Mc DONALDS SUPPLY CHAIN

Deevanshu Saxena Deepti Goyal Nayandeep Kaur Rajesh Yadav Ridhi Poddar

Agenda 
Company Overview  The McDonald¶s Supply Chain  Supply Chain Integration  Results

Cleanliness and Value Ray Kroc: ³None of us is as good as all of us´ Plan To Win -> Successful business revitalization Growth by getting better . Service.6 million employees: 1.6  Customers Per Day: 47 million Day: 47  Corporate Strategy:     QSC&V: Quality.The McDonald·s System ² the World·s Best QSR experience  World Market Leader in the QSR area (Quick Service Restaurant)  Franchise System (72%)  System employees: 1.

One global Marketing Strategy « .

New Products « .

« and on-going innovations on- .

Quick Service Restaurant Quick Service Restaurant .

.

Jetia. . in 2000. McDonald's India. Mumbai Joint Venture." . managing director.The McDonald·s Supply Chain  "Our growth plan for the next three years is more a function of getting our logistics and cold chain right rather than going to far off places.Amit Jetia.

The McDonald·s Supply Chain  Purchasing  ³The 3 legged stool´: Corporation ± Franchisees ± Suppliers  Exclusive. certified facilities  Handshake agreements. risk sharing win Rigorous product and service specifications  Strong focus on quality. Trust  Long term win-win partnership. product specification and environmental audits  Distributor is wholesaler for Restaurants .

500) ~200 restaurants per DC (~180 DCs globally) Delivery frequency: ~3/wk. risk sharing  Strong quality focus (Cold Chain. QIP) . HACCP.The McDonald·s Supply Chain  Logistics        ~100 sales items in the restaurant ~400 SKUs in the warehouse (Hubs: up to 1. higher in urban areas 2-3 stops per route Exclusive distributors (3PL) Long term partnerships with service providers.

Bangalore in 2004. and the latest one in Kolkata (2007). . McDonald¶s initiative to set up an efficient supply chain and deploy state-of-art technology changed the entire state-ofIndian fast food industry  McDonald¶s distribution centres in India came in the following order: Noida and Kalamboli (Mumbai) in 1996.Mc D India supply chain  Before it set up its first restaurant in the country it infused Rs 400 Crore to set up its delivery mechanism.

it worked frenetically to put the perfect supply chain in place. (Mumbai) and Connaught Plaza Restaurant (New Delhi). It trained the local farmers to produce lettuces or potatoes to specifications and worked with a vendor to get the perfect cold chain in place. . Between 1992 and 1996. Ltd. And explained to the suppliers precisely why only one particular size of peas was acceptable These efforts paid off in the form of joint ventures between McDonald's India (a 100% whollywholly-owned subsidiary of McDonald's USA) and Hardcastle Restaurants Pvt. when McDonald's opened its first outlet in India.

Ltd. Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts) . Dynamix Dairy Industries (Supplier of Cheese) 2. Vista Processed Foods Pvt. Trikaya Agriculture (Supplier of Iceberg Lettuce) 3.COLD CHAIN Partners 1. Radhakrishna Foodland (Distribution Centres for Delhi and Mumbai) 5. (Supplier of Chicken and Vegetable range of products including Fruit Pies) 4.

skimmed milk powder. lactose. the temperature is never allowed to increase. casein & whey protein and humanized baby food  Stringent quality control measures and continuous Research & Development Each batch is mixed in one large stainless steel cooler and chilled immediately to two degrees Celsius to stop bacterial growth and preserve freshness. ully  Capability to convert milk into cheese. until just before the burger is actually served in a McDonald¶s restaurant hundreds of kilometers away. butter/ghee. Dynamix Dairy Industries (Supplier of Cheese)  Fully automatic international standard processing facility. .1. From this point onwards.

pre-cooling. Pre Refrigerated truck for transportation.2. ensuring no delay between harvesting. prepackaging and cold storage  .  The pack house. Trikaya Agriculture (Supplier of Iceberg Lettuce)  A specialized nursery with a team of agricultural experts  Drip and sprinkler irrigation in raised farm beds with fertilizer mixing plant.  The pre-cooling room ensures rapid vacuum cooling to 2º C within pre90 minutes. pre-cooling and cold room are located at the prefarms itself.  Vegetables are moved into the pre-cooling room within half an prehour of harvesting.  Pre-cooling room and a large cold room for post harvest handling.

Maharashtra. . produces a range of frozen chicken and vegetable foods. A world class infrastructure at their plant at Taloja.. Ltd. Ltd. McDonald's India Pvt. and Vista Processed Foods Pvt. Taloja.3) Vista Processed Foods Pvt. This is vital to ensure that the 35° frozen food retains it freshness for a long time and the 'cold chain' is maintained. has: The technology includes hi-tech refrigeration plants for manufacture of frozen hifood at temperatures as low as . USA. The frozen product is immediately moved to cold storage rooms.35° C.. (Supplier of Chicken and Vegetable range of products including Fruit Pies) A joint venture with OSI Industries Inc. Ltd.

Cel. data collection. providing the entire range of services including procurement.3. 3. 1. 'Cold. deliveries. and On-Time Delivery' OnPlays a very vital role in maintaining the integrity of the products throughout the entire 'cold chain'. recording and reporting. A one-stop shop for all distribution management services. Foodland specializes in handling large volumes. Effective process control for minimum distribution cost. Dry and cold storage facility to store and transport perishable products at temperatures upto -22 Degree Cel. . inventory management. quality inspection. storage. Radhakrishna Foodland (Distribution Centres for Delhi and Mumbai)  An integral part of the Radhakrishna Group. Clean. one2.

Setting up of the Cold Chain has also enabled it to cut down on operational wastage  Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety  Based on HACCP guidelines. control points and critical control points for all McDonald's major food processing plants and restaurants in India have been identified .Mc D India supply chain  Quality Inspection Programme (QIP) carries out quality checks at (QIP) over 20 different points in the Cold Chain system.

The McDonald·s Supply Chain  McDonald¶s Supply Chain Challenges  Even stronger focus on freshness and quality  On-going product innovations On Strong customer demand fluctuations based on promotions  Order.and inventory management Orderrestaurant ± DC ± supplier raw material supplier  Bull Whip effect  Change Management in a dedecentralized structure .

Future orientated strategies .

Supply Chain Integration .

...One Stop Shopping The McDonald¶s Supply Chain ³One Stop Shopping´ processes and an automated water supply have a lot in common: ³As demand arises on customers¶ side .... supply turns on and off automatically. . « but they need not care where the goods come from!´ ..

´One-Stop-Shopping´ Lean Logistics Solution One-Stop- .

Supply Chain Services for McDonald¶s restaurants .

Results .

15%  Raw Waste Reduction  Not included in Business Case  Raw Waste Reduced  Reduced by 30% Inventory Reduction  15% decrease on the Inventory Level Average Inventory Reduced  Reduced by 30% Store Transfers Reduction Simplification of Order Process Store Transfers Halved Order Time Halved .Results Goals:  Yield Achievements:  Yield Improvement Improvement  0.15% increase in Gross Margin  Gross Margin improvement > 0.

Synchronization delivers significant business benefits to both the customer and the supply chain  Enablers  One stop shopping concept  Inventory management .Restaurant simplification  Synchronizing the perishable Supply Chain  Demand forecasting  Promotional + Continuous Supply  Supplier and DC level  Supply Planning  Restaurant and DC level  Visibility and Collaboration across the chain .Central file management .

Thank you very much for your kind attention .

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