McDonalds Supply Chain Management System - Case Study Example

DRAFT SUPPLY CHAIN MANAGEMENT Introduction The McDonald’s chain of supply can only be deemed as a sophisticated one entailing a network of both direct and indirect suppliers; the company controls the supply chain by incorporating with its suppliers who have similar values and vision about sustainable supply. The company is able to attain this through making clear their standards for eminence, security and competence which is extended to the suppliers. Generally, the McDonald’s are best known for their strong relationship with suppliers especially when it comes to focusing on their three predestined areas i.e. ethics, environment and economics (Kate 2012). Among other foods like French fries and fish fillet, McDonald’s is best known for its Big Mac which is considered by most people to be the best of all. Furthermore, the surprising thing about the Big Mac is that it’s said to taste the same in all the branches of the McDonalds (Sonali 2013). Despite other common factors such as the mode of preparation the core reason behind this is McDonald’s collaborative and innovative supply chain system that has been in place for the 60 years that the company has been there. Excellent and Competing Companies Supply Chains Name of the Company Product/ Services Sales Revenue Employees Ranking Criteria Apple Enterprises, cultivates and vends electronics, software and computer products Offers online services Popularly known for the Mac products Estimated 183 Billion dollars per year 73,000 (Permanent) 3,500 (Temporary) Second largest information technology company with over 400 stores in multiple countries and the world’s largest music retailer McDonalds Hamburgers and fast food retailers Barbecue restaurants Estimation of over 28 Billion dollars per year 450, 000 in all branches Serves over 65 million consumers a day On top sales, the company also gets revenues from rent, royalties and fees paid by franchisees World’s largest chain of fast food restaurants Amazon Electronic commerce corporation Has app stores, music stores, book depositories, Kindle, Twitch among others Online shopping, web hosting and content distribution services Estimated 89 Billion Dollars per year N/A Biggest online retailer in the United States Manages separate websites in over ten countries i.e. France, China, India, Brazil etc. Gives shipping services to consumers in certain states for their websites Unilever Multinational supplier of products such as food, beverages, personal care products and cleaning agents Estimated 50 Billion Dollars per year Over 175,000 employees Ranked third among the world’s largest consumer goods retailers Founded over 80 years ago and still dominates the United Kingdom and Netherlands markets Intel Manufacturers of Bluetooth chipsets, mobile phones, microprocessors, motherboard chipsets and network interface cards Estimated 53 Billion Dollars per year Over 108,000 employees World’s largest chipmaker company World’s highest valued company in terms of revenue One of the world’s leading brands Supplies microchips and microprocessors to most of the leading computer and mobile phone manufacturers MCDONALD’S SUPPLY CHAIN DESIGN (HAMBURGERS) Most of the branches are in partnership with McDonald’s Australia from which they benefit gravely, typically because this is where they source their products in a responsible and ethical manner contributing to the development of sustainable agriculture and food manufacturing processes. The overall McDonald’s company is committed to supporting Australian producers and manufacturers, which is their key source of produce; moreover, most of their food and packaging needs are processed in Australia. In this case, for the production of the Big Mac McDonald’s acquires more than 360 million hamburger buns and 26.2 kilos of beef; most of which is supplied to the different branches (Sonali 2013). Considerably, it is evident that the key facilitator of Big Mac’s esteem is the fact that they are all made from produce got from a central source, which among other different factors helps the company achieve a lot including; attracting more customers, being a step ahead in the competitive market and fortifying the supply chain. Significantly, warehousing/ distribution centers play significant roles in corporations’ supply chains providing different values through the varying activities. Moreover, various techniques apply in the measuring performance and meeting the necessary requirements for these services to be efficient in the supply chains. Most of the services offered by warehouses and distribution centers aim at adding value especially to customers, but courtesy of the company; in fact, some of the warehouses act as departments for the organizations (Keller 1). Relatively, the core functions entail transporting of goods, fulfilling orders, packaging, labeling, cross docking and other significant services that involve making sure that orders go through the full cycle. Decisively, warehouses and distribution center’s main focus is on customer’s needs and services through the implementation