Operation Management Techniques at McDonalds - Term Paper Example

?Running head: Operation Management Techniques Operation Management Techniques at McDonalds Insert Insert Grade Insert 06 May 2012 Abstract McDonalds is a global corporation with the presence in many states and has demonstrated to be an accomplishment in the fast food industry. The corporation is an epitome of globalization representing the application of complex management approaches in business operations. Owing to the success of the corporation, there is evidence that McDonalds utilizes distinct operation management techniques that often give it an edge over others in the global business environment. This is informed by the actuality that being a service business, McDonald has widespread operations in virtually all the regions across the world that comprise of America, Asia and Europe. This makes it be essential to circumspectly examine the relevant methods of operations management as applied by McDonalds. Such an evaluation will consider the strategic methods that make the company distinct with regard to business effectiveness. Since operations management regards the development, in addition to the organization of merchandise, systems, and services along with supply chains and is founded on the attainment, expansion and use of resources that business entities need to convey commodities to clients, a comprehensive evaluation of McDonalds’ operations management will expose the basic activities and strategies that make the company unique. Such a report will be necessary in providing information that could be used by other companies pursuing effectiveness. Table of Contents I. Introduction……………………………………………………………………………….3 A. Objectives…………………………………………………………………………3 B. Motivation…………………………………………………………………………3 C. Report Outline……………………………………………………………………..4 II. Detailed Study and Comparative Analysis………………………………………………. 5 A. Overview of McDonalds…………………………………………………………..5 B. McDonald’s operations management……………………………………………..6 C. Operations management techniques in McDonalds……………………………....7 III. Recommendation………………………………………………………………………...11 IV. Conclusion……………………………………………………………………………….12 V. References……………………………………………………………………………….13 Introduction A). The Goals and Objectives The central function of this account is to examine McDonalds, particularly how it utilizes operation management techniques in its activities. The description will spotlight the manner in which operations management is practiced in McDonalds. This will help establish the dynamics employed by the relevant company in achieving its objectives as well as executing its daily commercial activities. McDonald stands out as a very successful global commercial entity with outlets all over the world, there must be something quite distinct about the operations management of this company (Render & Heizer, 2005). The account will endeavor to underscore the exact essence of McDonald brand in the perspective of operations management to bring out the practices that make the global corporation a success. The eventual aspiration of the testimony is to evaluate and offer a comprehensive account of the practices of operation management in McDonalds Company. B). Motivation The motivation for studying this topic is derived from the significance of operations management in commercial entities as well as the global commercial presence of McDonalds. Operations management is a dynamic discipline in management that caters for the design and administration of merchandises, services and practices (Welch et al, 2007). It envisages the acquirement, development and application of resources that corporations require to convey the merchandise and services demanded by their customers. Therefore, operations management is an imperative aspect of overall management and administration of commercial firms. Subsequently, the global commercial presence of McDonalds offers the inspiration to evaluate the company’s operation management techniques. Incidentally, McDonalds is the leading chain of fast food eateries in the globe with an existence in further than 100 nations as well as a daily client profile of 68 million. This makes McDonald a credible focus of this study; bearing in mind that being a global retail player the corporations have a comprehensive operation management practice that will be evaluated in this report. Thus the combination of the greatness of McDonald in the fast food business together with the immense importance of operations management in commercial entities inspires this account. As a matter of fact, the account bass its purpose of exploring the dynamic operations management profile of McDonald global corporation. Through such a task the paper attempts to fulfill two purposes first to underscore the significance of operation management and secondly to denote the operation management practices in McDonald Company. Operations management regards the design and administration of merchandise, techniques, services and supply chains. It is fundamentally based on the acquisition, expansion as well as use of resources that companies need to offer commodities to clients (Verma & Boyer, 2009). The scope of operations management stretches from strategic to planned and operational stages. Strategic parameters involve shaping the dimension of production locations, choosing the structure of communication links as well as developing technology delivery chains. Tactical aspects comprise of layout of production plants, techniques of project management, and equipment choice and replacement. Operational parameters comprise of scheduling and management, inventory administration, quality control, transfer and material handling along with frameworks for maintenance of equipment. In essence, operations management denote the coordination of activities that revolve around goods, services and supply chain administration which are crucial to the success of any business venture. Fundamentally, no organization can claim to be effective when it has poor product and service administration and dysfunctional supply chains. Therefore, operations management regards the core procedures that determine the success of an organization namely; administrations of merchandises and services along with supply chains. D). Report Outline In analyzing McDonalds regarding how it utilizes operation management techniques the report will be demarcated into five respective sections. This will help provide an in-depth account of the practice of operation management in McDonalds Company. The first section will provide an overview of McDonalds Company regarding its commercial practices as a