A

Report on
McDonalds Logistics
&
Supply Chain Management
Submitted By:
Name o !nstructor !ncharge
Contents "g# No#
1 | P a g e
Abstract $
!ntroduction: %
1.McDonalds in India %
2.Quality,Service, Cleanliness & Value &
Literature Re'ie(: )
1.Intricate Supply-Chain et!or" )
Methodology *
Analysis and !nterpretation: +,
1. Supply Chain #rocess
++
2.$utsourced %usiness & Suppliers +%
&.'aith is the "ey +&
(.Sole distri%ution partner +-
).*e+ri,erated -ove-ent o+ products +)
..De-and +orecastin, +)
/.'ood Sa+ety & Quality assurance +*
0.1echnolo,y at its %est .,
Learning rom "ro/ect .+
Conclusion .+
Reerences ..
0able o Content
2 | P a g e
Abstract
1he +oray o+ -ultinational +ast +ood retailers into India has i-pacted the taste
%uds o+ Indian consu-ers si,ni+icantly. Instant +ood is scorin, over traditional
+ood due to in+luence o+ 2estern countries, and rise in inco-e & su%se3uent
standard o+ livin,, convenience, etc. 4s a result, +ast +ood -enus are ,ainin,
!ider acceptance +ro- the Indian consu-ers.
Currently the Indian +ast +ood industry stands at a -assive si5e o+ 6(/ %illion,
driven %y a ,ro!in, nu-%er o+ !or"in, pro+essionals and increasin,
!esterni5ation. 4part +ro- this, %usy li+e schedule, standardi5ed +ood, and less
ti-e consu-in, processes are also +uellin, the de-and +ro- do-estic
consu-ers in the industry. 4s de-and +or all types o+ +ast +ood ite-s are
consistently on the rise, pi55a, %ur,er, and 'rench +ries have %eco-e the all
ti-e +avourite a-on, youn, Indians, -ore so !ith so-e o+ the !ell-"no!n
%ur,er and pi55a restaurants li"e McDonalds, Do-inos, 7'C, #i55a 8ut,
Su%!ay, etc operatin, in India.
1his report ,ives a %rie+ description a%out the lo,istics process o+ McDonalds
in India !hich has %est in class QS* ratin,.
McDonalds is the !orld leader in QS* 9Quic" Service *estaurant:.
1heir presence in 110 countries !ith &&,;;; restaurants ,lori+ies its position as
!orld leader and as +ast +ood ,iant. 1his hu,e net!or" is not easy to -ana,e
!here ,uest e<pectations are clean, hy,ienic, tasty and 3uic" +ood every ti-e.
1he credit o+ this success+ul availa%ility ,oes to the uni3ue =o,istics and
supply chain -ana,e-ent and control over this entire hu,e net!or".
3 | P a g e
!ntroduction
Internationally, no dou%t McDonalds is considered the lar,est +ood service
retailer in the !orld. 1he +irst restaurant !as esta%lished in 1>)) in Des
#laines, Illinois, ?S4.
McDonald@s is the !orld@s leadin, +ood service retailer !ith -ore than &&,;;;
restaurants in110 countries servin, -ore than ./ -illion custo-ers each day.
It e-er,ed in Indian 1erritory in 1>>. eyein, the in+or-al dinin,-out industry
in India !hich is esti-ated at 6/( %illion a year.
In India, the +irst outlets o+ the chain thre! open their doors to the pu%lic in
Delhi and Mu-%ai in 1>>. !ithin one -onth o+ each other.
In India, McDonald@s has t!o Indian entrepreneursA
1: 4-it BatiaA Vice Chair-an, 8ardcastle *estaurants #vt. =td, !hich has
%een a!arded a Develop-ent =icensee status %y McDonald@s
Corporation, ?.S.4, spearheads McDonald@s operations in 2est & South
India.