of the techniques that ensure the products are in their best condition observing aspects such as cost and efficiency. Currently, there are warehouse systems operational on the World Wide Web with the multiple advancements in technology; nonetheless, even customary warehouses and distribution centers embrace technology in meeting the objective and performing their roles (Keller 1). Appreciably, technology makes it easier for warehouse to process orders, manage transportation and even use the varying management information systems in scanning bar codes, plan loads among other activities. Definitely, warehouses and distribution centers’ activities base on relationships with the main link being between suppliers and consumers hence the management in these sectors must understand customers’ needs and the most efficient methods of operations. Warehousing and distribution centers’ are among the core areas that continue to advance in supply chain management and as a matter of effectiveness performance measures apply in determining productivity. Due to competition and meeting customers’ needs, the products must be in the right place, at the right time and in the right condition for a warehouse to uphold efficiency hence measuring performance entails the achievement and sustainability of these goals. Essentially, most warehouses and distribution centers use units and lines in the measurement of productivity by calculating the number of units or lines collected per hour in day. However, this does not entirely meet the standards of efficiency so other methods apply in measuring usable space by observing facets such as storage utility (Keller 1). Under the factor of accuracy, warehouse and distribution centers have varying measures and determinants; however, the most common include location and record accuracy depending on the items and orders picked correctly. Damages also apply in the measurement of accuracy of both orders and items collected and received by the clients. Finally, another measure of service and efficiency is calculating the cycle time that is all about establishing the amount of time it takes to make an item available upon receiving an order. McDonalds is able to collectively incorporate their Just-in-time processes mainly because they believe in working with all their suppliers to help them in providing a long term supply of quality food and packaging through processes that uphold minimal environmental impact (Kate 2012). The efficiency of the company in meeting demands is made possible by their ability to recognize every important aspect related to their business, not ignoring even factors that may seem less significant like a customer’s criticism per say on the Big Mac that is loved by many. Significantly, different metrics apply in the measurement of performance in warehouses and distribution centers depending on the management and orientation of the various companies and their markets. Nonetheless, the main purpose of the metrics is reducing expenses and augmenting the services quality. The basic principles of implementing the right metrics entail evaluating their obligation in a corporation, their operation’s assessment levels and their compatibility relative to the location. Metrics are advantageous for warehouses and distribution centers because they reduce costs and enhance efficiency in the different processes such as purchases, managing inventory and orders among others. Concurrently, companies such as Wal-Mart and Target warehouses and distribution centers, based in the United States implement a number of similar metrics that associate in the various activity trails. Some of these common metrics include: Day Sale Outstanding - used to determine the total picking period from the point of receiving the invoice to acquiring the cash receipt Lead time- calculates the time between receiving the order and delivering the product Other forms of metrics include gross margin, supplier on time, receiving accuracy, demand forecast accuracy, total cost of procurement among others Responsiveness to alterations in the market by McDonalds is enhanced by different factors i.e. using a scorecard to measure supplier environmental performance for water, waste and air quality in relation to how they manufacture their products, and then compare the result with other companys’; additionally, most of their suppliers participate in the same (Kate 2012). The company, together with its suppliers, has also made paramount developments to how they run things being acknowledged for the same internationally but mainly in Australia. As a leader in their line of businesses, McDonald’s have worked had to facilitate stakeholder engagement, address global animal health and welfare opportunities in their supply chain; this has boosted their risk-hedging ability to foresee and alleviate challenges. The supply chain of the McDonalds Company has been comprehensively effective; for instance, their palm oil suppliers attained the objective of becoming members of Roundtable on Sustainable Palm Oil; nonetheless, the company has made more other achievements (Sonali 2013). Read More