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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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Technological Development
Human Resource ManagementFirm Infrastructure
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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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
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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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
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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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
M a r
k e t i n g
& S a l e s
S e r v
i c e
Procurement
Sought partners with expertise on down trade distribution
Procurement
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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
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
Technological Development
Human Resource ManagementFirm Infrastructure
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
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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