2: Vi"ra- Ca"shi@sA Connau,ht #la5a *estaurants #rivate =i-ited,
-ana,in, McDonald@s restaurant in orth & Dast India !hich is still a
Boint Venture !ith McDonald@s Corporation.
McDonalds is present in -ore than (; Indian cities !ith 2);E restaurants and
serves .);,;;; custo-ers daily.
'or trainin, their sta++ co-pany ta"es all its -easure throu,h intensive
pro,ra--es li"e Supplier Quality Mana,e-ent Syste-s 9SQMS: and the
Distri%utor Quality Maintenance #ro,ra- 9DQM#:.
4 | P a g e
1uality2 Ser'ice2 Cleanliness & 3alue 41SC & 35:
McDonald@s is driven %y the philosophy o+ Quality, Service, and Cleanliness &
Value +or Money. 1his translates into a co--it-ent to provide custo-ers hi,h
3uality products, served 3uic"ly !ith a s-ile, in a clean and pleasant
environ-ent at an a++orda%le price. 1his e++ectively -eans that the McDonald@s
-enu is priced at a value that the lar,est se,-ent o+ the Indian consu-ers can
a++ord, !hile at the sa-e ti-e ensurin, that 3uality is not sacri+iced +or value -
rather,
McDonald@s levera,es econo-ies to -ini-i5e costs !hile -a<i-i5in, value to
custo-ers. 4round the !orld 9includin, India:, appro< 0)F o+ McDonald@s
restaurants !ere o!ned and operated %y independent +ranchisees.
Get, McDonald@s !as a%le to run the sho! sea-lessly %y outsourcin, nine
di++erent in,redients used in -a"in, a %ur,er +ro- over &) suppliers spread all
over India throu,h a -assive value chain.
McDonalds is a li-ited -enu restaurant is characterised %y speed o+
operations.
5 | P a g e
Logistics
=o,istics is the -ana,e-ent o+ the +lo! o+ ,oods %et!een the point o+ ori,in
and the point o+ consu-ption in order to -eet so-e re3uire-ents, o+
custo-ers or corporations. 1he resources -ana,ed in lo,istics can include
physical ite-s, such as +ood, -aterials, ani-als, e3uip-ent and li3uids, as !ell
as a%stract ite-s, such as ti-e, in+or-ation, particles, and ener,y. 1he lo,istics
o+ physical ite-s usually involves the inte,ration o+ in+or-ation +lo!, -aterial
handlin,, production, pac"a,in,, inventory, transportation, !arehousin,, and
o+ten security. 1he co-ple<ity o+ lo,istics can %e -odeled, analy5ed,
visuali5ed, and opti-i5ed %y dedicated si-ulation so+t!are. 1he -ini-i5ation
o+ the use o+ resources is a co--on -otivation in lo,istics +or i-port and
e<port.
Supply chain management
Supply chain -ana,e-ent 9SCM: is the -ana,e-ent o+ the +lo! o+ ,oods. It
includes the -ove-ent and stora,e o+ ra! -aterials, !or"-in-process
inventory, and +inished ,oods +ro- point o+ ori,in to point o+ consu-ption.
Interconnected or interlin"ed net!or"s, channels and node %usinesses are
involved in the provision o+ products and services re3uired %y end custo-ers
in a supply chain. Supply chain -ana,e-ent has %een de+ined as the Hdesi,n,
plannin,, e<ecution, control, and -onitorin, o+ supply chain activities !ith the
o%Iective o+ creatin, net value, %uildin, a co-petitive in+rastructure,
levera,in, !orld!ide lo,istics, synchroni5in, supply !ith de-and and
-easurin, per+or-ance ,lo%ally.H
6 | P a g e
6holesale 0rade
4n econo-ic indicator that -easures the value in ?.S. dollars o+ all -erchant
!holesalers@ sales and inventories. 2holesale trade is one co-ponent o+
%usiness sales and inventories. $nly those +ir-s !hich sell to ,overn-ents,
institutions and other %usinesses are considered part o+ !holesale trade.
