Operation Management Mc Donalds

Topics: Management, Supply chain management, Supply chain Pages: 14 (4071 words) Published: October 15, 2012
Table of contents

Supply Chain Management (SCM). SCM’s Key Elements2
Supply Chain Management: Perspectives and Challenges3
The McDonald’s Company Background4
McDonald’s Business Strategy Overview5
Supply Chain Analysis. Methods’ and Models’ Overview5
Analysis of McDonald’s Supply Chain7
McDonald’s Supply Chain Assessment Criteria12
Declaration of Honesty18


Introduced in 1982 by Booz Allen Hamilton’s consultant Keith Oliver (Jacoby, 2009), the term ‘supply chain management’ has become one of the most broadly used in modern management theory and practice. The rapid evolution of this management branch combined with a continuously changing business environment has become a prerequisite for thorough analysis of the idea, perspectives and challenges for its further development. The objective of this paper is to define the notion of supply chain management, analyze perspectives and challenges of modern supply management development, and explore the improvement of supply chain performance on the example of a specific enterprise. In this paper, the development of supply chain in McDonald’s – the world’s largest chain of fast food restaurants operating in 119 countries (Yahoo Finance, 2012) – is examined. The following work provides a comprehensive analysis of the company’s supply chain strategy. Further, it proposes the list of recommendations aimed to increase the efficiency of the company’s supply chain.

Supply Chain Management (SCM). SCM’s Key Elements

Most often, the term ‘supply chain management’ (SCM) is defined as a sequence of ‘processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer’ (RCG, 1999). Obviously, supply chain is an established and, most often, sophisticated mechanism, the main objective of which is to link its three main components – supplier, manufacturer, consumer – while taking into consideration the interests and expectation of each chain link. Considering the complexity of supply chain and its dependence upon the variety of inner and outer factors, the greater part of supply management theorists and practitioners considers it to be ‘the combination of art and science’ (Wailgum & Worten, 2008) seeking to establish reasonable balance between its five main components (plan, source, production, delivery, and return), the core concepts of which are presented below. Plan is the component of supply chain aimed to introduce and ensure continuous monitoring of the supply chain’s efficiency and economy (Wailgum & Worten, 2008). The next supply chain link – source – provides the establishment of productive contacts with suppliers, thus settling the processes of payment and delivery. The further component – production – implies manufacturing of a product – a multifaceted process which, above all, includes the assessment of the product’s quality, the process productivity, and output. The final component – return – is often understood as a prerequisite for establishing a productive cooperation between the company and its consumers: the company wins customer loyalty by providing its clients with an opportunity to return goods and products purchased, which, due to some reason, do not correspond to their standards and expectations.

Figure 1: four key elements of the supply chain, Source:

Supply Chain Management: Perspectives and Challenges

It is obvious that the introduction of deliberate and comprehensive supply chain within an enterprise will result in its increased business efficiency and ensure its competitive advantage. Supply management specialists agree that the introduction of efficient SCM within a company, most often, guarantees time advantage, cost advantage, efficiency advantage, and quality advantage (Seghal, 2011). Comprehensive analysis of all the activities...
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