Project 324112

Analysis of Mc Donalds Information systems
Table of Content
1. Executive Summary .............................................................................. 2
2. Organizational Overview ...................................................................... 3
3. Issue Analysis ...................................................................................... 12
4. Analysis of Information Systems ........................................................ 14
4.1 Customer relationship management ............................................... 14
4.2 Knowledge Management ............................................................... 19
4.3 E-Procurement and McDonalds .................................................... 25
4.4 Supply Chain and Logistic Management Definition ..................... 29
5. Details Analysis of suggested Systems ............................................... 35
6. Organizational Impact of Recent Systems .......................................... 36
7. An overall analysis of organization..................................................... 40
Conclusion: .............................................................................................. 42
Reference ................................................................................................. 44
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Executive Summary
McDonalds is the world's largest chain of burger fast food and perhaps is one of the fastest and
rapidly growing fast food chain restaurants in the world. It uses various Information Systems to
thrive in a competitive marketplace of fast food industry. Some of the Information systems used
by McDonalds will be described in detail in the report analyzing the benefits of each system to
McDonalds. The report begins with general description of McDonalds along with the food
offered and the Information systems used. Then a through issue analysis will be carried out to
dissect the problems faced by McDonalds and the strength of McDonalds as compared to KFC
its closest competitor. The report then deals with the e-Procurement issue of McDonalds which
explains different type of eProcurement used and the steps followed in the procurement process.
EProcurement section is then proceeded by logistics section where firstly supply chain is talked
in brief and then supply chain specific to McDonalds is explained. The logistics standards &
processes followed in the supply chain and few of the most important logistics processes are
explained in detail in that section.
Furthermore, the Knowledge Management Information System section of the report clarifies the
concept of Knowledge Management and illustrates the use of the system in McDonalds. After
the Knowledge is shared within the employees, it has to be utilized properly to serve the
customer well. Hence for the purpose of excellent customer service, McDonalds uses Customer
Service Information System. The report examines various stages of Customer Relationship
management and maps it against the benefits offered to McDonalds.
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Finally, the impact of the suggested system and risk associated on utilizing the systems are
briefly discussed. Various positive impacts on business structure, organization culture and
management processes are attributed by the suggested information system used are discussed
with examples and Concluded.
2. Organizational Overview
McDonalds is the world's largest chain of burger fast food restaurants, serving more than 58
million customers daily. McDonalds is perhaps one of the fastest and rapidly growing fast food
chain restaurants in the world. In the year 1971 first McDonalds restaurant was opened in the
suburb of Sydney named Yagoona. Since then there are 780 McDonalds across Australia. In
Australia, 85,000 people are employed in restaurant and management offices. About 2/3 of the
MacDonalds restaurants are owned and operated by Franchisee. Franchisees are individuals who
have the right to use the companys trademark name and business model to do business.
(McDonalds Corporation, 2001)
The main goals of this Fast food chain restaurant are to provide good food with fun and friendly
services. All the McDonalds restaurant is based on three basic principles namely quality of
service, fast service and value for money.
There are basically 4 major work stations in Wentworth Ville McDonalds:
1. Front Area
This section of the restaurant serves people who walks in and orders food. The facilities
of eating in the dining room or take away both are provided. It operation hours is from
5am to 11pm.
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2. Drive through
This is one of the busiest sections of the restaurant. In this section, customers drive
through the lane. Their food order is taken, processed and delivered within a designated
period of time i.e. 2:45 minutes in case of this restaurant.
3. McCafe
This is a rather new concept introduced in McDonalds. Various types of coffee such as
cappuccino, latte, Mocha and bakery items are sold. The idea was Created and launched
in Melbourne, Australia in 1993 by McDonald's Licensee Ann Brown. Since then it is
followed in various parts of the world.
4. Back Area
This is the section where all the food materials are made. This section is always kept
clean and safe.
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Organizational structure
Store Manager
The store manager is the head of the organization. All the store operation including the staffs is
under the supervision of the store manager. The store manager handles the sales report, profit
and loss, safety and management as well as the supply and demands of the restaurant. The store
manager is also responsible for making rosters for the shift managers. The daily report of the
restaurant from shift manager is handed to the shift manager at the end of their shifts.
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Shifts Manager
There are several shift managers in the restaurant. The duty of the shift is to manage the crew
and assign them their tasks. All the shift managers are expected to ensure that customers are
served in the right way. In other words, the shift manager should always make sure that the
customer leaves the store with maximum customer satisfaction.
In addition to the above duties, each shift manager is assigned with one of the following task
Quality and Service
Training and performance management
Rostering and Recruitment of the crew
Finance management- handling payroll
Counseling manger
Product supply and demand management
Conflict management
Health and Safety management
Crew trainer
There are about 17 to 20 crew trainers depending upon the size of the store. Crew trainers are
appointed on the basis of their quality of the work and experience. The crew trainers apart from
doing their regular task are also assigned with the duty of training the new and existing crew.
They can be called as the mentors to the crews.
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Crew
The number of the crews in the restaurant depends from restaurant to restaurant. McDonalds
operating 24/7 and in a busy location can have almost 143-160 staffs. Their work in designated
in different work stations of the restaurant.
Food Products offered by McDonalds
As one of the leading fast food restaurant in the world, McDonalds serves verities of food
products. The food products offered by McDonalds differ from country to country depending
upon the cultures. Some of the most popular food products offered by McDonalds are, mostly
beef,
Big Mac
Quarter pounder
Grand and Mighty Angus
Ham burger and cheese burger
With time and increase in the popularity of chicken McDonalds also offers verities of chicken
made food products such as
Mc nuggets
Mc Chicken
Fish burger and many more
The following diagrams are some of the popular food products offered by McDonalds in
Australia are
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Big Mac
Mc Chicken
Chicken Mc nuggets
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The following flow chat shows the food products offered in Australia
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Business processes
In order to retain its title as one of the successful fast food chains in the world,
McDonalds has adopted various business processes and information system. These
business processes adopted by McDonalds has helped the organization thrive in the
current competitive market.
Business
Processes
and Description
Information system
Customer Service Management
McDonalds customer service management is well known