Retail trade
*etailers are %usiness +ir-s en,a,ed in o++erin, ,oods and services directly to
consu-ers. In -ostJ%ut not allJcases, retail outlets are pri-arily concerned
!ith sellin, -erchandise. 1ypically, such %usinesses sell individual units or
s-all ,roupin,s o+ products to lar,e nu-%ers o+ custo-ers. 4 -inority o+
retailers, ho!ever, also ,arner inco-e throu,h rentals rather than outri,ht sales
o+ ,oods 9as in the case o+ enterprises that o++er +urniture or ,ardenin, tools +or
rent: or throu,h a co-%ination o+ products and services.
Channels o distribution:7
4 channel o+ distri%ution or trade channel is de+ined as the path or route alon,
!hich ,oods -ove +ro- producers or -anu+acturers to ulti-ate consu-ers or
industrial users. In other !ords, it is a distri%ution net!or" throu,h !hich
producer puts his products in the -ar"et and passes it to the actual users. 1his
channel consists o+ A- producers, consu-ers or users and the various
-iddle-en li"e !holesalers,sellin, a,ents and retailers9dealers: !ho intervene
%et!een the producers and consu-ers. 1here+ore,the channel serves to %rid,e
the ,ap %et!een the point o+ production and the point o+ consu-ption there%y
creatin, ti-e, place and possession utilities.
4 channel o+ distri%ution consists o+ three types o+ +lo!sA-
1. Do!n!ard +lo! o+ ,oods +ro- producers to consu-ers
2. ?p!ard +lo! o+ cash pay-ents +or ,oods +ro- consu-ers to producers
&. 'lo! o+ -ar"etin, in+or-ation in %oth do!n!ard and up!ard direction
i.e. 'lo! o+ in+or-ation on ne! products, ne! uses o+ e<istin, products, etc
+ro- producers to consu-ers. 4nd +lo! o+ in+or-ation in the +or- o+
+eed%ac" on the !ants, su,,estions, co-plaints, etc +ro- consu-ersKusers
to producers.
7 | P a g e
Literature Re'ie(
0he !ntricate Supply7Chain Net(or8
1he stren,th o+ McDonalds India e-ployees a-ounts >,;;; people includin,
restaurant sta++. Cut the surprise lies in its uni3ue and intricate supply chain
net!or" !hich is -ana,ed %y Iust +ive people across the !hole country.
Includin, the Quality 4ssurance people, this +i,ure rises to Iust ei,ht people
!ho are all responsi%le +or its e++icient supply chain Indian 1erritory.
0he Net(or8
1he supply-chain net!or" o+ McDonalds is o+ its o!n "indsA
1;; percent outsourced =ean !ith no %ac"-up sta++ and no +rills. 1he co-pany
is enIoyin, ,ro!th o+ &;-(; percent every year in India. 1he credit ,oes to the
proper research !or" done %e+ore launchin, McDonalds in India. 1he e<perts
set to,ether and coordinated ,round!or" !as done to ensure the success+ul
+unctionin, o+ its de-and and supply syste-. It !as +ro- 1>>; on!ards,
e<pert tea-s happened to %e in India to chec" the stren,th o+ Indias lo,istics
industry, the relia%ility o+ its transport sector, and resource availa%ility. 1he
result !as an e<tre-ely e++ective supply-chain at opti-al level in place despite
o+ Indias !ea" in+rastructure.
In conte<t to Indian -ar"et special -enus !ith reli,ious and cultural
senti-ents !ere desi,ned and in si< years ti-e the co-pany !as ready !ith its
entire supply chain. McDonalds !hich is "no!n +or its %ee+ %ur,ers launched
its products in India !hich !ere +ree o+ %ee+ and por".
