McDonald’s

The Roots of Quality of McDonald’s

McDonald’s passion for quality meant that every single ingredient was tested, tasted and shaped to
suit the software package. Kroc shared his vision of McDonald’s future, promoting his early
suppliers on future volumes. They believed in him and conjointly the building boomed.
Again, Ray Kroc was wanting for a partnership, and he managed to make the
foremost integrated, economical and innovative provide system inside the food trade.
These supplier relationships have flourished over the decades. In fact, many McDonald’s
suppliers' operatives lately first started the business with an acknowledgement from Ray Kroc.

Worldwide Supply Chain, Development, and Franchising

Jose Armario is Executive Vice President of Worldwide Supply Chain, Development, and
Franchising for McDonald’s Corporation. In this role, Jose supports the global business in the
creation and execution of their market development strategies, including market analytics, tools
and metrics along with talent development support. McDonald’s Supply Chain is responsible for
the procurement of all food, packaging, and premiums. Additionally, Jose’s role in leading
Supply Chain includes oversight for global food safety and quality systems. Jose is also
responsible for the company’s overall franchising strategy.
He is a member of the Board of Directors for USG Corporation, where he serves on the Audit &
Compensation Committees; a director of the International Advisory Board and President’s
Council of the University of Miami; the Chicago Council on Global Affairs.

Indian Supply Chain

Suppliers of Raw Materials:

McDonald’s India today purchases more than 96% of its products and supplies from Indian
suppliers. It imports only oil and fries. McDonald’s has a total of 40 suppliers in which 14 are the
core suppliers, known as Tier-1 suppliers, they supply directly to the fast-food chain:

ITEM PLACE
Cheese Dynamix Dairy Industries Ltd., Pune
Dehydrated onions Jain Foods, Jalgaon
Iceberg lettuce Trikaya Agriculture, Pune
Chicken patty Vista Foods, Taloja
Veg. Patty, Veg. Nuggets, Pie's Katrina Foods, Taloja
Chicken (dressed) Riverdale, Talegaon
Buns Cremica Industries, Phillaur
Eggless mayonnaise Quaker Cremica Pvt. Ltd., Phillaur

Sesame seeds Ghaziabad

Fish fillet patties Amalgam Foods Ltd., Kochi.
Vegetable for the patties Finns Frozen Foods; Nasik and Jain Foods,
Jalgaon
Mutton and Mutton Patties Al Kabeer, Hyderabad
Core Suppliers:
 Amrit Foods: Amrit Foods, a division of Amrit Banaspati, has been associated with
McDonald’s India as a supplier of Dairy Mixes, Soft Serve Mix and Milk Shake Mix for
over a decade now.

 Cremica Industries: Cremica Industries was started in 1980 as a small ice-cream unit

run by Mrs Bector out of her backyard in Ludhiana. However, after its initial success,
Cremica added buns and biscuits to its product line and in 1996 McDonald’s selected
Cremica to be its supplier for buns, liquid condiments, batter and breading in
collaboration with its international partners.

 Dynamix Dairies: McDonald’s India has approved Dynamix Dairies, Baramati

(Maharashtra) for the supply of cheese to its restaurants. Dynamix has a modern
automated plant that is fully computer-controlled.

 Trikaya Agriculture: Trikaya Agriculture is McDonald’s supplier of fresh iceberg

lettuce. The farms at Talegaon, Maharashtra produce the crop throughout the year.

 Vista Processed Foods: Supplier of Chicken and vegetable products from its Hi-tech
refrigeration plants for the manufacture of frozen foods at a temperature as low as -35C.

Logistics:
 100 sales items in the restaurant
 400 SKUs in the warehouse
 200 restaurants per Distribution Centre(DC) (~180 DCs globally)
 Delivery frequency: ~3/wk, higher in urban areas
 2–3 stops per route
 Exclusive distributors (3PL)
 Strong quality focus (Cold Chain, HACCP, QIP).

Transportation:
The items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements.
The company has 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.
Trucks:
 National inbound — Supplier to DC: 20 vehicles + 2 for Kolkata.
 Outbound north — DC to restaurant: 13 vehicles.
  Outbound west — DC to restaurant: 11 vehicles.
 Outbound south — DC to restaurant: 1 vehicle.
 Proposed Kolkata — DC to restaurant: 1 vehicle

Conclusion:
McDonald‟s Supply Chain is quite uniquely handled with the least number of employees
on McDonald‟s payroll. The control over outsourced entities is commendable. With an
ever-growing business of fast food McDonald’s has laid down its systems efficiently and
expanding at enormous speed. The model can be replicated in other sectors as well.

References:
 https://www.researchgate.net/publication/276881546_A_CASE_STUDY_ON_MCDO
NALD'S_SUPPLY-CHAIN_IN_INDIA

 Essays, UK. (November 2013). Supply Chain Management of Mcdonalds in India.

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