MCDONALDS

Supply Chain at McDonalds

Supply Chain at McDonalds

Task 1

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From:

Subject: Approach to Materials Management

Introduction

McDonalds is one of the largest fast food restaurants in the world and has been continuously expanding. The restaurant ensures the same taste and quality of food throughout the world. Secondly, due to the number of customers it deals with each hour, it has to be assured that its supply never runs short. A typical McDrive in Europe handles about 120 cars per hour at rush time (McDonalds Restaurant, n.d.). Running short of supplies during this tie could lead to customer dissatisfaction and hence a reduction in brand value. The speed of the delivery leaves virtually no time to reorder a product if they run out of stock (Shah, 2009, 45-96).

Each day, around a hundred million items are sold; thus, the stocks at hand should be such that it never runs out before the delivery of the next batch. This is important in order to ensure that the customers get what they need.

Approach to Materials Management

McDonalds opened its first restaurant in the UK in 1974 and since then they have opened over 1200 restaurants all over the country. The market in which they operate is very competitive and in order to maintain its competitive advantage, it has to procure the finest quality of ingredients for each of its restaurants. In order to manage such a huge task, the ingredients are provided by certain suppliers (Leeman, 2010, 21-29).

The supply of materials for McDonalds is 100 percent outsourced. Even the patties are outsourced to a company that operates two plants that are dedicated to supplying all the patties to McDonalds. This ensures that the same quality and taste is available in every restaurant.

Material Management

The materials McDonald's purchases from its suppliers are of the highest quality. In order to ensure that they are supplied exactly what they desire; the company has developed a collaborative approach with its suppliers and continuously provides them information so that they may improve the quality of the products being offered. This collaboration helps farmers to provide the best beef and vegetables to the restaurant thus increasing their value (Green, 2013).

Each beef patty supplied to McDonalds UK is provided by Esca Food Solutions. It currently has two plants that collective produce enough patties to supply every McDonalds restaurant in the UK. These plants are located in Scunthorpe and Milton Keynes and consume around 8000 cattle on a daily basis. This figure alone tells about the size of the material management (McDonalds Restaurant, n.d.).

The Use of Information Technology

A crisis emerged in 1996 between Esca and McDonalds after which the product integrity and traceability became an important issue (McDonalds Restaurant, n.d.). In order to resolve this issue and prevent them from emerging again, a policy of information transparency and sharing was implemented that made it possible to work as a team throughout the chain. This resulted in a better management of the supplies and ensuring that supplies never run out. The quality of the material being supplied was also ...