McDonalds E-Procurement, Logistics and Supply Chain Management

Supply Chain Management by M. Ali Khan

McDonalds Supply Chain, E Procurement and Logistics

 Supply chain management is network of

interconnected business in the ultimate provision of product and services require by end customer Scm span all movement and storage of raw material, work in process, finishes goods from point of origin to point of consumption.

Mc Donald's scm integration

Successful scm require a change from managing

individual function integrating activities into supply chain process. Supply chain process integration involves collaboration work between buyers suppliers, common system and shared information.

Customer relationship management Customer service management Demand management Order fulfillment Manufacturing flow management Supplier relation ship management Product development and commercialization Returns management Procurement Physical distribution Out sourcing Performance measurement

Supply chain strategies

Two types Push strategy Pull strategy

Push strategy
Communication between buyer and seller

Interactive and non interactive

Pull strategy
Ina pull strategy the customer request the product

and pulls through a delivery channel.

McDonalds E-Procurement
WHAT IS E-PROCUREMENT BY JAHANZAIB DILAWER (MBE-SP08-13)

E-Procurement
E-procurement (electronic procurement,

sometimes also known as supplier exchange) is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies, Work and services through the Internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning.

How E-Procurement Works

e-procurement is a Web sites that allows qualified

and registered users to look for buyers or sellers of goods and services. Buyers or sellers may specify costs or invite bids online. Customers can Qualify for volume discounts or special offers on the web.

 It also allows automated buying and selling using e-

procurement software.
Ariba Buyer Softwares of E-procurement System Other softwares in E-Procurement System. Coupa. Mikrofax.

Types of E-Procurement
Web-based ERP

e-MRO e-sourcing

e-tendering
e-reverse auctioning

e-informing e-market sites

 There are seven types in E-Procurement:

Web-based ERP (Enterprise Resource

Planning): (Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology.) e-MRO (Maintenance, Repair and Overhaul). (Only for maintenance and repairing concerns) e-sourcing

(Identifying new suppliers for a specific category of purchasing requirements using Internet technology). e-tendering: (Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology). e-reverse auctioning:

(Using Internet technology to buy goods and services from a number of known or unknown suppliers). e-informing: (Gathering and distributing purchasing information) e-market sites: (Web-based ERP to open up value chains).

McDonalds E-Procurement System

McDonalds E-Procurement System is basically a

main reason for their successful supply chain management.

It is so efficient that it provides the backbone not

only to all the logistics but the whole McDonalds supply chain management.

How McDonalds Uses E-procurement Systems

Emac Digital:

(Internet procurement site designed for McDonald's Corporation's 27,000 franchises )

Emac Digital Company is E-Procurement website

which is jointly owned by McDonalds and Accel-KKR Internet Co.

 It is a procurement hub launched in 2001 allow all of

McDonald's franchises across the globe to buy everything needed to run their restaurants. From uniform to HamBurger

 Aside from being faster and more convenient for

franchisees, the procurement site also allow business owners to buy supplies and materials at a discounted price, ultimately reducing costs for McDonald's.
E-Procurement allows 85% cut in costs according to

McDonalds supply chief Edwards.

Benefits For the Suppliers

McDonalds works with two types of suppliers.

Major Suppliers Small Suppliers

Major Supplier

Small Suppliers

Emac Digital

McDonalds E-Procurement Model

Global Franchises
Place Orders

Supply Received

Emac Digital

Supplier s

Logistics

 IP (Internet protocol) technology: An IP connection would also open up a host of

options for McDonald's to collect data from its consumers. Internet connections for kids at store locations would not be out of the question. The quicker connection would also allow McDonald's to track purchases and offer customer loyalty programs.

 it will connect headquarters with stores. Replacing traditional and old Dial-up Networking.

McDonald's can collect data much faster

 Working on SRM (suppliers relationship

Management) with Oak Brook.

Developing Next generation e-procurement software

POS.
So, McDonalds e-procurement system is benchmark

while provide final service to the customers form suppliers to customers dish.

Ahmed Ishtiaque

McDonalds Logistics Standards

Distributor Quality Management Process

Operations and Customer Relations

Quality Control (HACCP/QIP) Cold Chain Standards

Hygiene Regulations
Product Handling Standards Emergency and contigency plan

McDonalds Logistics Standards

Risk and Crisis management

Continuous unannounced internal and 3rd party

audits for DCs result in superior quality scores regularly

INFORMATION
Efficiency

Responsiveness

Transportation
The DCs have focused all their resources to meet

McDonald's expectation of 'Cold, Clean, and OnTime Delivery' and plays a very vital role in maintaining the integrity of the products throughout the entire 'cold chain'.

Transportation
The DC receives items from different parts of the

country. These items are stored in rooms with different temperature zones and are finally dispatched to the McDonald's restaurants on the basis of their requirements.

Transportation
The company has both cold and dry storage

facilities with capability to store products up to 22 C as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state. The specially designed trucks maintained the temperature in the storage chamber throughout the journey.

McDonalds Distribution systems

McDonald uses three types of Distribution strategy Franchising Licensing Joint ventures I will discuss them briefly

McDonalds Distribution systems

Franchising
McDonald require franchising from countries on conditions like this The entrepreneur should be trained. 45000$ in franchise fees which is higher than other fast-food companies Total investment would range from 1 million to 1.8 million After setting the entrepreneur will have to pay 12.5 % as royalty tax Contract wll be for 20 years Cash liquidity should be around 250000

McDonalds Distribution systems

Licensing
The Lakson Group of Companies is one of the largest and most well-

diversified companies in Pakistan with a range of foreign affiliated partners that include Tetley Tea, Colgate-Palmolive, McDonalds, Kraft Foods and Phillip Morris International. Colgate-Palmolive Inc.: 30% equity ownership in Colgate- Palmolive (Pakistan) Limited McDonalds Corporation: Siza foods (Pvt.) Limited holds an exclusive Country Development License for Pakistan. Kraft Foods: Holds an exclusive licensing exclusive Country Development License for Pakistan. Tetley Overseas Holdings Ltd: 50% equity ownership in Tetley Clover

McDonalds Distribution systems

Samsung Corby Crave Hit McDonalds: Samsung Electronics

Company Limited, as a joint promotion with McDonalds Pakistan, has introduced the latest Samsung Corby Series mobile phones at McDonalds outlets across Pakistan. McDonalds customers are provided with a chance to win this fabulous cellular product through participation. The youth oriented series is focused on interactivity and is laced with exciting features such as video, images, sound, music and data sharing. The joint promotion aims to generate excitement among the youth and providing them a feel of the touch phones and boosting their comprehension. Other than this McDonalds have license on Airports, Railways etc.

waqar saleem pashah

McDonalds Distribution systems

Joint venture
GAM Corp (Private) Ltd is a joint venture company of McDonalds

Corporation USA. Mc Donalds is worlds leading Fast Food chain having over 30,000 restaurants world wide. Total strength of staff in Pakistan is 1800 person. It has successfully opened 14 restaurants in Punjab. Other than this TOYS R US is another joint venture

Thank you