Table of Contents

I. INTRODUCTION OF MCDONALD.............................................................................3

II. THE ROLE OF OPERATION MANAGEMENT..........................................................5

III. 10 OPERATION MANAGEMENT IN MC DONALD’S..........................................6

IV. SUPPLY CHAIN OF MC DONALD’S......................................................................9

EFFECTIVENESS OF MC DONALD’S SUPPLY CHAIN:..........................................................11

V. CAPACITY PROBLEM IN MC DONALD’S..............................................................12

1. DECISION TREE METHOD.............................................................................................12

2. CAPACITY PROBLEM...................................................................................................13

VI. DIGITAL TECHNOLOGY.......................................................................................14

SOLUTION:..........................................................................................................................14
I. Introduction of McDonald
When it comes to fast food franchises, McDonald's is universally acknowledged as
the best and most well-liked. As its name indicates, McDonald's was created in California,
United States, in 1940 by brothers Dick and Mac McDonald. The company's initial focus
was on serving fast food (burgers) to customers in a hurry or through a drive-through. Ray
Kroc, seeing potential in McDonald's original idea of supplying quick food, developed the
idea of franchising, which has helped the firm grow to the point that it now serves 69
million people every day. There are now more than 36,000 of these restaurants in operation
around the globe.

Figure 1: Transformation Process in Mc Donald’s

McDonald's resources consist of produce, cereals, and food items. These materials,
whether chicken, potatoes, or cheese, serve as the foundation for McDonald's products.
Utilizing the facility's equipment, staff function as transformative resources inside the
facility. The inputs include goods, expertise (recipes, equipment operation), customers
(orders), facilities, and McDonald's staff. Preparation, storage, and distribution of food are
all components of the process of transformation. The outputs include of both menu products
and the customer service experience at McDonald's. This is a simplified model for the
operations of a McDonald's-style fast-food restaurant franchise. Although there are
variations, this basic model is chosen for the purposes of this investigation. The change
process is both global and local. Fish, cows, and poultry must be raised, matured,
slaughtered, and prepared for shipment. The chicken is fried and placed on sandwiches at all
McDonald's locations throughout the globe. The transformation process happens on an
industrial, large-scale scale and must be repeated at the local level. McDonald's business and
marketing strategy relies heavily on direct consumer contact.
1. Vision
McDonald's will raise the bar for fast-food restaurants in Vietnam by giving
customers something they can only get at our restaurant chain. Our goal is to serve good
food and be a good member of the community.
We serve delicious food made with the best ingredients and made according to what
each customer wants.
We always give our employees chances to move up in their careers with the
company. From there, we work together to serve our customers in the best way possible.
We always care about the community, especially children and families. We make
people happy and make their lives better.
2. Mission
The most popular dining spot for consumers! We are committed to continuously
improving the quality of our services and providing our customers with exciting experiences
through our most popular products, such as the world-famous French Fries, Big Mac burger,
and Chicken McNuggets, and above all experiences that are exclusive to McDonald's
restaurants.
3. Core Value
• Food of the highest caliber:
• Exceptional service: Professionalism
• Clean and inviting atmosphere: clean and welcoming environment
• Excellent value: Reasonable cost

II. The Role of Operation Management

Planning, scheduling, and managing the operations of the processes that transform
raw materials into finished goods and services are the responsibilities of operations
management... Management of operations is the process of making the most effective use of
an organization's resources in order to provide consumers with the finished goods or
services they need in a timely manner and at a price that is affordable to them. The
management of operations is intrinsically linked to the overall strategy of the company.
The objective of developing an operations strategy is to provide a plan for the
operations function, with the goal of enabling that function to make the best possible use of
its available resources. The organization's long-term competitive strategy is supported by
the operational strategy, which describes the policies and objectives for utilizing the
organization's resources to achieve those goals.
Targets for McDonald's performance are devised with the intention of assisting the
corporation in maintaining its status as the market leader in the fast-food sector around the
globe. The restaurant is comprised of a great number of departments, all of which contribute
in their own unique way to the overall process of attaining the restaurant's goals. The ability
of the restaurant to fulfill the needs of its customers on a daily basis is contingent on the
achievement of a number of critical performance goals.

