Analysis of Supply Chain Management Burger King- Burjuman - Case Study Example

Name : xxxxxx Tutor : xxxxxxx Title : Analysis of Supply Chain Management Institution : xxxxxxx @2010 Burger King- Burjuman Synopsis of the Company Profile Burger King – Burjuman which is usually abbreviated simply as BK – B is a world class chain of fast food (hamburger) restaurant with its headquarter in Dubai, United Arab Emirate (UAE). The company during its inception in the market in 1953 was operated by Matthew Burns and Keith Kramer as a franchise chain restaurant and was based in Burjuman Centre (Berman 2003). In the mid 2009, BK – B was ranked 65 among its competitors in the food restaurant industry and boasted of operating over 12 000 restaurants in well over 12 states within UAE and in over 74 other countries. With its franchised operations and corporate ownership of companies, BK – B employs over 400 000 persons worldwide making it rub shoulders in competition with such power houses as McDonald’s, Subway and Yum Brands (KFC, A&W, Pizza Hut, Taco Bell and Long John Silver) among others (Daniels, Radebaugh & Sullivan 2011). In the industry of fast food hamburger, BK – B is only second in market prominence to McDonald’s since Yum Brands does not have hamburger units. There are plans for BK – B to increase its number of net operations to at least three to four percent annually and this increase is intended to be seen mostly in its international operations (Daniels, Radebaugh & Sullivan 2011). This paper is a study of Burger King Burjuman with special interest in the organization’s supply chain management where its supply chain for its products and services will be identified for which a topical supply chain issue within the company will be analyzed. Supply Chain Situation Analysis Burger King Burjuman’s value chain has been configured and coordinated by the detailed distribution channel that is highly differentiated that has been devised and used by the management in the running of the corporation. From study, it can also be seen that five specifications are the ones that create most value for the company and this value chain is embedded in its five-point strategy which incorporates these areas of interest which are (Daniels, Radebaugh & Sullivan 2011): Before establishing restaurants, ensure that there are proper infrastructure Establish a local management team to cater for the new restaurant to be planted Focus development strategies towards major cities and adjacent geographies with established shopping mall location. This means for instance that only Brazil’s largest cities are preferred rather than the entire country Develop a local office for operations Use local suppliers that meet its global specifications within their locality. Fig. 1: Flow Chart of Burger King Burjuman Supply Chain This flow chart is a Supply Chain flow chart for Burger King – Burjuman showing all the constituents of its supply chain. It also shows which areas of business the company operates in for the production of its products of merchandise. 1. Sales Department: its work is to identify the need for the different products that BK – B trades in. Their sentiments are shared with the Marketing department to ensure effective and relevant response in the entire propagation of the products traded in by the company. 2. The Marketing Department: its work to do extensive marketing for the company’s merchandise as well as support projects and complete any research into the market trends that may be relevant for the continued prosperity of the company’s product in the market. 3. Information and research findings that are relevant for the company’s supply chain is extensively done by the analysts and sent back to the marketing department which uses to make necessary changes in the business marketing and supply chain plan. 4. Business Unit Management: its work is to coalesce all the information obtained from the researchers and consolidate it into an executable format. This information is forwarded to the unit for consideration and application. 5. Business Unit Management: the unit also comprises of senior manages and business directors that are responsible of all the decisions made concerning the project and overall supply chain used by the company. 6. Once the plan is approved, the supply chain plan is passed back to the company analysts who are then obligated to use the information to prepare an implementation plan that will be used by the entire company. 7. Given that the company is involved in fast foods, there are many materials that are used as raw materials for the production of the company’s products. These materials are passed to the purchasing department which does the purchases. 8. Purchasing Department: its work is to coordinate with the logistics and transport departments to organize for the purchasing and delivery of the materials that have been asked for. 9. Suppliers: these receive orders from the purchasing department, prepare vouchers and organize for their dispatch through the transport department to meet agreed dates and timelines. 10. Transport Department: its work in addition to catering for all the transport issues in the company approves the specific transport preference that is used in the dispatch of products ordered by the purchasing department from the suppliers. 11. Manufacturing/ Assembly Department: Here is where the products are received and preparation of the products for merchandise starts. 12. Warehouse: the products that have been produced and after the necessary preservation techniques have been applied to them (since most food products are very perishable) are moved to the warehouse for storage and it is here that they are ferried to other retailers, malls, outlets throughout the supply chain. 13. IT Department: The products that have been finished and packaged after preservation are then ready for shipment and for use by BK – B outlets. They are put in the inventory awaiting orders where the company computer system is updated accordingly to contain the relevant information regarding the orders present and the stock available at the warehouse. 14. Customer Service: here is where orders are placed for customers that want products in large quantities. Most of these customers are owners of distribution chains for BK – B in other Emirates. 