retail chain in the global market. This will set the stage for the incisive evaluation of the companies operations. Secondly, the paper will briefly provide a background to McDonald’s operations management that will be significant in introducing the techniques employed by the global corporation regarding operation management. Accordingly, the report will then focus on the operation management techniques of McDonalds in a comprehensive way to bring out the essence of operation management as well as the relevant techniques employed. The recommendations section will be an opportunity for the writer to offer the suggestion on how McDonalds can improve its operations management basing on the report. Finally, the report will conclude by establishing the techniques of operation management applied by McDonalds as well as stating areas that need improvement. Detailed Study and Comparative Analysis Overview of McDonalds McDonald has a significantly noticeable brand image across the globe. The company has expanded and evolved into a popular food chain in the whole world. McDonald is a dynamic corporation that keeps increasing its operations around the globe through the entry into new markets. This has ensured that the company spreads to virtually all parts of the world. Incidentally, McDonalds is among the first countries that epitomize globalization in the sense that it has spread to several regions across the world and keeps discovering new markets. Furthermore, the operations of McDonald typify globalization because the company has a strategy of customizing its services to suit new markets. As a result, McDonalds has become a model of globalization in today’s competitive markets through its dynamism in operating new market environments. McDonald’s increasing recognition in fresh markets has placed the company in a growth mode for its market share as well as client purchasing power. Among the key contributors to the overall success of the McDonald company are the four crucial parameters namely; customer, learning, financial, and internal process. These parameters have developed over a lengthy period into a clearly established segment for the company, which has transformed into the most preferred banquet experience in the globe. The enormous success earned by MacDonald has become an epitome of effectiveness required in today’s globalized business environment. Business executives and administrators seeking to boost their production competence ought to emulate the distinctive strategy and approach of business taken by McDonalds. The company’s founder, Kroc, exemplified how to utilize complex process management to nearly all prosaic endeavors. In order to make it MacDonald ought to establish the primary basis of service delivered, demarcate labor into respective components and consistently regroup and streamline the relevant initiative up to the time when the structure works successfully. Just as an indication of the gigantic successes made by McDonald, today’s companies that are engaged in the food business benefit from the systems established by McDonalds which are a significant source of successes in the sense that they guarantee quality control, derive customer satisfaction as well as improve the flow of profit. The uniqueness of McDonald Company as regards business is its effective global strategy that has made it among the most primary business ventures to venture in the global market as well as a company with immense success in the international business. Foremost, McDonald symbolizes globalization because its operations have become the defining parameters of global business administration. It is along the initial companies to set shops in many nations around the globe in what has become the fast food craze. McDonald is undoubtedly a brand with global tastes surpassing tradition food business. Setting hop in different countries was traditionally perceived as impractical owing to the dynamics of trade which change from place to place. However, McDonald betrayed these perspectives and embarked on a successful globalization venture. Apart from being a global venture McDonalds is a successful international brand that has gradually become a model for international businesses. The success in managing eateries in Europe, America along with Asia which represents diverse market environments has become a case study in the business circles. How McDonald maintains its brand image in these distinct business locations denotes a successful, clear and concrete business philosophy that is founded on a succinct operations management model. Operations Management Techniques in McDonalds Quality management is a paramount activity at McDonalds through which the company guarantees the quality of its food products and services to its customers. Through quality management McDonald eateries practice efficiency in service provision by first taking care of the quality of the food served and also boosting the service quality to its customers. Maintenance is a viable operation management technique in McDonalds which involves the maintenance of the assets of the company which include personnel, workers like drivers, attendants and cooks; also other things like apparatus, machines, location among others. Maintenance perverse and conserves the things of the company making it possible for the company to continually be in a position to carry out its operations. Inventory management is an additional important process of any establishment. It involves selecting the best means of inventory management. While selecting the method of record control, the organisations ought to consider the likely demands of the creations. The foundation on which the organisations decide their processes of inventory management may vary but the common idea is to guarantee that the blend of inventory categories is able to convince customer requirements and deliver the necessary productivity and cash flows. At McDonalds inventory management is achieved on the consideration of First-In-First-Out foundation. This is for the reason that generally of the inventory incorporates perishable articles. For that reason, release of inventory occurs thrice or additional times a week basing on the trade of the restaurant. Moreover inventory is kept in freezer with appropriate wrapping so as to ensure brightness of the food items. All this operations occur under inventory management of the company. Process planning is a formidable operations management technique at McDonald which involves the development of the processes through which the product is made. McDonald usually involves in the production of food products and procedures