8 | P a g e
Methodology
As per the re9uirements o this pro/ect2 (e collected the data rom
primary and secondary sources#
"rimary Data Source:
2e visited the McDonalds $utlet located at eptune Ma,net Mall at Mulund
Dast, Mu-%ai.
Store Mana,er Mr.-------------- %rie+ed us a%out the lo,istic process o+ outlet.
8e Iust ,ave us the in+or-ation a%out ho! they ,et all the +ood articles
re3uired to prepare +inished products. 8e -entioned a%out the *adha"rishna
'oodland #vt. =td, distri%ution partner o+ McDonalds and the cold chain
transportation process o+ *7'#s truc"s.
Secondary Data Source:
1here is a lot o+ in+or-ation present on internet a%out the lo,istics and supply
chain -ana,e-ent o+ McDonalds, India.
2e !ere a%le to o%tain a ,ood a-ount o+ in+or-ation +ro- McDonalds
2e%site as !ell other third party !e%site such as Slide share, ICM* India etc.
1he in+or-ation +ro- these sources helped in %etter understandin, o+
McDonalds =o,istic and Supply Chain #rocess.
9 | P a g e
Analysis and !nterpretation
An :'er'ie( o McDonalds supply chain:
4 uni3ue sense o+ dedication and co--it-ent characteri5es McDonald@s India
- a co--it-ent to %e driven %y the leadership o+ local o!ners. Co--it-ent to
provide 3uality products and +ast +riendly service at a real value to support
other Indian %usinesses throu,h local sourcin, and i-partin, ne! s"ills and to
,enerate local e-ploy-ent %y %ein, a part o+ the local culture. 1his
co--it-ent has translated into endurin, %ene+its to the %usinesses at the ,rass
root level, in the areas o+ introduction o+ ne! crops, ne! a,ricultural practices
and +ood processin, -ethods and procedures.
McDonald@s uni3ue @cold chain@, on !hich the QS* -aIor has spent -ore than
si< years settin, up in India, has %rou,ht a%out a verita%le revolution,
i--ensely %ene+itin, the +ar-ers at one end and ena%lin, custo-ers at retail
counters to ,et the hi,hest 3uality +ood products, a%solutely +resh and at ,reat
value. McDonald@s, throu,h its uni3ue cold chain, has %een a%le to, %oth cut
do!n on its operational !asta,e, as !ell as -aintain the +reshness and
nutritional value o+ ra! and processed +ood products. 1his has involved
procure-ent, !arehousin,, transportation and retailin, o+ perisha%le +ood
products, all under controlled te-peratures.
10 | P a g e
Supply Chain "rocess
4 McDonald@s %ur,er is not Iust a %ur,er %ut an outco-e o+ dedicated e++orts
%y +ar-ers, its suppliers, distri%ution centre and a +ir- pro-ise %y
McDonald@s. McDonald@s contri%utes a ,reat %ac" end process !hich ena%les
you to enIoy your +avourite %ur,er +resh & hot, and +or that, the supply chain
truly acts as a %ac"%one o+ the %usiness.
1he supply chain %e,ins at the ,rass root level, !ith the suppliers receivin, the
crop +ro- the +ar-ers. 1he crop is then processed and dispatched to the
Distri%ution centres in special te-perature controlled truc"s, !hich ensures
that the 3uality o+ the ite-s is not co-pro-ised. 1hese ite-s are stored in
roo-s !ith di++erent te-perature 5ones and are +inally dispatched to the
McDonald@s restaurants on the %asis o+ their re3uire-ents. McDonald@s
e<pectation o+ @Cold, Clean, and $n-1i-e Delivery@ plays a very vital role in
-aintainin, the inte,rity o+ the products throu,hout the entire @cold chain@.
