McDonald

Mcdonald is a global foodservice retailer with 30,000 plus local restaurants serving 52 Million people in
more than 100 countries each day. 70% of McDonald’s restaurants in the whole world are owned and
operated by independent local men and women. It is a famous and well known restaurant of the world and
famous for quick service restaurants. Mcdonalds only chooses food which gets ready in a few minutes
and trains their employees well to make their services quick. It serves world famous french fries, Big
Mac, Quarter Pounder, Chicken Nuggets and Egg McMuffin. The name fast food was first introduced by
McDonalds.

Mcdonalds started in 1940, it was opened by two siblings Dick and Mac McDonald in San Bernardino,
California. They introduced it by “Speedee Service System” in 1948. Its first franchised restaurant was
opened in 1955, 15 april by Ray Kroc in Des Plaines, later he purchased equity of the McDonald brothers
in the company and expanded it world wide. It expanded successfully in the international market, and
became a globalization symbol. Franchises grew very fast as it was said McDonald was opened
worldwide after 5 hours. It has 35000 outlets in 100 countries in the last 21st century.

In september 1998, McDonald’s started in Pakistan, providing its quick services to its customers and
creating a relationship with its customers.Now many Pakistanis have trust on McDonald for high standard
food and quick services. 3000 Pakistanis are currently employed in McDonald's in Pakistan and have
pakistani managers in every restaurant. Mcdonald contributed in other ways too. It invests over 30 billion
rupees in the country, pays taxes and duties that amount to 10 billion plus rupees. Mcdonalds grew and
made more stores in Pakistan as it is doing well.

Basic concept of Supply Chain cycle

We can think of the supply chain as a series of cycles of communication occurring between each two
consecutive stages. The cycles share the same type of communication, since there will always be a buyer
and a supplier.
The further we go from the customer, the bigger the scale of the transactions.

Supply Chain Management: cycle view

The cycle that surely presents uncertainty to the supply chain is the customer cycle, since it contains an
external buyer agent(the customer). Other risks are present when the supply chain includes several
organizations, and are strictly related with the supplier strategies. Such, for example, in the case of
bottleneck products, the risk of not being able to fulfill a demand must be countered by securing supply
sources.
Process views of a supply chain
The processes in a supply chain are divided into a series of cycles each performed at the interface
between two successive stages of a supply chain.

Cycle View of Supply Chain

There are five stages in a supply chain (Supplier Manufacturer Distributor Retailer Customer) and four
supply chain process cycles (customer order, replenishment, manufacturing, procurement cycle).

McDonald’s Global Supply Chain

Having a clear safety and quality policy in place and connecting all facets of our Supply Chain partners
regardless of
● Country
● Culture
● Language

Transferring this message to all involved parties (Vendors, Transport companies, Marketing Agencies,
Supply Chain departments, Restaurants) around the globe requires an extremely effective and complex
safety process. Support and involvement of Senior Management in all phases of the Supply Chain is
crucial for McDonald.

Supply Chain Management at McDonalds

McDonald's is committed to providing quality products while supporting other Pakistan businesses. And
so, we spent a few years setting up a unique Supply Chain, even before we opened our first restaurant in
Pakistan.
A Supply Chain is a network of facilities including - material flow from suppliers and their "upstream"
suppliers at all levels, transformation of materials into semi-finished and finished products, and
distribution of products to customers and their "downstream" customers at all levels. So, raw material
flows as follows: supplier - manufacturer – distributor – retailer – consumer. Information and money
flows in the reverse direction. The balance between these 3 flows is what a Supply Chain is all about.
When there is a balance in the finished product ordering, the Supply Chain operates at its best. Any major
fluctuation in the product ordering pattern causes excess / fluctuating inventories, shortages / stock outs,
longer lead times, higher transportation and manufacturing costs, and mistrust between supply chain
partners. This is called the Bullwhip Effect.
Depending on the situation, the Supply Chain may include major product elements, various suppliers,
geographically dispersed activities, and both upstream and downstream activities. It is critical to go
beyond one’s immediate suppliers and customers to encompass the entire chain, since hidden value often
emerges once the entire chain is visualized. For example, a diesel engine manufacturer may be able to
integrate a GPS locator system into its engine control system. Its immediate customer, a heavy truck
manufacturer, may see no need for this functionality. However, the downstream customer, a trucking
company with a large fleet, may be very interested in a locator system. Understanding the value to the
downstream customer is part of the supply chain management process
Conclusions and suggestions
Through an effective Supply Chain McDonald’s operates in a famously competitive market and delivers
good value for consumers.
● Not by searching on the commodity market for the lowest cost suppliers. It sources only from dedicated
suppliers.
● Not at the expense of safety or quality. It operates an extremely strict auditing regime.
● Not by pressurizing suppliers. It believes in a policy of paying for performance and long term
sustainability for suppliers.
● The secret is a Lean and efficient chain via rigorous measurement, the spreading of knowledge and a
real sense of teamwork.