for creating the food products are often established to ensure that the process takes place without any hindrance. This guarantees that the activities of the company are not hindered by process bottlenecks at any given time. Process planning in McDonalds takes the shape of mass production and factory preparation. The mass production procedures necessitate each eatery to establish a conveyance network to deliver food to each restaurant (Love, 2008). Warehouses keep gigantic quantities of all materials required by the restaurant which comprise of food, paper merchandises, utensils, and cleaning materials. The stockroom then transports the materials using the road network. Warehousing and circulation similar to the administration of the chain is integrated instead of being handled by individual restaurants. In essence, the circulation of the products and materials is the obligation of the conveyance company and not the chain. Applying this network has numerous merits; the company can manage its inventory under integrated module instead of leaving the task to the respective eateries. Additionally, McDonalds can buy the supplies for all the eateries in a single purchase instead of leaving the process to the eateries. This saves the restaurants the duty of seeking its own suppliers, which could be a gigantic task for them. The company can benefit from discounted prices for the supplies because of bulk buying thus saving a lot of funds that could be invented in other areas. The apparatus in the factory prepares the food at the same quantity at a time and the workers follow the established procedure of reheating, preparing and packaging the food (Royle, 2000). At the middle of the production of McDonald’s food products is an established procedure whereby all food is prepared at a central location preserved and sent to the respective eateries. Here, the bulk of the processes of expanding to customer requests as well as packaging is done. This is a unified process that makes the different services of the corporation in diverse locations across the world seem familiar. Therefore, there is no much difference in the food served in diverse restaurants since the food is prepared in an established procedure. Supply Chain management of McDonald often track the inventories of these eateries which include wrappers, cups, food, utensils and cleaning paraphernalia after which they make orders for the requirements of the restaurants from the conveyor which in turn delivers the materials (Waters, 2006). Other eateries have automated systems in which computers track the restaurants requirements before hand, the conveyance centre deliver the required items regularly without lingering for formal requests. Hence, McDonalds has a well established mechanism through which the delivery of the supplies is done in a manner that supports the business. Hence, the operations of the global company are not halted by supply delays or material bottlenecks rather the process request and delivery of the necessary materials and products are centralized making it convenient. This aids the smooth operation of McDonalds in two distinct ways; first is through the convenience granted to restaurants by centralizing the delivery of required supplies. This enables individual restaurants not to have the task of seeking suppliers for their requirement, which could slow the process making the company ineffective. Rather the restaurants only need to track their inventories and make requests to the main distributor. The role of the distributor is to ensure that every restaurant have all the needed materials to aid its operations without inconveniencing the processes. Therefore, restaurants are required to make order prior to the completion of their necessities. Where automated systems are in place, the distributor automatically knows what is required by respective restaurant and delivers on time. Subsequently, the centralization of the delivery system, which is placed on the shoulder of the distribution company, frees the main company the role of dealing with distribution activities (Aquilano et al, 2006). This makes it possible for doing the distribution process professionally guaranteeing effectiveness. The distribution company, which primarily focuses on distribution, operates twenty four hours to guarantee that all restaurants had the required materials in time for the necessary purposes. The main company, therefore, focuses on other aspects of the business like policy formulation, quality control and valuation. This makes McDonalds to be strategically placed to offer the best services to its clients. In overall, the operations management approach of McDonald can be summed up into two strategies namely; uniform production of food products and the centralization of the distribution system. These two make the vast of the entire operations management approach applied by the, global fast, food retailer. The uniformity of food production enables that the food found in different restaurants across the world is similar. This is because the food is centrally produced for distribution among the diverse locations in the world. Nevertheless, it is not an indication that the company does not customize its products. In essence, much of the tastes of food produced for supply in the distinct regional locations across the world consider regional factors like culture and tastes of people regarding food. Thus, the food is produced depending on the taste of the people in the respective location. However, the basic production and general qualities of the food produced remains the same making McDonald a recognized global trademark. This is among factors that contribute to the success of McDonalds across the world. The centralization of the distribution system is credible development in the operations of McDonalds because it professionalizes the delivery of supplies and overall inventory management of the restaurants. This is because the distribution company, which is a separate entity from the McDonald Corporation, solely focuses on the distribution of the required materials to the eateries. This eases pressure from the main company and guarantees the timely delivery of the required material in the restaurants. The automation of inventory management is another strong pillar in the overall operation management of the McDonald Company that ensures that suppliers reach the restaurants in time. The appearance of McDonald eateries often presents a look of avenues of collecting food from the counter. Once a customer gets into the eatery the arrangement signifies a place of making orders and receiving them after a brief