11 | P a g e
Multi7Layered Supply7Chain
1he McDonalds supply chain is %oth critical and -ulti-layered. 1here are t!o
cate,ories in +ood in,redients supplyL
0ier7! and 0ier7. suppliersA
In 0ier7! there are 1( core suppliers-provide processed products e.,. Ve,eta%le
and chic"en patties co-es +ro- Vista #rocessed +oods #vt =td. , 'rench +ries,
potato !ed,es and hash %ro!ns %y McCain 'oods India #vt. =td. 4nd so on.
In 0ier7. suppliers there are ,ro!ers and processors !ho provide lettuce and
potato, poultry ite-s and coatin, syste-s that are used +or coatin, the chic"en
and ve,eta%le patties. 1he +lo! o+ in,redients are +ro- 1ier-2 to 1ier-I
suppliers !ho process the-.
o!, the +leet o+ re+ri,erated truc"s transport these processed +oods to the
co-panys Distri%ution Centers 9DCs:.
1hese truc"s have %een speci+ically -anoeuvred +or varia%ility o+ McDonalds
products. 1hese are Multi-te-perature and sin,le te-perature truc"s into
practice !here 2); McDonald@s Indian restaurants are provided on ti-e +ast
delivery.
1his is not unidirectional, it also include the si,ni+icant aspect o+ return
lo,istics. 8ence the e-pty %ottles and rac"s are availa%le +or +urther
processin,. #lastic crates are used +or %uns to ensure their 3uality.
2ith +our Distri%ution Centres across the country all 2); restaurants are served
e++ectively. 4nd every ne! outlet addition is capa%ly handled %y these DCs
!ithin in ten days in the country.
1he oida and Mu-%ai DCs are pri-ary Distri%ution Centres o!ned %y the
co-pany. 1he other t!o Distri%ution Centres are in Can,alore and 7ol"ata are
housed in leased properties. 1he syste- that is used to -ana,e lin" %et!een
*estaurant and DCs is a hub7and7spo8e model !here the DCs act as hu%s.
McDonalds transportation has %een co-pletely outsourced and since 0;
percent is re+ri,erated truc" -ove-ent, the co-pany has a dedicated +leet
!hich transports their ,oods.
12 | P a g e
13 | P a g e
:utsourced Business
1he essence o+ the e++ective supply-chain -odel is undou%tedly attri%uted to
its uni3ue concept o+ outsourcin,. 1he co-pany has a 1;; percent outsourced
supply chain, !hich is a rare case in industry ,iants. Cut McDonalds has
co-plete control over its +unctionin,. 1he per+or-ances o+ outsourced
co-panies are -onitored on 7ey #er+or-ance Indicators 97#Is:.
1he +i,ure hi,hli,hts the suppleness o+ its supply-chain under three principles
to !hich the co-pany adheres un!averin,ly, the principles o+ trust and
colla%oration %et!een the %rand, the o!ners or operators, and the suppliers.
McDonalds has a total o+ (; suppliers, in !hich 1( are the core suppliers,
"no!n as 1ier-1 suppliers, they supply directly to the +ast +ood chain.
Suppliers Details:
0ier7! Suppliers:
14 | P a g e
Cheese Dynamix Dairy Industries Ltd., Pune
Dehydrated onions Jain Foods, Jalgaon
Iceberg lettuce Trikaya Agriculture, Pune
Chicken atty !ista Foods, Talo"a
!eg. Patty, !eg. nuggets,
Pineale#Ale ie
$itran Foods, Talo"a
Chicken %dressed& 'i(erdale, Talegaon
)uns Cremica Industries, Phillaur
*ggless mayonnaise +uaker Cremica P(t. Ltd., Phillaur
,esame seeds -ha.iabad
Iceberg lettuce /eenaAgritech, Delhi
Fish 0illet atties Amalgam Foods Ltd., $ochi.
Iceberg lettuce 1oty Farms 2 1rchards, 1oty
!egetables 0or the atties
Finns Fro.en Foods 2 Jain Foods
%3asik, Jalgaon&
/utton and mutton atties Al $abeer, 4yderabad
0ier . Suppliers:
(; suppliers-provide =ettuce, Ve,eta%les, #otato, #oultry 'ar-s, coatin, +or
ve,eta%les& #atties, Dyna-i< Mroup, Mrs. Cectorsetc & #rocessed products.