throughout the world. It has been recognized as one of the best fast
food businesses with excellent customer service history. Offering
food in a friendly manner is one of the prime objectives of
McDonalds.
Supply chain Management is one of the prime business processes
and information system that McDonalds carefully takes care of.
McDonalds supply chain is unique. Its supply chain model is based
Supply Chain Management
on a culture of partnership and collaboration which makes it

possible for them to serve consistently safe and high quality food.
With the help of SCM, McDonalds has become successful in
managing its relation with some of its vital suppliers like Coca cola
company, Uncle Tobys and many others.
E-Procurement is more than just a system for making purchases
E-procurement
online. A properly implemented system can connect companies and

their business processes directly with suppliers while managing all
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interactions between them. (Epiq technology, 2010). E-Mac digital

company is the E-procurement website which is jointly owned by
Mcdonalds and Accel-KKR Internet Co.
MacDonalds follow Just in Time JIT system of inventory
Inventory Management
management. They have the system of supplying products to

customers as soon as they have ordered for it, with minimal delay
between placing the order and getting it in hand. (Diwan P., nd)
Knowledge Management (KM) comprises a range of strategies and
Knowledge Management
practices used in an organization to identify, create, represent,

distribute, and enable adoption of insights and experiences.
McDonalds Knowledge management strategy has been given
credit for the success of MacDonalds.
Performance and Human Resource management has been adopted
Performance
and
Resource Management
Human by the MacDonalds for the management of the huge number of

staffs. Performance management has helped the company to notice
and acknowledge the work of the staff.
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3. Issue Analysis
It is of no doubt that the McDonalds is one of the leading Fast food chain Restaurants in the
world. However, it does face huge number of issues related to its business processes and
information system.
Among the various issues, the competition of MacDonalds with the other fast food restaurant is
fierce. Sandwich chain Subway has knocked McDonalds from its perch as the fast food king,
by having more restaurants around the world.
By the end of last year Subway had 33,749 outlets compared with the burger giants 33,737,
according to industry figures.(Mail online, 2010). The news of Subway taking over McDonalds
has definitely had a severe impact on McDonalds. Hence, this report focuses on how
McDonalds can improve and take over Subway and other competition by improving its different
information systems.
McDonalds has been known for its excellent set of business processes and information systems.
However, due to the rapid and fierce competition in the fast food business MacDonalds has to
embrace itself and further develop its information systems and business processes.
One of the major issue regarding implementing and upgrading its information system is the cost.
In order to understand the various factors effecting the implementation of the new information
system and upgrading the existing information system can been understood by doing the SWAT
analysis.
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The following table shows the SWAT Analysis of McDonalds that illustrates the issues related
to McDonalds
Strength
Weaknesses
Strong brand value sustains the companys

leadership position
Diversified geographic presence provides
opportunity to gain from economic
buoyancy in emerging markets
Large scale of operation
compared to peers
Opportunities
Legal proceedings affect brand image

adversely
Product failures such as Arch
Deluxe
Threats
Growth of franchisee operated restaurants

Positive outlook for out-of-home eating
Market can boost top line in long run
Growing hot drinks market - another
favorable trend to drive top line
Rise in the food prices

Intense in retail food industries
Growing
consumer
consciousness for healthy food products.
Source: McDonald's Corporation SWOT Analysis, Datamonitor Plc

Therefore, by keeping track of the above strength, weaknesses, Opportunities and Threats, the
information system can be implemented.
McDonalds is considered to be one of the most successful as well as famous brand in the whole
world. Improving the application of IT on the menu of corporate goals of the company is
considered
as
one
of
the
priorities
of
the
company.
(McGee,
2003)
The entire management information system or MIS of the company focuses on the three different
purposes of information such as the strategic that mainly focus on the key ratios, strategic plans
and marketing analysis that can help to analyze the current situation of the company that will
help for establishments of strategies. The technical information focuses on the variance analysis
and exception reports that help to compare the development of the company, based on past data.
Above all, the operational information pertains on the current information such as the invoice,
customer orders, stock records and sales (Edgar Online 2006).
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There is no doubt that McDonalds is considered as a global leader in terms of franchise

restaurants in the world. Many of the restaurants are being owned and control by owner-operator
and franchisees with the access to many of the global resources of the company such as
marketing, restaurant operations, real estate development, HR, training, learning and
development as well as quality control. Due to the said situation, the network of the owneroperators is so huge, and the information is so intense. That is the reason why the company is
having a difficulty in developing and maintaining their Intranet that will help to provide all the
groups regarding their needs (Flair Interactive 2006).
In order to solve that problem it will be important to redesign the intranet system of the company
that will implement the content management system of CMS that will help to maintain in
efficient and consistent manner the information across the site. Furthermore, it is also important
to consider the differences between the countries such as the language, connection speed as well
as personalized and customized information system (Flair Interactive 2006).
4. Analysis of Information Systems