Strategic Objectives Tactical Objectives

McDonald’s strategic plan focuses on a The key strategic aim of McDonald's is to
long-term outlook to deliver meaningful deepen its relationship with consumers
growth and increase guest counts, a and expand the base of its existing
reliable measure of the Company’s customers. In order to accomplish this
strength that is vital to growing sales and goal, McDonald's has to address concerns
shareholder value. We are targeting over the nutritional value and safety of
opportunities at the core of McDonald’s their cuisine. The documentary "Supersize
— food, value, and the customer Me," which was released in 2004,
experience. revealed the unfavorable results of
consuming fast food and was responsible
for the harm done to McDonald's image as
a healthy food firm. Since the debut of the
video, McDonald's has prioritized
strengthening its connections with its
clientele as one of its primary business
goals. This is necessary for the company
 to avoid being seen in the manner
described above.

III. 10 Operation Management in Mc Donald’s

1. Design of Good & Services
Organizations exist to provide products and services to other organizations or
persons. As a result, product and service planning is one of the most important duties for
every company. It comprises producing goods with economy and quality in mind, that a
customer will find attractive, that are simple to understand and use with minimal risk, and
that will delight him or her with their performance, flavors, durability, and so on. Bicheno
(2002, p.51)
McDonald's Restaurants prioritizes product planning. To meet the ever-changing
wants of its customers, it must constantly add new things to its menu. For example, in
response to the increased demand for healthy cuisine among guests, the restaurant
introduced healthier food items to its menu. Similarly, seasonal foods, such as hot coffee in
the winter and milkshakes in the summer, must be included.
2. Quality
Quality is important at McDonald's for two reasons. First, there are regulatory
requirements regulating the quality of the food served. The second goal is to maintain the
great reputation that McDonald's restaurants have built over the years. McDonald's uses a
number of measures to guarantee that the food served is of good quality. Such approaches
include visits by the food inspector from the main office, supervisor inspections, and so
forth.
3. Process & Capacity Design
After establishing a product, organizations must create manufacturing and
maintenance procedures. Organizations must establish the procedures necessary to
accomplish the required production of the intended products and services at the acceptable
quality levels. Organization evaluates both the conventional techniques it has used to handle
and process its goods and services, as well as the alternatives that are now available. Thus, it
takes into account the evolution of technology, computer power, and management skill.
(Bicheno, 2002; p99)
 Similarly, at McDonald's restaurants, the operations manager designs and implements
the cooking process so that food is cooked using a manner that maintains both the speed and
quality of meal preparation. In addition, it develops procedures such that health, safety, and
hygiene concerns are taken into account. Also, the managers maintain on adding newest
equipments with the improvement of technology so as to bring speed, precision and quality
in the product.
4. Location
Additionally, McDonald's Restaurants are responsible for planning their locations in
such a manner as to attract the most number of customers possible. As a result, McDonald's
prefers sites that provide easy access to various modes of transportation as well as parking
space and a big number of potential customers. In addition, it gives preference to locations
that are appropriate for the supply of raw materials, which means that there must be
adequate space available for the receipt of raw material deliveries.
5. Layout Design
The design of the floor plan for a McDonald's restaurant is also a highly essential
activity there. It is extremely important to arrange the appliances in the kitchen in the
appropriate fashion in order to enable the production of high-quality meals in a shorter
amount of time. Additionally, it builds its layout while bearing the concerns of health and
safety in mind. In addition to this, it plans the arrangement in such a manner that the
requirements for monitoring are reduced. Another aspect that must be taken into account is
the total manufacturing cost, which is in part determined by the product layout.
6. Human resources & Job Design
Job design is also a significant purpose in McDonald's restaurants. Every worker is
assigned a unique combination of responsibilities. For instance, some members of the staff
prepare food products in the kitchen, some members of the staff operate behind the counter,
and some members of the staff attend to customers in the lobby. In addition, there is staff
that monitors the work of all of the crew members and looks out for the overall health of the
restaurant. When developing these job opportunities, the technical, economic, and
behavioral feasibility of them are all taken into consideration.
7. Supply Chain Management
 Supply chain management (SCM) helps a company to offer the necessary items and
services at the right time, in the right quantity, and at an acceptable price. Effectively
managing this process entails monitoring supplier and customer relationships, limiting
inventory, forecasting demand, and getting continuous feedback on the condition of each
supply chain link. (Kay, 2001; p1)
Multiple suppliers provide McDonald's Corporation restaurants with raw ingredients
such as buns, meat, patties, ketchup, sauce, mayonnaise, disposable cups, food packaging
materials, etc. Therefore, it must effectively manage its connection in order to obtain the
raw materials on schedule, in sufficient quantity, and at a reasonable price.
8. Inventory
A vital component of any organization is inventory management. It involves
deciding on the best inventory management strategy. Businesses must take the expected
demand for their products into account when choosing an inventory management strategy.
Although the bases upon which businesses choose their inventory management systems
might differ, the goal is always the same: to make sure that the mix of inventory types can
satisfy consumer requests and provide the proper profitability and cash flows.
The First-In-First-Out, Just-In-Time, and Re-order point concepts are used to
manage McDonald's inventory. This is due to the stock's predominant composition of
perishable goods. As a result, depending on the restaurant's weekly sales, merchandise is
delivered three or more times. Additionally, goods are kept in a freezer with sufficient
packaging to ensure the freshness of the food. These are all actions that are part of the
company's inventory management.
9. Scheduling
McDonald's uses corporate scheduling standards based on the needs of the supply
chain, local market conditions, and legal obligations. For instance, the company's strategy
comprises regular and seasonal schedules to account for fluctuations in the local market's
demand. Because of this, McDonald's is flexible and sensitive to changing market
conditions in this area of operational management decision-making.
10. Maintenance
The assets of an organization may be preserved via maintenance activities. To put it
another way, maintenance is a way to protect the people who work in the manufacturing
department of your company, as well as the office workers, drivers, and anybody else who
uses its assets.
The production of meals at McDonald's requires the use of a number of different
types of equipment. As a result, it is of the utmost importance to maintain and service these
machines in order to ensure that the product continues to meet quality standards, that the
employees remain unharmed, and that the business does not pay any extra costs due to the
need for repairs on the equipment. In addition, upkeep is required for aspects such as
cleanliness, pricing, and quality, amongst others.