Ve,eta%le and chic"en patties co-e +ro- Vista #rocessed +oods #vt =td,
'rench +ries.
1he rest are 1ier-2 suppliers. *elyin, on local players, -ost o+ the suppliers
are local. So-e internationally +a-ous +orei,n players li"e McCain 'oods
India are also the part o+ supply tea-. McCain set up its Indian %usiness !hen
McDonalds ventured into the +ast +ood %usiness in the country.
'or supplier to re-ain in the -ain strea-, the ter-s o+ !or" are very ri,orous.
Its a !hole lot o+ responsi%ility !ith 3ualitative assurance lies on suppliers. 4
co-panys stellar credentials are not enou,hL the suppliers Io% does not end
!hen the product leaves his pre-ises, rather it ends only !hen the custo-er
consu-es it. McDonalds e<pects its suppliers to personally ensure the 3uality
o+ their products to s"irt the ris" +actor. Coca Cola, the %evera,e partner i-part
!ater -ana,e-ent "no!led,e to the restaurant sta++ to ensure pota%le 3uality
o+ drin"in, !ater.
;aith is the <ey
McDonalds has no le,ally si,ned a,ree-ents !ith its suppliers. It is a si-ple
handsha"e relationship !ith the suppliers. 1he policy !ith suppliers is very
clearL one product-one supplier relationship. 1he policy has %een proven as
lon,-ter- relationships at every ti-e.N
1he +ast +ood chain sells &; or &) independent Stoc" 7eepin, ?nits 9S7?s: at
its outlets. 2ith various co-%inations 9a -eal can %e s-all, -ediu- or lar,e,
!hile a Co"e can also %e sold as re,ular, -ediu- or lar,e:, there are 1;;-1);
S7?s !hich are sold to custo-ers. =i-ited S7?s have ensured speedy service
and ease to -aintain stoc" "eepin,.
1he -aIor de-and 90;F: is +ul+illed %y 1( core suppliers and !henever
addition is there in restaurant line those 1( suppliers are the +irst choice.
15 | P a g e
Sole Distribution "artner
1he entire distri%ution o+ McDonalds products in India is handled %y
*adha"rishna 'oodland #vt. =td, the only distri%ution partner. *7'= -ana,es
the +our DCs and since it has a transport division, handles the truc" -ove-ent
in the supply-chain ri,ht throu,h the country. McDonalds e<hi%its control on
its distri%ution partner to -eet its standards o+ cold, clean and on-ti-e delivery.
*7'= e<perts -ana,es daily activities o+ raisin, purchase orders to suppliers,
invoicin,, "eepin, trac" on !or"in, capital -ana,e-ent, ti-ely delivery,
pay-ents etc. 4ny ite- re3uired, is sourced directly +ro- *7.
1here are only t!o products, %uns and Co"es, !hich are sent directly to the
restaurants. Cuns have a li-ited shel+ li+e, hence they are sent directly to the
outlets. Coca Cola has its o!n distri%ution syste- !hich ensures 3uic"
dispatch o+ its products.
4s !ith its suppliers, McDonalds has no le,ally docu-ented Service =evel
4,ree-ents 9S=4s: !ith *7'=.
'or distri%ution partner also McDonalds has set 7#Is 97ey #er+or-ance
Indicators:.
1he DCs are assessed on several +actors li"e ad-inistration e++iciency the total
nu-%er o+ cases -ana,ed per -an hour, !arehouse e++iciency, overti-e as a
percenta,e o+ the total nu-%er o+ hours !or"ed and in the case o+
transportation, the nu-%er o+ cases handled per trip, truc" utili5ation, etc.
