McDonalds: Supply Chain Management

TABLE OF CONTENTS
ntroduction.01

It starts with01

Some important facts02

Indian markets02

Supply chain is...03

Supply chain in mc donalds india04

Mc donalds distribution centre.04

Concepts of cold chain..05

Steps involved in cold chain concept..06

List of suppliers and how cold chain concept works.07

Different items are sourced from.09

Three logistical drivers..10

Three cross functional drivers..10

Pull/push process11

Supply chain process.12

In lucknow we are at...13

Page 3 of 17

INTRODUCTIONMcDONALDS IS .
McDonalds is a name which is today synonymous with the fast food.
McDonald'sis a fast food chain with restaurants all over the world with
headquarters in oakbrooks, Illinois, US. It serves burgers and other fast food
customized to localtastes. Its philosophy has been 'one world, one burger;' which
meant that theburger ated supply chain, calledthe 'Cold Chain'.
IT STARTS WITH.

In 1954, Ray Kroc, 52, distributor of milk shake maker- multimixer, went tosee
Mcdonalds brothers hamburger stall in California.

With an opportunity, he thought to open several of such restaurants so asto sell his
multimixer milk shake machine.
Page 4 of 17

T STARTS WITH.

In 1954, Ray Kroc, 52, distributor of milk shake maker- multimixer, went tosee
Mcdonalds brothers hamburger stall in California.


With an opportunity, he thought to open several of such restaurants so asto sell his
multimixer milk shake machine.
SOME IMPORTANT FACTS

In year 2004, mcdonalds was the largest marketer of fast food in theworld.

31000+ restaurants.

47 million customers served daily.

1999- 8
th
most valueable brand.

2000- ranked amoung top 100 firms in the world.

INDIAN MARKET

Its a huge sub-continent.

India is 4 times more populated than the US.

India has 300 million strong middle class people.

India is one of the largest economy.

Incorporated in 1993, MIPL is Mcdonalds indias wholly ownedsubsidery.

In India, Mcdonalds open its first restaurant in vasant vihar, South Delhi.

50:50
joint venture
with-(1) North- Connaught plaza restaurants( owned by Mr. Vikram
Bakshi)and(2) West- Hardcastle restaurants ( owned by Mr. Amit Jatia).World

map showing the presence of McDonalds and the year when itstarted. In India it
started in year 1996.
Page 5 of 17

McDonalds: Supply Chain Management

vegetables to 2C within 90 minutes. Then a large cold room (a refrigerated
van)was used for transportation to the distribution centers. In the van,
thetemperature and relative humidity of crop was maintained at 1-4C and
95per cent, respectively and the flavors and freshness are lockedAt the suppliers'

level, care was taken to guard against any possiblecontamination or interruption in

the cold chain that can break the link and have adetrimental effect on the quality of
our product.The iceberg lettuce from Ooty, mutton patties from Hyderabad and
sesame seedbuns from Punjab were all delivered to Radhakrishna Foodland
Private Limited(RFPL) distribution centre (cold storage) in its refrigerated vans.
RFPL stored theproducts in controlled conditions in Mumbai and New Delhi and
supplied them toMcDonald's outlets on a daily basis.By transporting the semifinished products at a particular temperature, the coldchain ensured freshness and
adequate moisture content of the food. Thespecially designed trucks maintained
the temperature in the storage chamber throughout the journey. Drivers were
instructed specifically not to switch off thechilling system to save electricity, even
in the event of traffic jam.
LIST OF SUPPLIERS AND THE DISCRIPTION SHOWING
HOWCOLD CHIN CONCEPT WORKS AND CONTRIBUTE
TOWARDSEFFICIENCY.

Dynamix dairy industry (cheese)

Trikaya agriculture (iceburg lettuce)

Vista processed food pvt ltd. (chicken and veg range of products)
Page 9 of 17

McDonalds: Supply Chain Management

TRIKAYA AGRICULTURE (SUPPLYING ICEBURG LETTUCE

Advanced agricultural practices helps them to grow speciality crops likelettuce
and herbs.

Pre cooling room and large cold room for post harvest.

Refrigerated transportation.

VISTA PROCESSED FOOD PVT. LTD. (FOR SUPPLYING

FROZENCHICKEN AND VEG PRODUCTS)

For chicken, temperature maintained is -35 degrees Celsius.