4.1 Customer relationship management
CRM is broadly recognized, widely-implemented strategy for managing and development a
companys interactions with customers and sales prospects. It involves using technology to
organize, automate, and synchronize business processes, principally sales related activities, but
also those for marketing, customer service, and technical support. The overall goals are to find,
attract, and win new customers, nurture and retain those the company already has, entice former
customers back into the fold, and reduce the costs of marketing and customer service. CRM
gives the most value to customers by tightly integrating their sales, marketing and support
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efforts. CRM's primary objective is to provide the entire organization with a complete, 360degree view of the customer, no matter where the information resides or where the customer
touch-point occurs.
CRM involves gathering a lot of data about the customer. The data is then used to facilitate
customer service transactions by making the information needed to resolve the issue or concern
readily available to those dealing with the customers. This results in more satisfied customers, a
more profitable business and more resources available to the support staff. Furthermore,
Customer Relationship Management systems are a great help to the management in deciding on
the future course of the company (Hee-Woong, 2004).
(Figure: The four classic marketing activities of customer relationship management)
As mentioned, there is much data needed for the CRM system to work. These fields include the
customer name, address, date of transactions, pending and finished transactions, issues and
complaints, status of order, shipping and fulfillment dates, account information, demographic
data and many more (Ngai , E . W. T, 2005). This information is important in providing the
customer the answer that he or she needs to resolve the issue without having to wait for a long
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time and without going to several departments. With just a few mouse clicks, a customer support
representative for example can track the location of the customer's package or order. This is
infinitely better than the cumbersome process of tracking shipments previously. Furthermore, the
customer service representative will also be able to see the previous concerns of the customer.
This is a great help especially if the customer is calling about the same issue since he or she will
not have to repeat the story all over again (S. Cavanaugh, 2003). This results in less time in
resolving the issues, thus higher productivity of the support staff.
McDonalds is one of the largest food chain restaurants in the world. It serves more than forty
five million customers everyday across the world. It has outlets in nearly 121 countries
(Breitbart.com.2009). The purpose for selecting this particular company (McDonalds) is that it
has proved itself to be one of the successful entrepreneurs of the CRM strategies and it is still
maintaining that position. MacDonald is famous for its product customization. They can prepare
the product according to the customers choice. Due to its fast feeding with service and good
interaction with customer, Delivery speed, customer care and cleanliness are the core strengths
on which these stores expanded. It is the good entrepreneurs using Customer relation ship
management effectively so our team chose MacDonald.
Todays market customer is the key player and hence no companies can survive in the market
without fully satisfying them and that is the chief reason why management of MacDonald are
taking the concept of serving the customers seriously (Gartner, 2001). McDonald is working
hard to paint itself as a healthy, hip place to eat, offering wireless access in restaurants . Some
Customers trends change with time and so does their choices. People are generally tired of the
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same brands that they had been using over the years so Macdonald always brings new menu with
new test for those customers. The stores are well clean and fascinated with free wifi service for
customers. Taking order from outside of counter to avoid the queue and servicing the drivethrough order within 2 minutes really making customer service effectively. McDonalds are
of the opinion that maintaining a diverse work force will help in strengthening their system. The
diversification in work force makes the McDonalds unique from other fast-food stores.
Customer Relationship Management systems are used in MacDonald for the top management to
provide crucial data, like customer satisfaction and efficiency of service by the frontline crews. A
piece of customer relationship management software will be able to generate the needed reports
for product development or new concepts in MacDonald (Frown, P., 2005). Furthermore, this
system is helping for the top management in deciding the MacDonald future course of action,
whether it involves phasing out one of the products on the shelves or making adjustments to one
of the products sold. The reports generated by CRM systems are also invaluable to MacDonalds
advertising and marketing planners, as they are be able to pinpoint which ideas works and which
do not. Because of CRM systems, The Company is able to release advertisements or plan
marketing campaigns more in tune with your target market. This is leading to more responses to
MacDonalds advertisement and a more effective marketing campaign. Order tracing system use
database technology to allow customers to determine the status of every order. Similarly data
mining tools are using to analyze data gathered through the other components of CRM system.
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Fig: Three key phases of CRM

(Source: http://marketingteacher.com)
MacDonald is using its Customer relationship management system not only for profit alone. It is
done to Gain new customers, retains existing customers and extends the level of existing
customers. To gain customers MacDonald is attracting new customers and the increasing the
growth in the market. It involves introducing attractive offers and discounts to the consumers,
bringing new product in the market and offering best customer service and quality. By
withholding the existing customers with them and making them to buy their product again and
again. It involves giving exclusive promotional offers to the existing customers to boost their
sales, MacDonald able to retaining the existing customers. Similarly to extend the level of
existing customers, it is introducing new products to the existing customers and making them a
customer of that product, it involves creating innovative ideas and also collecting the details of
the customers past data or buying habits, in order to suggest future products. MacDonald
Practices best CRM include branding itself, building trust, understanding the customers, and
being consistent and McDonalds is the ultimate example of consistency. Nowadays some of the
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MacDonalds are using call centers to take customers' orders ahead of time. Just order, then head
to the restaurant, pick up and pay and drive away. An effective CRM system of MacDonald are
providing complete and consistent customer information so sales and marketing are tightly
integrated. It allows customer service to manage client relationships and expectations.
In todays commercial world, practice of dealing with existing customers and thriving business
by getting more customers into circle is predominant (Orgad, M. 2000). Installing a CRM system
can definitely improve the situation and help in challenging the new ways of marketing and
business in an efficient manner for any business that might be MacDonald, KFC or subway.
Hence in the era of business every organization should be recommended to have a full-fledged
CRM system to cope up with all the business needs. I think MacDonald is using its Customer
service management system as much as they can to gain, retain and extend customers than other
competitors like KFC, Subway and other fast-food companies
4.2 Knowledge Management