15. These orders are computerized so that it is easy as well as convenient to use them. The customer service department after taking the orders has them computerized in the company’s computer system for ease of tracking of these orders and to minimize human error in the dispatches. 16. The other vital role of the IT department is to have a centralized computer system that is used to maintain records of transaction and provide the visibility of the products for sale as well. 17. When the orders made have been completed and entered in the company’s computer system, a pick list is sent to the warehouse for the organization of how the products can be sent to the retailers and other distributors. 18. Export Department: this receives order lists and deliveries that are to be exported to other countries and organizes for the shipment 19. Export Department also manages all the details of the dispatch and this involves preparation and production of all the relevant export documents that are relevant. 20. These prepared documents are sent to the warehouse where they are coupled with the relevant products that are awaiting dispatch. 21. The warehouse dispatches the orders that have been completed and cleared by the Export Department. 22. The transport department organizes with the company that is to do the shipment and organizes for the dispatch of the products to the countries of their destination. The transportation and delivery of the consignment is done in accordance with the INCO terms of carriage as required by the company constitution. 23. After the stock has been exhausted, the IT Department prepares a request for additional stock where the computer generates a request for additional stock. 24. The Re-Order Process: its work is to generate a request asking the Purchasing Department to place new orders from the suppliers for the chain to begin again. The rampant expansion by BK – B into other markets, a strategy that has been used by the company more than any of its competitors is advantageous as well as disadvantageous. In the same breath, entry into new markets by foreign companies like BK equally has advantages and disadvantages. The advantage of this expansion and the supply chain used by the company has been the increase in the company’s revenue collection, creation of employment opportunities giving it a comparative advantage and increasing its market share percentage. Entry into foreign markets by BK – B has further been able to increase its market share that has been dependent on the populations of these countries. On the other hand, these expansion and entry into foreign markets has created some disadvantages for BK such as: receiving stringent competition from local companies who already have the heart of regional and local suppliers; local companies have borrowed from foreign company’s success and bettered their menus to appeal to local tastes; and foreign companies have been suscepted to harsh national laws and stipends that foreign companies are obligated to honour from time to time before they are accepted in these foreign markets making it difficult for foreign companies like BK to freely operate in these foreign markets (Berman 2003). Identification of Main Issue and Problem About two-thirds of BK’s restaurants are in the UAE region and only a third of them are elsewhere. It would be in the interest of the company to change this state of affairs since it limits the companies opportunities of expansion and puts the company at a higher risk of economic trauma should the regional economic trends dip in the negative (Berman, 2003). One of the ways of approach to achieve this is to continue with the expansion strategy that the company has employed to ensure that it diversifies its market prominence into other foreign markets. This will thus call on the significant adjustment on the company’s supply chain strategies. Within a single concentration in one market, BK – B faces the problem of strong competition which strains its capacity of production and expansion. The Risk Management Tactics that has been instrumental in responding to this challenge has been Global Optimization where the company has strategically started venturing into other markets to increase its global market share. In so doing, BK – B prefers to enter countries that are populous with younger generations and with more shopping centers which is advantageous given the kinds of products that the company trades in; fast food hamburgers are preferred by younger generations much more than any other age groups (Reiter 1996). General Evaluation and Alternative Solutions The evaluation of the supply value chain used by BK – B is to a large extent very effective and responsive to forces of the market. It has great avenues of expansion that are embedded in the company’s culture and philosophy of providing affordable foods that are nutritionally healthy and environmentally conscious. The tools and strategies to watch when deciding on future possible locations for the company’s expansion in accordance to supply chain strategy for global optimization include ensuring that there is adequate market research that is done on the market in which the company intends to join in, assessing the target market which should mostly consists of the younger generation (below 35 years) and the locations should be preferably populated areas of target countries to increase on the maximum revenue worth that can be attained from such expansion (Reiter 1996). The challenges identified in this case study have great implications for Burger King Burjuman since they are instrumental in the proper planning and strategizing for its expansion strategy. The challenge of competition in foreign markets, differentiation of fast food products, management structures for supply chain and strategy are the very tenets that Burger King Burjuman has to keenly consider in order to ensure that its entry into these foreign markets is effective, flawless, strategic and worth the investment cost. References Berman, P 2003, ‘Burger King's Flame-Broiled Future’, Forbes Magazine, vol.3 no. 1, pp.25-28. Daniels, J, Radebaugh, L, & Sullivan, D 2011, International Business (13th ed), Prentice Hall. Upper Saddle River, NJ. Reiter, E 1996, Making Fast Food: From the Frying Pan Into the Fryer (2nd ed), McGill-Queen's University Press, Buffalo. Read More