Refrigerated transportation.
RADHA KRISHNA FOODLAND (DISTRIBUTION CENTRE)

Specialized in handling large volumes.

Activities involved are procurement, quality inspection, storage,

inventorymanagement, deliveries, data collection, recording and reporting.

One stop shop for all distribution management services.

Both dry and cold storage facility.

AMRIT FOODS

An ISO 9000 firm

Supplies long life UHT milk/ milk products for desserts.

DIFFERENT ITEMS ARE SOURCED
FROM DIFEERENTGEOGRAPHY IN INDIA..
Page 11 of 17

Facilities- they are the actual physical location in the supply chain networkwhere
the product is stored, assembled, or fabricated. The two mainfacilities are
production sites and the storage sites.In McDonalds, because the products are
perishable, storage time wasminimal so as to reduce the wastage.
2.
Transportation- it is the process where the inventory is moving from placeto place.
Refrigerated vans are used here in this case.3.Inventory- it includes
raw materials, work in progress, and finished goodswithin a supply chain.
THREE CROSS-FUNCTIONAL DRIVERS

1.
sourcing- who will perform which activity( production, storage,transportation, and
distribution) in a supply chain.This activity was taken care by mcdonalds
corporation.
2.
information- it includes data and analysis related to facilities,
inventory,transportation, cost, prices and customers in the whole supply
chain.This activity was done by Radhakrishana food land that acts as
their distribution centre.
3.
pricing- how much a firm could charge for a particular goods and servicesthat it
makes available in the supply chain.Here it was done by the mcdonalds only.
PULL/PUSH PROCESS
Page 13 of 17
THREE CROSS-FUNCTIONAL DRIVERS
1.
sourcing- who will perform which activity( production, storage,transportation, and
distribution) in a supply chain.This activity was taken care by mcdonalds
corporation.
2.
information- it includes data and analysis related to facilities,
inventory,transportation, cost, prices and customers in the whole supply
chain.This activity was done by Radhakrishana food land that acts as
their distribution centre.
3.
pricing- how much a firm could charge for a particular goods and servicesthat it
makes available in the supply chain.Here it was done by the mcdonalds only.
PULL/PUSH PROCESS
Page 13 of 17

McDonalds: Supply Chain Management

Pull processes are initiated by a customer order while the push processes
areinitiated by the anticipation of customer order.Mcdonalds use both pull as well
as push process, to a certain extent push iscreated and after that level the pull
created by the firm did its task. One importantquestion can be asked to what level
that push can be applied.The products willbe pushed to the restaurants where the
customers automatically demand thatproduct and hence a pull is created.Fig.

showing the boundry of pull and push, push last till the product reaches
therestaurant and pull starts when a customer orders the product.
SUPPLY CHAIN PROCESS CYCLE..
The processes in the supply chain are divided into a series of cycles,
eachperformed at the interface between 2 successive stages of supply chain
Page 14 of 17
Various Suppliers supplies the materialsProducts delivered to Distribution
centresProducts delivered to restaurantCustomer order at restaurant,Push stops
,pull starts here

McDonalds: Supply Chain Management

Page 15 of 17
customersRetailer/ McDonalds restaurantsdistributor suppliersCustomer order
cycleReplenishment cycleProcurement cycle

Activity (218)
FILTERS

PULL/PUSH
PROCESSPull
processes are
initiated by a
customer order
while the push
processes

areinitiated by
the anticipation
of customer
order.Mcdonalds
use both pull as
well as push
process, to a

certain extent
push iscreated
and after that
level the pull
created by the
firm did its task.
One

importantquestio
n can be asked
to what level that
push can be
applied.The
products willbe
pushed to the

restaurants
where the
customers
automatically
demand
thatproduct and
hence a pull is

created.Fig.
showing the
boundry of pull
and push, push
last till the
product reaches
therestaurant

and pull starts

when a
customer orders
the product.

SUPPLY
CHAIN

PROCESS
CYCLE..
The processes
in the supply
chain are divided
into a series of
cycles,
eachperformed

at the interface
between 2
successive
stages of supply
chain
Page 14 of 17
Various
Suppliers

supplies the
materialsProduct
s delivered to
Distribution
centresProducts
delivered to
restaurantCusto
mer order at

restaurant,Push
stops ,pull starts
here