Knowledge Management (KM) comprises a range of strategies and practices used in an
organization to identify, create, represent, distribute, and enable adoption of insights and
experiences. Knowledge Management efforts typically focus on organizational objectives such
as improved performance, competitive advantage, innovation, the sharing of lessons learned,
integration and continuous improvement of the organization.
KM is to discover, develop, utilize, deliver, and absorb knowledge inside and outside the
organization through an appropriate management process to meet current and future needs. Ouintas
et al. (1997) KM is a process that helps organizations find, select, organize, disseminate, and
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transfer important information and expertise necessary for activities. Gupta et al. (2000) KM is
getting the right information to the right people at the right time, helping people create knowledge
and sharing and acting on information. Holm (2001)
Mc Donald is the organization that uses the knowledge management technique to serve the
customer and as well as to keep up-to-date with the daily activities. Knowledge management
technique helps the organization to communicate with other employees, with corporate office
and helps to improve the service. First the organization develops a working definition of
knowledge. Then the upper management develops the knowledge management according to their
business strategy. Then the upper management does the knowledge audit. Which helps to link the
knowledge management with the business strategy. Then the organization defines the objective.
Then it is communicated with the staff and starts implementing the strategy. In term of
implementation part, Mc Donalds established AccessMCD as a part portal and part content
integration layer to give access to the core document repositories. The tool has improved the
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organizations digital asset management capabilities and has provided a single source of
corporate information
Mc Donalds not only enhanced the content management, but also improved KM process. As Mc
Donalds is a multinational corporation, there were regional language variations for same
product which caused communication inefficiency. Therefore, a global taxonomy has been built
and information has been categorized in detailed level to solve the problem. Two-level search are
provided to allow user perform searches in core document repositories and micro sites.
Moreover, some level of workflow automation is available with the system. If corporate authors
indicate that the documents need translation, those documents will be automatically routed to
translators. The time and labor cost are saved. (Voelker, 2005).
Mc Donalds Knowledge Manager allows to share information from the website or Intranet with
an enterprise-grade knowledge base, reducing customer support, improving staff productivity
and eliminating time wasted searching for information across disparate systems such as shared
folders and paper documents.
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The functions of Mc Donalds Knowledge management software are as below:
Reduce in-bound customer support. The web-based self help interface makes it easy
for customers to find answers to their own problems instead of submitting emails or
calling your support department. Mc Donalds knowledge management software also
integrated the contact/support forms to provide instant answers to customer's questions as
they type, reducing support even further.
Share company documents and procedures. Whether the staff are in one physical
location or one hundred, Mc Donalds Knowledge software makes it easy for them to
share, search, rate and print company documents, procedures and more. Now everyone
has access to the same single version of a document from the same location.
Eliminate staff training time. By providing new staff members with a list of companywide policies, procedures and how-to guides helps to learn quickly. It reduces staff
training time significantly and give new staff members a "hands on" approach to learning.
Mc Donalds Staff, customers and partners can access information locally or over the Internet.
Knowledge management software in Mc Donald is a powerful group-based permission
architecture which makes it easy to share knowledge with only the people or groups that the
organization choose. The current use of knowledge management technique has the following
benefit for the organization:
Features to reduce customer support:
A completely web-based self-help system
Categorize information by area, product, etc
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Built-in feedback loops help your staff improve knowledge items based on customer
input
Customers can store their own favorites list
Popular search terms make it easy to find help fast
Active Response System integrates into any website form
Customers can easily search knowledge items and attachments (Microsoft Office and
PDF)
Features to make sharing company documents and procedures easier:
Accessible through any computer with a web browser
Categories can be password protected and restricted
Built-in feedback loops help your staff improve knowledge
Revisions are created and saved automatically when an item is updated
Popular search terms make it easy to find help fast
Before the establishment of central repositories, Mc Donalds was facing problem of content
replication. It was because the content and the platform were developed separately by
independent franchisees and business partners from different countries and locations. It caused
many problems to Mc Donalds, including different version of documents and images for same
products, competing platforms which reduce efficiency, and heavy burden on network bandwidth
due to large amount of communication. Thus, core repository was developed to improve content
consistence and platform consistence. (Voelker, 2005).
Mc Donald has implemented the knowledge management in a proper way in the organization
which has helped the organization in long term. As a result customer are happy as they are
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getting instantly from the organization. Other companies in the food industry are able to make
their assets available online by applying new KM tools to their business. In 2001, the KFC
company create a KM system which allowed its staff to make access to the resources. The
system consisted of still images, videos and documents for staff. The system functioned as a
business tool enabling the company staff from 200 countries to work collaboratively on new
projects at the same time as well as launching projects globally. Mc Donalds KM is also helping
the organization. Problems in the past including communication errors, limited working
efficiencies and a lack of knowledge to the assets of the Mc Donald were solved with the help of
KM system. It helped the company transfer its tacit knowledge into explicit knowledge. The use
of KM theories also helped beverage companies reduce their costs and make it a competitive
advantage for their business. One case about the dairy industry in Australia involved some food
poisoning incidents caused by dairy products. At that time, it was commented that there is lack
of enforcement of food standards by the states and territories.(Soliman,2000) Therefore, the use
of Hazard Analysis Critical Control Point (HACCP) has been suggested which is a KM tool, to
deal with the food safety problems. Dairy companies using the HACCP were able to make the
quality of their products more transparent. As a result, this KM tool helped dairy companies
improve the quality of their. Mc Donald has also introduced this KM tools which helps them to
keep the track of food standard.
The establishment of KM portal has improved the situation for the organization. It greatly
reduced manipulation of large amount of data and faxes across different offices. Physical
traveling has also be reduced. Besides, customers can access information through the Customer
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Community Portal (CCP) and the communication with customer has been improved. Besides, the
CCP is successful in fostering communication and building relationship.
4.3 E-Procurement and McDonalds

