Mac Donalds Supply Chain in India

Topics: Supply chain management, Supply chain, Logistics Pages: 10 (2696 words) Published: June 18, 2013
2013
Violaine Carron de la Morinais
Assignment 1 – TBS 908: Supply Chain
12/04/2013
2013
Violaine Carron de la Morinais
Assignment 1 – TBS 908: Supply Chain
12/04/2013

How did MacDonald’s change its supply chain to fit the Indian market? How did MacDonald’s change its supply chain to fit the Indian market?

Table of Contents
Introduction2
1.McDonald’s western supply chain2
1.1 Theory of the three-legged stool2
1.2 The Suppliers3
1.3 The Franchisees4
1.4 The Forecasting demand4
1.4 Supply chain map5
2.McDonald’s Indian supply chain7
2.1 Why McDonald’s have to change its supply chain?7
2.2 The Suppliers8
2.3 The new Cold Chain10
Conclusion12
References14

Introduction

McDonald’s is one of the most famous fast food chains all around the world. McDonald’s supply chain is designed to assure the fast food chain delivery. The four drivers of McDonald’s supply chain are quality, cleanliness, service and value for the customer. In order to respect these four drivers, McDonald’s has created its own supply chain based on three stakeholders: the suppliers, the franchiser (McDonald’s), and the franchisees. The theory is to have a horizontal integrated supply chain by outsourcing all the goods they need. This supply chain management has been a success, first in the Unites States and then in some other parts of the world such as Europe, Australia and China. In the 1990’s, McDonald’s decided to get in the Indian market. To achieve this goal, the supply chain needed rethinking, to fit the customer and not decrease the quality of the food which was served to them. The objective of this study is to investigate how McDonald’s changed its supply chain management to cope with the Indian market. The study will first define the current supply chain in the Western countries. This supply chain is based on the theory of the three-legged stool. Then, the study will focus on the modifications they did on the Indian supply chain which are based on the theory of cold chain.

1. McDonald’s western supply chain
1.1 Theory of the three-legged stool

McDonald’s is based on the franchise business. The biggest part of their benefit comes from their rental agreements. McDonald’s business model is called the three-legged stool because, as you can see on figure 1, there are three important stakeholders: the suppliers, the corporation and the franchisees (SupplyChainBrain, 2011).

McDonald’s
Suppliers
Franchisees
Flow of informations
Flow of supplies
McDonald’s
Suppliers
Franchisees
Flow of informations
Flow of supplies

Figure 1: the three-legged stool of McDonald’s

According to McDonald’s, this business model can be a success only if each parts work together. The theory is that if one leg of the stool fail, the entire stool will fall. Mr Kroc, McDonald’s founder said “None of us is as good as all of us”(McDonald’s website).That is why McDonald’s has exclusive and certified facilities, handshake agreements and a long term contract with their suppliers. McDonald’s develops very close relationship with its suppliers and controls them very strictly in order to obtain the food quality they expected (MH&L, 2012). 1.2 The Suppliers

In McDonald’s supply chain, everything is outsourced, even the logistic. The company doesn’t own any factories or any distribution centres. As we have seen in the lecture, this is a horizontal integrated supply chain. In each western country, McDonald’s works with about 15 major suppliers, and each time the most important is the logistic supplier.(SupplyChainBrain, 2012) It has full responsibility for transportation, warehousing and logistic. It manages the distribution centres, the final processing facilities, and supplies transportation. In the US, the logistic supplier is Perseco, a branch of HAVY Global Solutions. McDonald’s like having long term relationships with its suppliers, that is why HAVY is...

References: * Kate Vitasek, ‘Compete: McDonald’s Suppliers are Vested for Success’, 2012, MH&L
http://mhlnews.com/global-supply-chain/compete-mcdonald-s-suppliers-are-vested-success?page=2
* Vice-President, Operations, Radha Krishna Foodland, 2011 ‘The big idea; McDonald’s unravels its supply chain’, LogisticsWeek
http://logisticsweek.com/feature/2011/07/the-big-idea-mcdonalds-unravels-its-supply-chain/
* Alex Bahr, director of Global Supply Chain Integration and Logistics at McDonald’s, 2012 ‘McDonald’s wants to be assured of delivery’, Supply chain movement
http://www.supplychainmovement.com/mcdonalds-wants-to-be-assured-of-delivery/
* Amit Singh Bisht, ‘Mac Donalds India supply chain’, 2009, Articles Base
http://www.articlesbase.com/marketing-articles/mcdonalds-india-supply-chain-729402.html
* Bart King – Consultant, ‘McDonald’s Recognizes Sustainable Supply Chain Partners’, 2012, News and views
http://www.sustainablebrands.com/news_and_views/articles/mcdonald%E2%80%99s-recognizes-sustainable-supply-chain-partners
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