IV. Supply Chain of Mc Donald’s

In their research paper, Dr. Hau Lee and co-author Corey Billington define supply
chain management as the integration of activities occurring at the network's facilities to
generate materials, move them into central products, and then to the final finished product,
before delivering it to the customer via the distribution system. McDonald's Supply Chain of
Products will be detailed here.

Figure 2: Mc Donald’s Supply Chain Model

External Suppliers:
Contains many tiers of supply for commodities and resources. The suppliers to
McDonald's restaurants are referred to as the first layer of suppliers, and the suppliers to the
first layer of suppliers are referred to as the second layer of suppliers... up to the first
supplier layer.
Coca-Cola is the second tier of external suppliers, since it supplies the Keystone
distributor, which is the first supplier to McDonald's restaurants. Other second-tier
suppliers, such as Vista Processed Foods, which provides poultry and veggies, and McCain
Foods India, which provides French fries, potato wedges, and hash browns, also deliver
their goods to consumers' homes. machinery for product processing and packing.
Internal Functions:
The manufacture and processing of the fast-food supply chain at McDonald's is a
highly sophisticated and careful procedure. McDonald's prioritizes not just its goods, but
also the uniformity of its processes. Their production's logistical tasks are very concentrated.
The secret of the fast-food business is not the old concept that something is unique, the new
achievement is wonderful, but the incredibly thorough selection of components to
manufacture fairly basic meals like French fries. McDonald's invested millions of dollars to
bring from the United States to Vietnam a machine that creates bagels for their hamburgers.
From the source of input materials, companies design and execute solutions to
improve the production flow from receiving production components to producing final
goods.

