suppy chain 1

8/6/2019 Suppy Chain 1

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Mc DONALDSMc DONALDSSUPPLYSUPPLY

CHAINCHAIN



The McDonald¶s System The McDonald¶s System ± ± the World¶s Best QSRthe World¶s Best QSR

experienceexperience

World Market Leader World Market Leader in the QSR area (Quick Servicein the QSR area (Quick Service

Restaurant)Restaurant)

Franchise System (72%)Franchise System (72%)

SystemSystem employeesemployees: 1: 1.6.6 mmillionillion

CustomersCustomers Per Per DayDay: 4: 477 mmillionillion

Corporate Strategy:Corporate Strategy:

QSC&V:QSC&V: QQuality,uality, SService,ervice, CCleanliness andleanliness and VValuealue

Ray Kroc: ³None of us is as good as all of us´Ray Kroc: ³None of us is as good as all of us´

Plan To WinPlan To Win --> Successful business revitalization> Successful business revitalization

Growth by getting better Growth by getting better



�� Between 1992 and 1996, when McDonald's opened its first outlet inBetween 1992 and 1996, when McDonald's opened its first outlet in

India, it worked fr enetically to put the perf ect supply chain in place. ItIndia, it worked fr enetically to put the perf ect supply chain in place. It

trained the local far mers to produce lettuces or potatoes totrained the local far mers to produce lettuces or potatoes to

specifications and worked with a vendor to get the perf ect cold chainspecifications and worked with a vendor to get the perf ect cold chain

in place. And explained to the suppliers pr ecisely why only one in place. And explained to the suppliers pr ecisely why only one particular size of peas was acceptable These efforts paid off in the particular size of peas was acceptable These efforts paid off in the

for m of joint ventur es between McDonald's India (a 100% whollyfor m of joint ventur es between McDonald's India (a 100% wholly--

owned subsidiary of McDonald's USA) and Hardcastle Restaurantsowned subsidiary of McDonald's USA) and Hardcastle Restaurants

Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant (New Delhi). Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant (New Delhi).



COLD CHAIN PartnersCOLD CHAIN Partners

1.1. Dynamix Dairy Industries (Supplier of Cheese)Dynamix Dairy Industries (Supplier of Cheese)

2.2. Trikaya Agriculture (Supplier of Iceberg Lettuce)Trikaya Agriculture (Supplier of Iceberg Lettuce)

3.3. Vista Processed Foods Pvt. Ltd. (Supplier of Chicken andVista Processed Foods Pvt. Ltd. (Supplier of Chicken and

Vegetable range of products including Fruit Pies)Vegetable range of products including Fruit Pies)

4.4. Radhakrishna Foodland (Distribution Centres for Delhi andRadhakrishna Foodland (Distribution Centres for Delhi and

Mumbai)Mumbai)

5.5. Amrit Food (Supplier of long life UHT Milk and Milk ProductsAmrit Food (Supplier of long life UHT Milk and Milk Products

for Frozen Desserts)for Frozen Desserts)



1.1. Dynamix Dairy Industries (Supplier of Cheese)Dynamix Dairy Industries (Supplier of Cheese)

�� Fully automatic international standard processing facility. Fully automatic international standard processing facility.

�� Capability to convert milk into cheese, butter/ghee, skimmed milkCapability to convert milk into cheese, butter/ghee, skimmed milk

powder, lactose, casein & whey protein and humanized baby foodpowder, lactose, casein & whey protein and humanized baby food

�� Stringent quality control measur es and continuous Research &Stringent quality control measur es and continuous Research &

DevelopmentDevelopment

Each batch is mixed in one large stainless steel cooler and chilledEach batch is mixed in one large stainless steel cooler and chilled

immediately to two degr ees Celsius to stop bacterial growth andimmediately to two degr ees Celsius to stop bacterial growth and

pr eserve fr eshness. From this point onwards, until just befor e the pr eserve fr eshness. From this point onwards, until just befor e the

burger is actually served in a McDonald¶s r estaurant hundr eds of burger is actually served in a McDonald¶s r estaurant hundr eds of

kilometers away, the temperatur e is never allowed to incr ease. kilometers away, the temperatur e is never allowed to incr ease.