E-procurement is
the
business-to-business or business-to-consumer or Business-to-
government purchase and sale of supplies, Work and services through the Internet as well as
other information and networking systems, such as Electronic Data Interchange and Enterprise
Resource Planning (Laudon and Traver, 2007). Just as e-distributors provide products to other
companies. E-procurement firms create and sell access to digital electronic markets. B2B service
providers make money through transaction fees, fees based on the number of workstations using
the service, or annual servicing fees. (Laudon and Traver, 2007).
E-procurement is a website that allows qualified and registered users to look for buyers and
sellers of goods and services.
McDonalds e-procurement system is the main reason for their successful supply chain
management. It is so efficient that it provides the backbone not only to all logistics but the whole
McDonalds supply chain management.
There are 7 types of E-procurement
1. Web based ERP
Creating and approving purchasing requisition, placing purchase orders and receiving goods and
services by using a software system based on internet technology.
2. e-MRO (Maintenance, repair and over haul)
3. e-Sourcing
It identifies new suppliers for a specific category of a purchasing requirements using internet
technologies
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4. e-tendering
Sending requests for information and prices to suppliers and receiving the responses of suppliers
using information technologies.
5. E-reverse Auction
Uses internet technologies to buy goods and services from a number of known and unknown
suppliers.
6. e-informing
Gathering and distributing purchasing information.
7. e-Market sites
Web-based ERP to open up value chains
Some of the advantages of the E-procurement are
reduced transaction costs, in an area of the total spend that dwarfs what's spent on
indirect goods
reduction of stocks of obsolete products and inventory for those products, owing to more
timely reaction of supply to demand
Reduced levels in general, through reduced cycle times quicker reaction to

changing market trends enabling a manufacturer to gain competitive edge in new
product development.
redeployment of procurement and other professionals away from transaction processing

activities toward work that is more strategically important such as global market research
and analysis, long term negotiations with strategic suppliers, supplier development
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and researching of new technology tools that can elevate procurement and supply chain
management performance
Centralized tracking of transactions enables full reporting on requisitions, items

purchased, orders processes and payments made. E-procurement advantages extend to
ensuring compliance with existing and established contracts.
Source: Shum online purchasing desk handbook on procurement.
McDonalds is the emblem of globalization. It employs about 1.5 million people and is one of
the largest fast food chains, serving 47 million customers daily.(Diwan, 2010). Therefore, to
procure various services and product, McDonalds required an excellent and fast e-Procurement
system.
As a solution, McDonalds partnered with eMac digital. The procurement hub was launched by
eMac Digital, an incubator jointly owned by McDonald's and Accel-KKR Internet Co in the year
2001. (Clark and Philip B, 2002). This procurement hub allows all of the McDonalds franchises
across the globe to buy everything needed run their restaurants from uniform to ham burger.
Apart from being faster and more convenient for franchises, the procurement site will also allow
business owners to buy supplies and materials at a discounted rate, ultimately reducing costs for
McDonalds. (Dilawar, nd)
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Global Franchise
Place orders
E-Mac
Supply
received
Digital
Suppliers
Logistics
Figure: McDonalds e-procurement model

Source: Dilawar J (n.d), McDonalds e-Procurement
The above diagram illustrates the basic e-procurement managed by E-mac digital.
In the process of procuring a product, a typical McDonalds franchise
1.
restaurant places an order through E-Mac digital website.

2.
The order is sent to the suppliers. Suppliers order is processed and managed
by the logistics.
3.
The logistics sends the order of the products to the franchise restaurants. It is
the responsibility of the Emac and logistics that the products are sent to the restaurant.
4.
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All the above, steps are handled and executed by the E-MAC digital.
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Hence, McDonalds e-Procurement system is a well organised procurement system, where

thousands of restaurant worldwide rely on it.
4.4 Supply Chain and Logistic Management Definition

Supply chain refers to the flow of materials, information, payments, and services from raw
material suppliers, through factories and warehouses, to the end customers. (Turban,
Mclean,Wetherbe, 2004). It includes the organizations and processes that create and deliver
products, information, and services to the end customers. The entire process of supply chain is
compose of two stages : upstream supply chain and downstream supply chain. The transactions
between an organization and its suppliers and intermediaries is upstream supply chain while the
transactions between organization with its customers and sell-side intermediaries is referred to as
downstream supply chain (Turban & Mclean & Wetherbe, 2004).
About McDonalds
McDonalds is a fast food franchise which falls under Quick Serve Restaurant (QSR) group. The
effectiveness and success of the business highly depends on the supply chain and logistics
management of the food products and ingredients. Supply chain refers to the flow of materials,
information, payments, and services from raw material suppliers, through factories and
warehouses, to the end customers (Turban, Mclean,Wetherbe, 2004). It includes the
organizations and processes that create and deliver products, information, and services to the end
customers. The entire process of supply chain is composed of two stages : upstream supply chain
and downstream supply chain. The transactions between an organization and its suppliers and
intermediaries is upstream supply chain while the transactions between organization with its
customers and sell-side intermediaries is referred to as downstream supply chain (Turban &
Mclean & Wetherbe, 2004).
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Fig 1 : A model of Supply chain management
Supply chain business process integration involves collaborative work between buyers and
suppliers, joint product development, common systems and shared information(). Supply chain
management issues are of prime importance to McDonalds as it deals with continuous chain of
the purchasing raw food materials and other packaging needs, process it into value added
products and delivers it to the customers daily. McDonalds is a multinational firm and their
subsidiary companies are throughout the world hence, an optimized, perfectly managed global
supply chain system is most essential to standardized and correlate universally.
One of the most important subset of supply chain management is logistics management. Supply
chain management focus on the overall integration of business functions and the supplies from
suppliers to stores and customers, while, logistics management focus on how those items and
data are being transported and disseminated and supports the overall supply chain management.
Logistics management is key to supply chain management planning because it helps to determine
the effectiveness and efficiency that effects the topline and bottomline of a business().
According to Council of Supply chain professionals Logistics Management is that part of Supply
Chain Management that plans, implements, and controls the efficient, effective forward and
reverse flow and storage of goods, services and related information between the point of origin
and the point of consumption in order to meet customers requirement.
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Supply chain processes in McDonalds