External Distributors:

This refers to the transfer of items from the operation, processing, and creation of final
goods to clients. This is the last step of the McDonald's supply chain, which is done by
customers at Drive-Thru chain shops.

McDonald's use three inventory control techniques:

• Just-In-Time (JIT): For perishable ingredients, fresh ingredients are supplied JIT for
incorporation into the product, and the product is finished JIT prior to being served to the
client. This allows the restaurant to minimize expenditures and storage space, all while
improving product quality.

• Reorder point (ROP): for non-perishable items ROP represents the time when a restaurant
must place a fresh order. To prevent dissatisfied clients, ensure that you are never out of
stock.

• First In, First Out (FIFO): for every element All supplies, processes, and final goods at
McDonald's are managed using the FIFO approach. This indicates that items are used in the
order of their receipt. Therefore, inventory is always fresh, since things are sold in the order
in which they were inputted.

Effectiveness of Mc Donald’s Supply Chain:

First of all, McDonald's has successfully operated the supply chain because it has to
consider all factors in the supply chain. The linkage from suppliers and manufacturing
facilities through warehouses and distribution centers to stores helps the company achieve
its goals on many levels.
Strategic level:
McDonald's is not hesitant to try new things and use novel technology in order to
maximize the efficiency of its warehouses and factories in terms of their quantity, location,
and overall capacity. The long-term performance of the organization is impacted as a result
of this, including a reduction in personnel and production expenses, which leads to an
improvement in service quality and an increase in revenue..
Tactical level:
McDonald's regularly commits to partnering with compatible suppliers on a quarterly
basis locally in each location where it expands its business. The relationship between
McDonald's and local suppliers has always been a win-win. Example: In the Indian market,
McDonald's does business with 38 local suppliers and supplies 96% of the products to
McDonald's restaurants. To check for quality and safety, McDonald's developed the
McDonald's Quality Control System through which checks are carried out through 20
different points in the cold supply chain. This effectively impacts the short-term
performance of the organization helping the company to cut costs temporarily during
transportation and production.
Enviroment Problems: Currently, the problem of environmental pollution caused by waste
is of great concern to the majority of people. This is a big problem for companies that
supply packaged products, including McDonald's.

Solution: McDonald's packaging always assures the food is fresh, hot, convenient, and safe.
In addition, McDonald's is dedicated to protecting the environment by using less cardboard.
McDonald's has decreased tray liner use to save 127 tons of paper per year. 72% of all used
cardboard is composed of recycled paper. In an effort to decrease plastic waste in the
environment, paper boxes have replaced plastic salad containers, while McDonald's has
abandoned foam containers in favor of paper containers made from renewable resources.
According to statistics, 89% of McDonald's United Kingdom packaging is created from
renewable resources. In addition, McDonald's water cups and napkins are manufactured
from recycled materials.

Results: As a direct consequence of the adjustment in packaging, McDonald's has realized

yearly cost savings of $6 million, eliminated more than 300 million pounds of packing
material, recycled 1 million tons of cardboard, and reduced the amount of trash generated by
its restaurants by 30 percent. 7. Providing Service to Customers McDonald's takes great
pride in ensuring that each of its locations offers sanitary items and services of the highest
possible quality to its patrons. They have found that actively listening to and responding to
feedback from customers is the key to their continued success. They want to dominate the
industry, and the only way they can achieve this goal is by focusing on the feedback they
get from their most important customers.