2. Trikaya Agricultur e (Supplier of Iceberg Lettuce)2. Trikaya Agricultur e (Supplier of Iceberg Lettuce)

�� A specialized nursery with a team of agricultural experts A specialized nursery with a team of agricultural experts

�� Drip and sprinkler irrigation in raised far m beds with f ertilizer mixingDrip and sprinkler irrigation in raised far m beds with f ertilizer mixing

plant.plant.

�� Pr ePr e--cooling room and a large cold room for post harvest handling. cooling room and a large cold room for post harvest handling.

�� Refrigerated truck for transportation.Refrigerated truck for transportation.

�� Vegetables ar e moved into the pr eVegetables ar e moved into the pr e--cooling room within half an hour cooling room within half an hour

of harvesting. of harvesting.

�� The pr eThe pr e--cooling room ensur es rapid vacuum cooling to 2º C withincooling room ensur es rapid vacuum cooling to 2º C within

90 minutes. 90 minutes.

�� The pack house, pr eThe pack house, pr e--cooling and cold room ar e located at the far mscooling and cold room ar e located at the far ms

itself, ensuring no delay between harvesting, pr eitself, ensuring no delay between harvesting, pr e--cooling, packagingcooling, packaging

and cold storageand cold storage

��



3) Vista Processed Foods Pvt. Ltd. 3) Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and(Supplier of Chicken and

Vegetable range of products including Fruit Pies)Vegetable range of products including Fruit Pies)

A joint ventur e with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and A joint ventur e with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and

Vista Processed Foods Pvt. Ltd., produces a range of frozen chicken andVista Processed Foods Pvt. Ltd., produces a range of frozen chicken and

vegetable foods. A world class infrastructur e at their plant at Taloja,vegetable foods. A world class infrastructur e at their plant at Taloja,

Maharashtra, has:Maharashtra, has:

The technology includes hiThe technology includes hi--tech r efrigeration plants for manufactur e of frozentech r efrigeration plants for manufactur e of frozen

food at temperatur es as low asfood at temperatur es as low as -- 3535°° C. This is vital to ensur e that the frozenC. This is vital to ensur e that the frozen

food r etains it fr eshness for a long time and the 'cold chain' is maintained. food r etains it fr eshness for a long time and the 'cold chain' is maintained.

The frozen product is immediately moved to cold storage roomsThe frozen product is immediately moved to cold storage rooms. .



McDonald¶s Supply Chain ChallengesMcDonald¶s Supply Chain Challenges Even stronger focus on freshness and qualityEven stronger focus on freshness and quality

OnOn--going product innovationsgoing product innovations

Strong customer demand fluctuationsStrong customer demand fluctuations

based on promotionsbased on promotions

Order Order-- and inventory managementand inventory management

restaurantrestaurant ± ± DCDC ± ± supplier supplier --

raw material supplier raw material supplier

Bull Whip effectBull Whip effect

Change Management in a deChange Management in a de--centralized structurecentralized structure

The McDonald¶s Supply ChainThe McDonald¶s Supply Chain



Future orientated strategiesFuture orientated strategies



Supply Chain IntegrationSupply Chain Integration



´́OneOne--StopStop--Shopping´ Lean Logistics SolutionShopping´ Lean Logistics Solution



ResultsResults



Achievements: Yield Improvement

Gross Margin improvement > 0.15%

Raw Waste Reduced

Reduced by 30%

Average Inventory Reduced

Reduced by 30%

Store Transfers Halved

Order Time Halved

Goals: Yield Improvement

0.15% increase in Gross Margin

Raw Waste Reduction

Not included in Business Case

Inventory Reduction

15% decrease on the Inventory Level

Store Transfers Reduction

Simplification of Order Process

ResultsResults



Thank youThank you

very muchvery muchfor your for your

kindkindattentionattention

suppy chain 1

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