According to Walters and Rainbird, McDonalds was one of the pioneers of both efficient and
effective supply chain management and of marrying these with traditional marketing techniques,
fostering a whole new category of food retailing(2004).
i. Organizing production
According to Chen, Organizing production process improves the communication of
McDonalds amongst suppliers, enterprises and customers and removes the
difficulties of production management.
ii. Stock Management
According to Chen, McDonalds follows stock management process to smooth the
flow of information between enterprises at their suppliers. By using e-supply chain
management solutions, McDonalds gather information about the sales and future
demand.
iii. Match delivery and transportation management
Delivery and Transportation management is a crucial chain in the supply chain
management process. McDonalds integrates the total supply chain by monitoring the
consignments and tracing the transportation of the goods.
iv. Inventory management

With the help of e-supply chain, McDonalds can communicate with each other about
the inventory, such as the information of orders delayed and stock status thus
reducing the inventory cost and enhancing the efficient utilization of their
warehouses.
v. Customer Service
Customer service process belongs to the downstream supply chain process where
McDonalds takes care of customers and their needs. McDonalds comes in one of the
highest rating restaurants in customer care.
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Source:
http://marketingplanbook.com/2010/02/22/marketing-strategy-supply-chain-
management/
According to the diagram above it can be understood that logistics deals with the transportation,
warehousing, data transfer and manpower utilization. It adds to the value to the chain of products
as shown in the diagram below.
Logistics management in McDonalds

McDonalds the supply chain is basically focused on the upstream supply chain processes as all
the food products and paper cardboards have to be procured through various levels. The
downstream supply chain is just the end customers. Supply chain management issues are of
prime importance to McDonalds as it deals with continuous chain of the purchasing raw food
materials and other packaging needs, process it into value added products and delivers it to the
customers daily. McDonalds is a multinational firm and their subsidiary companies are
throughout the world hence, an optimized, perfectly managed global supply chain system is most
essential to standardized and correlate universally.
Fast food logistics requires three special abilities. First of all it requires reliability, secondly it
requires quickness. And thirdly the most special one fast food logistics requires temperature
control. As you see logistics in the food industry is a big challenge().
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Logistic standards
The logistics standards followed in McDonalds are
i. Distributor Quality Management process
ii. Operations and Customer relations
iii. Quality Control (HACCP / QIP)
iv. Cold chain standards
v. Hygiene Regulation
vi. Product Handling Standards
vii. Emergency and contingency plan
viii.
Risk and Crisis management
Logistics management activities typically include inbound and outbound transportation

management, fleet management, warehousing, materials handling, order fulfillment, logistics
network design, inventory management, supply/demand planning, and management of third
party logistics services providers.
Logistics Processes
Among the various processes followed for business logistics three of the major processes for
McDonalds are described below.
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Transportation process:
i. The DC receives items from different parts of the country. These items are store in room
with different temperature zones and are finally dispatched to various McDonalds
restaurants on the basis of their requirements.
ii. The company has both the cold and dry storage facilities with the capability to store
products up to 22 degree C as well as delivery trucks to transport produces at
temperatures ranging from room temperatures to frozen state
iii. The specially designed trucks maintain the temperature in the storage chamber
throughout the journey.
Inventory maintenance process:
i. MacDonalds follow Just in Time JIT system of inventory management. They have the
system of supplying products to customers as soon as they have ordered for it, with
minimal delay between placing the order and getting it in hand.
ii. McDonalds use pre-cook batch of hamburgers and let them sit under heat lamps and
cook just in time when it is need as the customer orders for it.
Warehousing processes:
i. McDonalds uses eStore Logistics service in Australia for its warehousing logistics needs.
eStore Logistics Pty Ltd (http://estorelogistics.com.au) is an Australian based
logistics firm that delivers unrivalled warehousing, pick and pack, distribution and
international freight forwarding services to both online businesses and traditional
bricks and mortar businesses at highly competitive rates.
ii. eStore Logistics have a highly sophisticated warehouse management system (WMS) that
can be easily customized for specific business requirements.
Data Transfer processes:
These processes add value in each step to the products delivered by McDonalds. While the
supply chain of McDonalds at first glance appears simple, its diverse components are both
critical and multi-layered. Food ingredients are supplied by two categories, Tier-I and Tier-2
suppliers. Tier-2 suppliers comprise growers and processors who include importantly, lettuce and
potato growers, poultry farms and companies which manufacture coating systems that coat the
vegetable and chicken patties. The ingredients are supplied to Tier-I suppliers who process them,
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for instance, into vegetable and chicken patties this is done by Vista Processed Foods Pvt.
Ltd. or potato products like French fries, potato wedges and hash browns which are expertly
churned out by McCain Foods India Pvt. Ltd.
5. Details Analysis of suggested Systems

From the section above, we proposed McDonalds to use and/or improve the existing systems to
improve its business. The report talks about the use of Customer Relationship Management
techniques used by McDonalds and it most popular full customization of the burgers and wraps
as per the customer choice. Due to its fast feeding with service and good interaction with
customer, Delivery speed, customer care and cleanliness are the core strengths on which these
stores expanded.
Customer Relationship Management is the most vital aspect of McDonalds business. Thus CRM
softwares are used to gather information about the number of customers buying from a
particular store per day and to provide crucial data, like customer satisfaction and efficiency of
service by the frontline crews.
The second Information system, the report describes is Knowledge Management System. As
mentioned in the report earlier KMS is a process that helps organizations find, select, organize,
disseminate, and transfer important information and expertise necessary for activities.
As
mentioned in the Knowledge management section of the report, In McDonalds Knowledge

management is used for reducing in-bound customer support, share company documents and
procedures and eliminates staff training time. Mc Donalds uses AccessMCD as a part portal
and part content integration layer to give access to the core document repositories and improved
organizations digital asset management capabilities.
The procurement system as mentioned by Lauden and Traver is the business-tousiness or business-to-consumer or Business-to-government purchase and sale of supplies, Work
and services through the Internet as well as other information and networking systems, such as
Electronic Data Interchange and Enterprise Resource Planning.
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6. Organizational Impact of Recent Systems

