall strategy of the organisation. Operations management contributes to

the strategy and therefore helps the organisation to gain competitive advantage. For instance, process

planning can help the organisation reduce cost and gain cost advantages and therefore gain competitive

advantage. Therefore the organisations must effectively manage the operations of the business as it has

a massive effect on the strategy of the organisation.

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