V. Capacity Problem in Mc Donald’s

1. Decision Tree method
A decision tree (Quinlan, 1993) is a formalization for specifying such mappings; it
consists of tests or attribute nodes linked to two or more sub-trees and leaves or decision
nodes labeled with a class representing the result. A test node computes a result depending
on the instance's attribute values, with each conceivable result corresponding to a subtree.
Classifying an instance starts at the tree's root node. If this node is a test, the conclusion of
the instance is determined and the process continues using the relevant subtree. The label of
a leaf encountered shows the anticipated class of the instance.
 Decision trees are used to establish a strategy for achieving a particular objective.
Utilizing decision trees facilitates the decision-making process. Decision trees are a kind of
tree structures.
Advantages:
• It is simple to grasp and analyze a decision tree.
• It is possible to include both objective facts and subjective factors, such as preferences and
expert opinion.
• It is compatible with a variety of different decision-making methods.
• It is simple to put in new possible outcomes.
Disadvantages:
• If a decision tree is used for categorical variables that have several levels, the variables that
have more levels will have a greater information gain from using the tree.
• The calculations have the potential to grow quite complicated very rapidly, but in most
cases, this will only be a concern if the tree is being generated manually.
2. Capacity Problem
• The outlet is small and it is not able to handle the crowd.
• The facility may either create a new outlet in the area or enlarge the existing one,
both of which are viable possibilities.
• According to the findings of the market study, the possibility of success if we extend
the outlet is 80%; the cost would be 500,000 Vietnamese Dong, and the income that would
be created would be 1,000,000 Vietnamese Dong. The loss, in the event of failure, would
amount to 300 thousand VND.
• If we opened a new location in the area, there is a 60% chance that it would be
successful. The initial investment would be 900 thousand Vietnamese Dong, and the income
it brought in would be 1.4 million Vietnamese Dong. In the event of a failure, the loss
would amount to 400,000 Vietnamese Dong.
 Figure 3: Decision Tree Model
In accordance with the decision tree concept, the following two outcomes are possible:
1. EMV at node 1 = (0,8 x 1) + (0,2 x (- 0,3)) = 740 thousand VND.
2. EMV at node 2 = (0,6 x 1,4) + (0,4 x (- 0,4)) = 640 thousand VND.
Therefore, the conclusion reached at note A is to expand the plants since doing so
would result in increased profits..

VI. Digital Technology

McDonald's attempts to improve the customer experience while simultaneously

keeping and bringing back existing consumers to the company are centered on digital
transformation as a fundamental strategy.

1. Personalize your menu with drive thru: Drive-thru is a way of food service that
enables customers to sit in their automobiles, wait in line, order food via a window, and get
their meal.
2. Build a digital ordering counter: With digital order counters, there is no need for
consumers to wait in line at the counter; instead, they may place their orders at the kiosks.
At the kiosk's screen, buyers may pick from all menu items including special edition
items, choose portion sizes, beverages, and even order more or missing side dishes.
Customers may also pay with a credit card or debit card and get a receipt.
3. Order food on mobile app: McDonald's enables consumers to purchase using a
mobile phone application, the meal will be delivered to their house, or ordered at any place
that the client specifies.
4. Taking care of customers with AI technology: In September of 2019, McDonald's
announced that it has acquired Apprente, an artificial intelligence-based conversation
technology business. Apprente creates a platform for order processing that is multilingual,
multizonal, and contextual... This technology will enhance McDonald's drive-thru
operations and may be utilized in the future for ordering by phone and kiosk.

Solution:
Ordering meals using a mobile app is the answer to the capacity issue that was
discussed above since it may eliminate the need for shop development and growth. This
may result in significant cost savings. An app that facilitates food delivery is beneficial not
just to consumers but also to all participants in the food supply chain. Everyone in the food
service business, from restaurants to food delivery agencies and aggregators, stands to gain
from the growth of this industry. Customers may profit from a meal delivery service that is
tailored to their busy, high-end lifestyle, while restaurants can gain from lower store
expansion expenses and it has more potential for sales, brand promotion, and exposure.
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