Information technology (IT) is dramatically changing the business landscape. Mc Donalds
operation has changed with the use of the information system. Using the CRM, Knowledge
management, SCM and E-procurement has helped the organization to move forward. Mc
Donalds cultures and business strategies has used the
recent systems to capture the market.
These systems significantly affects strategic options and creates opportunities and issues that
managers need to address in many aspects of their business. Following are some of the key
impacts of recent systems and the implications for management on:
Business strategy - collapsing time and distance, enabling electronic commerce
Organization Culture - encouraging the free flow of information
Management Processes - providing support for complex decision making processes
Work - dramatically changing the nature of professional
Faster Check out: Helped to serve the customer quickly
Auto Bag: Helps to run the CRM system.
Mc Internet: A new approach to acquire customer through KM strategy.
Business Strategy
IS systems has creates new opportunities for innovation in products and services. The CRM
system has created new era which helps to maintain a good relation with the customer. Not only
that but also it helps to understand the customer and helps to determine the needs of the
customer. Some of the key issue that creates a impact on business strategy are :
simultaneity: making information instantly available in several
time extension: offering 24 hour a day; 365 days a year service
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portability: taking service and products closer to the user
reusability: using information captured for different purpose
Organization Culture
Newer types of information system such as electronic mail and groupware have created
significant changes in the way that information flows around group ware, and between them and
their customers and suppliers. The use of knowledge management has made it easy. So the
culture of the Mc Donald organization has changed dramatically. As a result members in
different store can communicate easily. Also the use of SCM helps to order foods and receive
with a click of a button. No paper works needs to done only updating the system help to send a
delivery request to the supplier.
Management Processes
IS in Mc Donald has supported the management processes in a highly reutilized business
processes. It has provided more effective ways of accessing information from multiple sources,
including use of external information on databases and the Internet. With the help of CRM and
KM the staff can access the resources of the company. Also group decision support systems that
operate in a meeting room environment helps in enhancing decision making for the company.
Work
IS systems has dramatically changed the nature of professional work for Mc Donald. There are
few offices where professional do not make use of personal computers, and in many jobs
involving extensive information and knowledge based work, the use of the computer is often a
core activity. MC Donald effectively using the IS systems which helping the organization in term
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of organizing, thinking, researching sources, accessing information, connecting to experts,

communicating ideas and results.
Faster Checkout
For McDonald's, not only every minute, but every second counts when serving a customer.
Customers are drawn to the eatery for fast, low cost food. The faster checkout has been done
with the use of dedicated CRM Software. The food choices are consistent at each location and
combined with the easy to retrieve packaging makes the drive-thru a staple in the lives of busy
workers and on-the-go families. Also the company first introduced electronic card payment
options in 2002. It has now introduced a method to pay for orders at a rate that beats cash-based
transactions.
AUTO Bag
Another feature that has added "fast" to McDonald's already fast-food is the auto bag. Small
gains in order accuracy have been realized with new technology such as digital wireless
headsets, customer order displays, and timer systems. The auto bag helps to improve the
delivery of order accuracy-after the order is taken. This auto bag is a part of KM system.
Mc Internet
McDonald's has attempted to decrease the country's digital divide by offering free internet access
to its customers. Offering free internet is a KM strategy. The first country in South America to
have one, Brazil, currently has a well-established presence with 600 locations. The McInternet
mission, lead by the head of IT at McDonald's is merely a collection of computer kiosks
connected to the Internet inside the restaurant. The project's key motivation was the increase in
traffic and the connection of the McDonald's brand with the younger generation and technology.
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Risk associated
The risks associated with the overall success of systems for Mc Donald were application
complexity, lack of user experience, and lack of role clarity of role definitions of individuals on
the project. Lack of user support was significant for the organizational impact, while
technological newness affected system quality satisfaction for Mc Donald. Some of the risk are
as below:
Integrating IT and Business Planning - The IT strategy should support the business
strategy and vice versa. When ever Mc Donald has introduced new IS system it had some
risk associated with it. It had to go through research. Which was done by hybrid member
through new planning processes.
Addressing Culture Issues - The dimensions of existing and desired culture need to be
understood and how proposed systems will affect them. Mc Donald couldnt use any
systems which will not reflect their culture. Using the online ordering system will not
work.
Developing New Skills - more of managers in Mc Donald have limited knowledge. But
they need to become hybrid managers, combining the knowledge and skills of general
management, their own discipline and IT.
Introducing Knowledge Management and Innovation - going beyond information to

developing networks of knowledge experts in Mc Donald was challenging. But they have
overcome and evolved the organization's knowledge assets which created extra
capabilities and value.
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7. An overall analysis of organization

McDonalds has its excellent set of business processes and information systems that are
supporting its business process. A functional business information system like CRM, SCM, KM
etc support the business functions of marketing, production, accounting, finance, and human
resource management through a variety business operational and management practices (Frown,
P., 2005). In order to retain its title as one of the successful fast food chains in the world,
McDonalds has adopted various business processes and information system long time ago and it
upgrades its information system frequently. These business processes adopted by McDonalds
has helped the organization thrive in the current competitive market. In MacDonald there are
many important information systems that are helping to achieve production, quality and good
customer service among other competitors like KFC, subway, hungry jacks etc.
Fig: Ranking of Most preferred fast food