16 | P a g e
17 | P a g e
Rerigerated Mo'ement o "roducts
1he transportation o+ McDonalds has %een co-pletely outsourced and 0;F is
done throu,h re+ri,erator truc" -ove-ent. 1he products are transported in a
dedicated +leet o+ re+ri,erated truc"s to the co-panys distri%ution centres.
Multi-te-perature and sin,le te-perature truc"s then transport the +ast +ood
s!i+tly to the McDonalds restaurants across the country. McDonalds have the
lar,est re+ri,erated -ove-ent o+ products in India. 1he -ove-ent o+ edi%le
,oods is throu,h a syste- o+ cold chain !here +leets o+ truc" transport all the
ite-s, capa%le to carry di++erent ite-s all to,ether as there are co-part-ents
created to store +ro5en products at -10
;
C to -2)
;
C, chilled products +ro- 1
;
C-
(
;
C and dry products at a-%ient te-peratures. 4nother +eature is that truc"
containers are -ade !ith t!o side doors in addition to the rear door. 1he side
doors are used to unload products !ithout distur%in, the products in the other
te-perature 5ones. 1he entire e++ectiveness o+ supply-chain is %ased on the
concept o+ Opull-supply chain. 1he restaurant issues orders to the Distri%ution
Center !hich, in turn, routes the order to the supplier and only then does the
supplier produce it. 1he concept is also "no!n as P-ade to orderN. 1he
supplier thus -aintains %arely any e<tra stoc"sL only i+ there is a contin,ency,
li"e the overhaul or servicin, o+ -achinery, !ill the supplier produce surplus
stoc"s. 4ccordin, to *7 'oodland, the +ill rate to store is >>.0 percent.
Demand ;orecasting:
&1Q SGS1DM De-and +orecastin, +or lon, ter- is %ased on an e++icient
concept "no!n as &1Q syste-J& stands +or the three years that the +ast +ood
chain !ill "eep chec"in, its plans, 1 represents the detailed +orecast o+ the ne<t
year and Q sy-%oli5es the 3uarterly -onitorin, o+ these +orecasts. 2hile
preparin, annual %ud,et suppliers %eco-es a part o+ %ud,etin, process.
?sually, the restaurants ,ive a three-day to one-!ee" +orecast to the
Distri%ution Center. 1he DC, in turn, has a three--onth rollin, +orecast !ith
the suppliers !hich ena%le the- to plan their production schedules
-eticulously. 2ith 2); restaurants scattered across the country, lead ti-es +or
delivery assu-e critical i-portance. Dvery restaurant -ana,er "no!s the e<act
ti-e o+ arrival o+ each product !hich ena%les the supply chain tea- to !or"
%ac"!ards to ensure ti-ely distri%ution. 2ith a -a<i-u- inventory o+ ten
days in its syste-, McDonalds -aintains an e++icient inventory turn ratio o+
&..
18 | P a g e
;ood Saety & =ACC"
'ood sa+ety is another critical area +or 3uality standard. 'or this 8a5ard
4nalysis Critical Control #oint 984CC#: certi+ication !hich ensures +ood
3uality is applica%le. 1his is an industry level certi+ication and is applica%le on
all the suppliers o+ the +ast +ood chain. 4part +ro- 84CC#, there are other
+ood sa+ety syste-s li"e the Supplier Quality Mana,e-ent Syste-s 9SQMS:
and the Distri%utor Quality Maintenance #ro,ra- 9DQM#: are also in practice.
'or processin, and -anu+acturin, plants SQMS is applica%le. 1he SQMS is a
!orld!ide -andate +or all McDonalds suppliers and includes essentials o+ the
84CC# control syste-, !hile also contrivin, several principles o+ its o!n.
1he DQMS audits and chec"s the !arehouses o+ the chain.
4uditors !orld!ide are also trained on its SQMS and DQM# pro,ra-s.
Independent auditors then audit plants and !arehouses and allot scores to
McDonalds +acilities ,lo%ally to ensure hi,hest standards.
