Identify an existing company. Present the picture of its inventory management.

 
During pandemic investigate their strategies for effective inventory management.
Company: McDonald’s

          McDonald's is known internationally for being one of the largest fast-food chain
restaurants. The founder was Ray Croc, a distributor of Milkshake Machines until he
bought the Mc Brother's which he later renamed as McDonald's. The business uses the
Ray-Croc Model which represents a three-legged-stool that signifies balance among the
Owner. Operators, Suppliers, and the Employees.

            The inventory management of McDonald’s as seen above, it involves the

regional planner, as it includes ranges of departments in order to calculate factors of
forecasting for inventory. The ICT stock control system is called Manugistics as the
software application principally for resource planning and supply chain management.
This software is the sole operator of keeping inventory in-check at McDonald’s.
            The process overview of McDonald’s inventory operations are attached above. It
is designed to produce output with minimum lead time at lowest cost, minimizing waste
with great consistency (Brower, M.) This system is named Just-In-Time Inventory
System McDonald’s Corporation. The system is explained as eliminating safety stock
into having zero inventories for it reduces waste. McDonald’s uses Just-in-time
Inventory system (Aktinson, 2005). In my accumulated knowledge, this process leads
to productivity for pre-cook and pre-made products are already present, thus, need to
cook and assemble such ingredients is avoided, as well as wastage of time. According
to Aktinson, 2005, reduction of cost of ordering, and cost of holding, and reduction in
safety stock are the advantages of this inventory system.
McDonald’s Inventory Management System during Covid-19
            The JIT model is available and will only be utilized in a short period of time at
post-covid, for only overcoming the current supply chain and infrastructure constraints.
At this moment, it isn’t a sustainable strategy because of the significant amount of
constraints implemented, as stated by Harsha Razdan, Partner and Head, Consumer
Markets and Internet Business, KPMG India.
                Because of this, the Manugistics supply chain system is the sole independent
operating inventory management system of McDonald’s as the Manugistics system
does daily reads of sales at each restaurant, and converts the information into
theoretical inventory. From this, it analyzes how much inventory a restaurant will need in
the future -- for promotions in the United States and for all products in Europ, (Baeur
2020).
            Only 45% of the 12,100 participating restaurants in the United States remained
in stock during a 28-day special promotion before using the system, however, after
utilizing the system, 90% remained in stock throughout the promotion. Inventories are
cut by 30% to implement the reduction of raw-item waste in France and Germany. Due
to shortages, the number of times a manager had to bring store product from one was
reduced from eight to four.
            To conclude, called Manugistics as the software application principally for
resource planning and supply chain management became the reliable source of
keeping order of inventory in McDonald’s company amidst the pandemic. The Just-in-
Time system provided effectiveness during the normalcy due to its nature of providing
pre-made orders to consumers. Because of Covid-19, customers became afraid to eat
out and venture the streets thereby collapsing such businesses, however, a prestigious
company like McDonald’s won’t fall because of its effective inventory management
system.
References
An Outline of McDonald’s Wildly Successful Supply Chain Management. (2018).
Retrieved from https://www.dynamicinventory.net/mcdonalds-best-supply-chain-
management/#:~:text=McDonald's%20inventory%20is%20managed%20by,Accurate
%20demand%20forecasting.&text=They%20use%20the%20stock%20control,generate
%20forecasts%20for%20each%20restaurant  (Links to an external site.).
Bora, G. (2020). Covid-19 Has Upended A Key Management Principle-Or Has It?
Retrieved from https://economictimes.indiatimes.com/small-biz/sme-sector/covid-19-
has-upended-a-key-management-principle-just-in-time-jit-
inventory/articleshow/76477328.cms?from=mdr (Links to an external site.)
Dzananovic, S. (n.d.). How McDonald’s Manage Their Inventory. Retrieved
from https://www.academia.edu/12695292/How_does_Mcdonalds_manage_their_inven
tory (Links to an external site.)
Ellis, K. (2020). Mcdonald's Controls Inventory Worldwide With System. Retrieved
from https://www.supermarketnews.com/archive/mcdonalds-controls-inventory-
worldwide-system