(Source: Experian Simmon, 2009)
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MacDonald has excellent Customer relationship management than KFC and Subway. This
system is helping for the top management in deciding the MacDonald future course of action,
whether it involves phasing out one of the products on the shelves or making adjustments to one
of the products sold. The reports generated by CRM systems are also invaluable to MacDonalds
advertising and marketing planners, as they are be able to pinpoint which ideas works and which
do not. Also CRM is able to gain new customers, retains existing customers and extends the level
of existing customers in Macdonald. This effective CRM system of MacDonald are providing
complete and consistent customer information so sales and marketing are tightly integrated than
other fast-food restaurant. It allows customer service to manage client relationships and
expectations. Another information system also effectively supporting MacDonalds business
process, which is SCM. Supply chain management issues are of prime importance to
McDonalds as it deals with continuous chain of the purchasing raw food materials and other
packaging needs, process it into value added products and delivers it to the customers daily. By
using e-supply chain management solutions, McDonalds gather information about the sales and
future demand and With the help of e-supply chain, McDonalds can communicate with each
other about the inventory, such as the information of orders delayed and stock status thus
reducing the inventory cost and enhancing the efficient utilization of their warehouses which we
cant find in KFC and Subway. Knowledge management system of Macdonald is effectively
supporting their business process. Mc Donald is the organization that uses the knowledge
management technique to serve the customer and as well as to keep up-to-date with the daily
activities. Knowledge management technique helps the organization to communicate with other
employees, with corporate office and helps to improve the service. Mc Donalds Knowledge
Manager allows to share information from the website or Intranet with an enterprise-grade
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knowledge base, reducing customer support, improving staff productivity and eliminating time
wasted searching for information across disparate systems such as shared folders and paper
documents so in the case of Knowledge management Mac Donald is better than KFC and
Subway. McDonalds e-procurement system is the main reason for their successful supply chain
management. It is so efficient that it provides the backbone not only to all logistics but the whole
McDonalds supply chain management.
Conclusion:
In order to retain its title as one of the successful fast food chains in the world, McDonalds has
adopted various business processes and information system long time ago and it upgrades its
information system frequently. McDonalds has been known for its excellent set of business
processes and information systems. In Mc Donald the use of CRM involves gathering a lot of
data about the customer. The data is then used to facilitate customer service transactions by
making the information needed to resolve the issue or concern readily available to those dealing
with the customers. Also McDonalds Knowledge management is used for reducing in-bound
customer support, share company documents and procedures and eliminates staff training time.
E-procurement is useful for the organization which improving the work and services through
the Internet as well as other information and networking systems, such as Electronic Data
Interchange and Enterprise Resource Planning.
Mc Donalds operation has changed with the use of the information system. Using the CRM,
Knowledge management, SCM and E-procurement has helped the organization to move forward.
Mc Donalds cultures and business strategies has used the recent systems to capture the market.
These systems significantly affects strategic options and creates opportunities and issues that
managers need to address in many aspects of their business. Following are some of the key
impacts of recent systems and the implications for management on. The impact of the suggested
system and risk associated on utilizing the systems will be benefited. Various positive impacts on
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business structure, organization culture and management processes are attributed by the
suggested information system used will be concluded. Knowledge management system of
Macdonald is effectively supporting their business process. Mc Donald is the organization that
uses the knowledge management technique to serve the customer and as well as to keep up-todate with the daily activities. Knowledge management technique helps the organization to
communicate with other employees, with corporate office and helps to improve the service. Mc
Donalds Knowledge Manager should allows to share information from the website or Intranet
with an enterprise-grade knowledge base, reducing customer support, improving staff
productivity and eliminating time wasted searching for information across disparate systems
such as shared folders and paper documents so in the case of Knowledge management Mac
Donald is better than other companies.
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Reference
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Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Quality and Service

Training and performance management

Rostering and Recruitment of the crew

Finance management- handling payroll

Product supply and demand management

Health and Safety management

Analysis of Mc Donalds Information systems

Fish burger and many more

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

McDonalds customer service management is well known

Supply Chain Management

on a culture of partnership and collaboration which makes it

online. A properly implemented system can connect companies and

Analysis of Mc Donalds Information systems

interactions between them. (Epiq technology, 2010). E-Mac digital

management. They have the system of supplying products to

practices used in an organization to identify, create, represent,

Human by the MacDonalds for the management of the huge number of

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Strong brand value sustains the companys

Legal proceedings affect brand image

Growth of franchisee operated restaurants

Rise in the food prices

Source: McDonald's Corporation SWOT Analysis, Datamonitor Plc

Analysis of Mc Donalds Information systems

There is no doubt that McDonalds is considered as a global leader in terms of franchise

4. Analysis of Information Systems

Analysis of Mc Donalds Information systems

(Figure: The four classic marketing activities of customer relationship management)

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Fig: Three key phases of CRM

Analysis of Mc Donalds Information systems

4.2 Knowledge Management

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems

The functions of Mc Donalds Knowledge management software are as below:

A completely web-based self-help system

Categorize information by area, product, etc

Analysis of Mc Donalds Information systems

Customers can store their own favorites list

Popular search terms make it easy to find help fast

Active Response System integrates into any website form

Features to make sharing company documents and procedures easier:

Accessible through any computer with a web browser

Categories can be password protected and restricted

Built-in feedback loops help your staff improve knowledge

Revisions are created and saved automatically when an item is updated

Popular search terms make it easy to find help fast

Analysis of Mc Donalds Information systems

Analysis of Mc Donalds Information systems