wait. Hence, once an order has been made the package is presented personally enclosed in a bag or placed on a tray, the food can be eaten at the convenience of the customer. Similarly, the food served is not uncommonly costly and is affordable to a certain degree. The physical conditions of the restaurants are the same in different regions, and the menu relayed in the eateries is relatively similar even in different countries. Different locations may have diverse dishes and separate nations may also have distinct cuisines and recipes, which are in line with their respective culture. However, in general food from McDonalds chains across the world tend to be similar. This is contributed by different reasons, which may include the fact that the food processed in McDonald’s eateries is prepared in a factory then preserved only to be reheated when the customer requires. The food is fully prepared in the factories where it is laced with flavors and other additives, which make it take the same product. Recommendations In line with McDonalds endeavor to provide the best services for its customers and also basing on the report regarding the operations management techniques of McDonald, the following recommendations are made to the company to improve its service profile among the customers. The recommendations are as follows; McDonald Corporation should consider automating inventory management of all the eateries so as to speed the process of receiving supplies from the distribution channel. This will enable the main distributor to make rapid and timely distribution of materials without formal request, which may take long. Currently, only a few restaurants across the world have automated inventory management system. This requires them to track the inventory to determine when the order for more supplies is to be placed. The corporation should customize food production to reflect the diverse locations of its eateries. The company operates in numerous countries around the world but still uses uniform food production mode. In as much as the uniform mode is crucial for the branding of McDonald, it does not reflect the diverse nature of the respective regions in which it operates. This should be adjusted to afford for the food needs and tastes of different people in the regions. McDonalds should decentralize the distribution system, the centralization of the distribution system is not suitable for the outlook of the company because there is a need to diversify and decentralize the distribution system to allow respective restaurants to develop their own supply networks and make unique food products that reflect their areas of operations. This will ensure that McDonald food products are produced in line with the needs of different areas as reflected in the decentralized method of distributing materials. McDonalds should expand to other regions in the world like Africa so as to cater for the food needs of the entire globe. The massive successes recorded in the company’s operations, in Asia, Europe, and America should be used as a gauge in entering new markets especially in Africa. McDonald Company ought to consider designing its restaurants uniformly whereby the physical structure and appearance of the company is similar. This will boost the brand image of the company as well as compensate for the decentralization of the distribution system. McDonald should consider setting up training camps in countries where it operates to provide training to chefs and customer service attendants of eateries. This will boost the professional flavor of the company through quality food production and customer service. The trainees will also receive instructions on basics of food management and overall operations management of the company. Apart from improving the quality of its operations such a move will provide the company with a pool of skills which could be used in rolling new operations. Training will improve the branding of McDonald eateries and position the attendants on better posture to boost the operations of the global entity. McDonalds Company ought to introduce other food products on its line of fast-foods in order to attract more customers particularly those with different tastes. The success of the McDonald brand is a clear illustration of the acceptability the company has all over the world. However, the restricted menu of McDonalds is a hindrance to its commercial viability as well as the exclusion of other customers. Perhaps the company should conduct research on new food products that could perform well in the market. Such an endeavor will be successful in delivering the goods through increased profit and coverage. In fact the new food products could be crucial factors towards the expansion of McDonalds into other countries. Conclusion In conclusion, McDonalds Corporation has well established operations management techniques that comprise of numerous strategies that can be termed as the secret behind its success in global retail business. As a result, the company is successful in venturing in various markets and thus a model for globalization. The above report summarizes the findings of a survey regarding the operation management of McDonald. The writer thus concludes that the company remains a leading force in the global retail market. McDonalds is also a strong inspiration to other business entities that endeavor to achieve effectiveness. In spite of all these, the writer strongly believes that the proposals presented ought to be taken seriously. McDonalds has several techniques of operations management through which it ensures that its activities are completed on time and that it succeeds in the provision of quality food products ad services to its global customers. Among the company’s operation management techniques include; quality management, process planning, maintenance, inventory management, delivery system, mass production, and supply chain management. References Aquilano et al. (2006). Operations Management for Competitive Advantage, Volume 2006, Part 2. New York: McGraw-Hill/Irwin. Love, J. (2008). Mcdonald's: Behind the Arches. Washington: Paw Prints. Render, B., & Heizer, J. (2005). Operations Management. Washington: Pearson/Prentice Hall. Royle, T. (2000). Working for McDonald's in Europe: The Unequal Struggle. New York: Routledge. Verma, R., & Boyer, K. (2009). Operations and Supply Chain Management for the 21st Century. Washington: Cengage Learning. Waters, D. (2006). Operations Strategy. Washington: Cengage Learning EMEA. Welch et al. (2007). Foreign Operation Methods: Theory, Analysis, Strategy. Washington: Edward Elgar Publishing. Read More