1uality Assurance
1aste o+ the +ood products is another para-eter o+ Quality. 'or this
McDonalds has developed a Sensory #ro,ra-.
1he centrali5ed la%oratory +or this pro,ra- is located in 8on, 7on, !hich
prepares sensory e<perts.
1hese personnel co-e %oth +ro- the suppliers and Quality 4ssurance tea-s.
Dvery %atch o+ a +ood product that ,ets -anu+actured at a suppliers plant is
chec"ed %y an approved sensory panel at the plant and scores are allotted to the
product.
$nly a product !ith -ini-u- score is shipped out o+ the +actory. $ther
-easures are also ta"en in the +or- o+ at rando- chec"s o+ outlets.
4lso, every 3uarter or hal+ year, -e-%ers o+ the -ana,e-ent do a product
cuttin, !ith "ey suppliersJ+ry a product, chec" its taste and allot scoresJto
chec" i+ the product scores are -ovin, in the ri,ht direction north!ards. 4nd
lastly, sa-ples o+ the products that are -anu+actured in the country are shipped
to the central la%oratory at 8on, 7on, !hich evaluates the products.

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0echnology at its Best
1he entire syste- o+ supply chain is po!ered %y technolo,y to -a"e it s-ooth
and e++ortless.
Suppliers are usin, S4# !hile Distri%ution Centers are on *4MC$ Marshall
D*# !ith Co%ra so+t!are.
1hese syste-s are used to auto-i5ed upload o+ store orders. 'or assistin, in
day to day +unctions o+ store, technolo,ies have %een developed e.,. trac"
sales, ena%les restaurants to schedule sta++ and send +orecast orders to DCs, etc.
1he co-pany is tappin, the hi,h ,ro!th opportunities !ith custo-er
satis+action criteria e++ectively and in this e++ort McDonalds added
McDelivery, an innovative option !hich delivers -eals to the custo-ers
doorstep.
1his service has ,ro!n at stratospheric levels %y -ore than (;; percent.
McDelivery !as +irst launched in Mu-%ai and Delhi in 2;;(.
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Learnings and Conclusion
McDonalds Supply Chain is 3uite uni3uely handled !ith least nu-%er o+
e-ployees on McDonalds payroll. 1he control on outsourced entities is
co--enda%le. 2ith ever ,ro!in, %usiness o+ +ast +ood McDonalds has laid
do!n its syste-s e++iciently and e<pandin, at enor-ous speed. 1he -odel can
%e replicated in other sectors as !ell.
I-portant aspects o+ McDonalds =o,istics process that !e ca-e to "no! areA
1: 'ully Inte,rated =o,istics and SCM process,
2: Cold Chain 1ransportation +acilities,
&: Various I1 tools and so+t!are applica%le in SCM such asA
Dnterprise *esource #lannin, 9D*#: Syste-,
=o,istic Mana,e-ent Syste-,
*4MC$ Marshall D*# and
#oint o+ sale 9#$S: syste-.
(: Measures +or Quality assurance such as
8a5ard 4nalysis Critical Control #oint 984CC#:,
Supplier Quality Mana,e-ent Syste-s 9SQMS: and
Distri%utor Quality Maintenance #ro,ra- 9DQM#:.
): De-and 'orecastin, 1ool such as &1Q Syste-.

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Reerences
+ http:>>(((#mcdonalds#com>us>en>our?story#html
. http:>>(((#mcdonaldsindia#com>aboutus#html
$ http:>>(((#ood7ser'ice7europe#com>trendscout>hottrends>pages>
% http:>>(((#icmrindia#org>ree@.,resources>casestudies>McDonald
@.,ood@.,ch ain#htm
& http:>>sourcing$#com>blog>mcdonalds7india7supply7chain>$>
- http:>>logistics#baree#net>mcdonalds7india7supply7chain>
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