mcdonald - os project

8/2/2019 McDonald - OS Project

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The McDonalds System the WorldsBest QSR experience

World Market Leader in the QSR area (Quick ServiceRestaurant)

Franchise System (75%) System employees: 1.5 million

Customers Per Day: 58 million Corporate Strategy:

QSC&V: Quality, Service, Cleanliness and Value Ray Kroc: None of us is as good as all of us Plan To Win -> Successful business revitalization Growth by getting better


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Strategy

Definition of Strategy

Strategy is a deliberate search for a planof action that will develop a business's

distinctive competence and compound it.

Definition of Operations Strategy

An operations strategy consists of asequence of decisions that, over time,enables a business unit to achieve a

desired operations structure,infrastructure and set of s ecific


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Order Qualifiers And OrderWinners

Order Qualifiers are characteristics thatconsumers perceive as minimum standardsof acceptability to be considered as a

potential for purchase .Companies needonly be as good as competitor

Order Winnersare characteristics of anorganizations good or services that cause itto be perceived as better than thecompetition. Companies need to be betterthan the competition


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Criteria for evaluating anOperations StrategyConsistency (Internal and External)

Between the operations strategy and theoverall business strategy

Between the operation strategy and theother functional strategies within thebusiness

Among the decision categories that makeup the operations strategy

Between the operation strategy and thebusiness environment.

i i f l i


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Criteria for evaluating anOperations Strategy (Cont

)Contribution (to competitive advantage) Making trade-offs explicit, enabling

operations to set priorities that enhance the

competitive advantage Directing attention to opportunities that

complement the business strategy

Promoting clarity regarding the operationsstrategy throughout the business unit so itspotential can be fully realized

Providing the operations capabilities that

will be required by the business in the


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Statement of McDonaldsOperations StrategyTo provide unmatched consistency in operations in supportof high product quality. This must be accomplished withadequate speed, low cost, and process innovation toaccommodate changes in consumer tastes.

QSC&V

Quality-Using the high quality material

Service-Quickly, kind and correct service

Cleanliness Always keep cleaning

Value-High quality and satisfaction

From the statement of McDonalds operations strategy, it is


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Dimension

Strategy

Capacity Growth as needed through additional stores but capacity added carefully Well utilized franchisees well beingdepends on it being used heavily

Facilities Distributed facilities, each facility being verysimilar to the next , all focused around the

same menu- although the uniformity isbeginning to change.

ProcessTechnolo

gy

High degree of process understanding, emphasis on "fool-proof" processes A leader in the technology of fast-food delivery

VerticalIntegration

Partnership arrangement Long-term relationship with suppliers to promote innovationand quality improvement

Workforce Franchisees: well-trained, carefully selected, entrepreneurs Operators: high-turnover, cheap

Organizatio Guidelines provided by corporation, but franchisees push to


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Workforce

Hamburger University has become the companys globalcenter of excellence for McDonalds operations training andleadership development.

The first restaurant company to develop a global trainingcenterThe only active QSR currently to receive college creditrecommendations from the American Council on Education(ACE), the United States oldest and most recognizedunifying body for higher education

Continually recognized for excellence in training

February 24, 1961, Hamburger University's first class of15 students graduated

Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators have graduated from thisfacility


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Capacity & Facility

McDonald's does business in 119 countries around the world.

Approximately 15% of McDonald's restaurants are owned and operatedby McDonald's Corporation directly.

The remainder are operated by others through a variety of franchise

agreements and joint ventures.

Business model

Franchise fees

Marketing fees, which are calculated as a percentage of sales,

McDonald's may also collect rent

As a condition of many franchise agreements, which vary by contract,age, country, and location, the Corporation may own or lease theproperties on which McDonald's franchises are located. In most, if notall cases, the franchisee does not own the location of its restaurants

As a matter of policy, McDonald's does not make direct sales of food or


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Process Technology

Process-based capabilities are derivedfrom activities that transform material orinformation and tend to provide

advantages along such standardcompetitive dimensions as low cost andhigh quality.

McDonaldss meticulously researchedand documented procedures forproducing fast food have been its primary

defense against hordes of imitators .


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Process Technology( Contd .)

McDonalds thrives on some core fundamentals

Standardization a Big Mac is a Big Mac go into anyrestaurant across world and youll get these same result everytime coupled with a fastidious approach to quality

A production process approach different work cellscombining to make the finished product

Just in Time production make whats needed smallnumbers of ready finished product

Flexible and multi skilled workforce

Lean production face it the backroom kitchen of aMcDonalds is not massive the have one to town on


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Process Technology( Contd .)

One way to reduce the uncertainty ofservice delivery is to use technology todevelop a production-line approach toservices - Theodore Levitt

Buzzers and lights are used to signalcooking time for frying perfect French

fries.

The size of the French fryer is designed toproduce the correct amount of fries.

The French fry scoop is the perfect size to


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Made To Stock


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Vertical Integration

Local Sourcing & Partnership

Trikaya Agriculture Supplier of Iceberg Lettuce

McDonald's provided assistance in the selection of highquality seeds,

Exposed the farms to advanced drip-irrigationtechnology .

Helped develop a refrigerated transportation system

Trikaya Agriculture Export to Middle East and Asia Pacificoperations, Gulf , large amount of snow peas to Austrianmarkets.

Vista Process Foods Pvt. Ltd. Supplier of Chicken andVegetable Products


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Click to edit Master subtitle style

MCDonalds SupplyChain

Delivering a wide range ofbenefits to our restaurants

Common business models andtools

Borderless knowledge transfer Optimization of services

Economies of scale

Centralized competence

Financial strength

Easy customer communications

Vi i f S l Ch i I i


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Vision of Supply Chain Integration


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The McDonalds Supply Chain

Purchasing The 3 legged stool: Corporation Franchisees

Suppliers Handshake agreements, Trust

Long term win-win partnership, risk sharing Distributor is wholesaler for Restaurants Logistics

Exclusive distributors (3PL) Freight consolidation (via freight forwarders)

Long term partnerships with service providers,risk sharing Strong quality focus (Cold Chain, HACCP, QIP)


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DQMP (Distributor Quality Management Process)

Operations and Customer Relations (Operations Manual)

Quality Control (HACCP / QIP)

Cold Chain standards Hygiene regulations

Product handling standards

Emergency and contingency plans

Risk & Crisis management Continuous unannounced internal and 3rd party audits for

DCs result in superior quality scores regularly.

McDonalds Logistics Standards


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Organization

McDonald's had a diffuse innovation process. This processproduced some big winners, such as the Egg McMuffinbreakfast sandwich, the Big Mac and kid-friendly HappyMeal. (Franchise)

Companies that grow and become increasingly complexneed to consider adopting processes that are betteraligned to their new circumstances

McDonald's approach helps to ensure that it introducesitems that have a strong chance of resonating withconsumers and generating attractive returns.

For example, one idea for a salad with shrimp was nixed


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Evaluation of theOperations Strategy

Internal and external consistency - Looking at theoperations strategy along the seven dimensions,

they all support the operations mission and thebusiness strategy.

Contribution to competitive advantage - Systemic

strategy creates unmatched consistency inoperations that has been difficult to imitate.


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Thank you verymuch

for your kindattention

mcdonald - os project

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