Lovely professional University

ASSIGNMENT OF OPERATION MANAGEMENT Submitted to

Mr. Amit Dutt

Submitted by
RAJU SAW
Roll no:B49

Registration no:- 11004488 Section:- Q3002

The Indian McDonalds

Introduction
In India McDonalds was started in 1996 in a unique way. The company got into a 50:50 joint venture with Delhi based entrepreneur Vikram Bakshis Connaught Plaza Restaurant to own and operate McDonalds restaurants in northern parts of the country and other is Mumbai based Amit Jatia and his Hardcastle restaurants were choosen for to operate Mcdonalds restaurants in the western part of . In north India Mcdonalds has 61 outlets and plans to open another 25 outlets in next 3 years. These outlets are considering by Bakshi as the franchisee model for Mcdonalds north India operations. Mcdonalds India is planning to increase the numbers of its restaurants from 107 to 169 all over the country. In India every year Rs.500 billion worth of food produce is wasted, this is mainly due to the lack of proper infrastructure for storage and transportation and controlled condition. Also one third of the 150 million tonne production of fruits and vegetables is lost at the post harvest stage. Most of it attributed to wastage in storage and transportation ,mishandling, and cost of intermediaries in the supply chain. The cold chain is necessary to maintain the quality of food products and retain their freshness nutritional value. A cold chain refers to the procurement, warehousing, transportation of food products under controlled temperature. According to Indian government regulation McDonalds follow the standards on food, health and hygiene while continuously maintaining McDonalds recognised standards. McDonalds Quality inspection programme (QIP) carries out quality checks at over 20 different points in the cold chain system. Setting up of the cold chain has also enable it to cut down an operational wastage. The companys hazard analysis critical control point (HACCP) is a systematic approach to food safety emphasizes prevention within McDonalds supplier facility and restaurants rather than detection through inspection of lines or presence of below quality food. The HACCP verification is done at least twice in a year and certified. McDonalds expends in India, suppliers get the opportunity to expand their business have access to the latest in food technology and advance agriculture practices; and the ability to grow or to export. There are many local suppliers operating out of small towns who have benefited from there association with McDonalds India. These are:-

1). Trikaya Agriculture Trikaya Agriculture has enabled to implementation of advanced agricultural practices to successfully grow specially for corps such as iceberg lettuce, special herbs, and many oriental vegetables. Mcdonalds buys a third of its 450 tonne annual requirement from trikaya. It accepts good quality material, so suppliers have to minimize rejections. 2). Vista Processed Foods Pvt Ltd. Vista Processed Foods produces a range of frozen chicken and vegetable foods. There have a separate processing lines for chicken and vegetable foods, an capability to produce frozen foods at temperature as low as -35 degree celcius to retain total freahness. Vista with its state of the art plant, provides 20-30 per cent of Mcdonalds total purchase of processed food. 3). Dynamix Diary Dynamix has brought immense benefits to farmers in Baramati, maharshtra by setting up a network of milk collection centres equipped with bulk coolers, Easy accessibility has enabled farmers to arguments their income by finding a new market for surplus milk. Dynamix Diary has fully automatic international standard processing facility and capability to convert to milk into cheese, butter/ghee, skimmed milk powder, lactose, casein and baby food. While Modern Dairy and Amul provide the paneer, the cheese is made by dynamix, which has setup a separate line of McDonalds. 4). McCain Foods McDonalds had a troublesome learning experience in sourcing the right kind of potatoes for its fries in India. McDonalds has continued to import around 1200 tonnes of potatoes every years for French fries from New Zealand, it is a partnered with its main global suppliers, McCain Foods, the world largest French fries company. The Indian potatoes crop was not good because farmers used seeds from the preceding crop. As the result the qualities of Indian potatoes are poor. 5). Radhakrishna Foodland Radhakrishna Foodland the entire range of services including procurement, quality, inspection, storage, inventory management, deliveries, data collection, recording, and reporting. The strength of this company are:- a one- stop shop for all distribution

management services, dry and cold storage facility to store and transport perishable products, effective process control for minimum distribution cost. It also provide each truck has three level of variable refrigeration, and size of each refrigerated compartment can be varied according to need.

McDonalds Operation Strategy in India (Analysis)

McDonalds utilizes an excellent operations strategy in order to gain a larger market share and increase value to the shareholders. The corporation specifically focuses on speed, standardization, quality, and affordability. McDonalds competes on three main bases, such as speed, affordability, and standardization, mainly to make their customers happy. Therefore, McDonalds vision aims to provide fast, friendly and accurate service. McDonalds realized that specific targets are necessary to measure the performance of speed; from the customers order, to the making of the burger, and till the customer leaves the restaurant, speed is a key factor in McDonalds operation strategy. To reduce the amount of time it takes to provide services, the company uses standardized training processes for its employees and new drive-thru layouts. Along with speed, McDonalds also competes by offering prices at a low cost. To offer high quality products at low cost requires efficient processes throughout the entire McDonalds organization. One strategy that the company has employed for many years is the value meal. The value meal allows customers to buy a sandwich, French fries, and beverage at a discount when purchased together. McDonalds restaurants offer value meals for both their lunch and breakfast menu from seven to twelve. In this case there are also discussed about different operation strategy like:1). McDonald's Supply Chain Management McDonald's has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level. In India supply chain is common for both North and West India managed by Vikram Bakshi and Amit Jatia. The processed food is taken to RKFLs two distribution centres at Thane near Mumbai and Noida near Delhi.

2). McDonald's food is prepared properly. McDonalds Serving the customers great tasting, high quality food is top priority. All menu items at McDonald's are prepared for customers under a carefully monitored process using specialised equipment. For example, McDonalds conduct a series of tests and restaurant audits every day to ensure that procedures are being followed and high standards are being met. 3). McDonald's providing a quality meal. McDonalds India serves the highest quality products. The attention to food quality started long before the first restaurant opened. McDonalds India has established close relationships with local suppliers who provide McDonalds with the highest quality and freshest ingredients to make its products. 4). freshness and safety of the products McDonalds has established an extensive cold chain distribution system in India to ensure that the products that arrive at the restaurant from suppliers all over India are absolutely fresh. In the restaurants, products and supplies are used on a first-in, first-out basis to ensure freshness. All McDonalds products are prepared using the most current state-of-the-art cooking equipment to ensure quality and safety. On an average 20 different quality checks are carried out before any product is served to our customers. 5). Unique cold chain In McDonalds RK Foodland provides dry and cool storage facility to store and transport perishable products at temperature up to -22 degree Celsius and effective process control for minimum distribution cost. Their design contributes to lower McDonalds supply chain cost. Each truck has three levels of variable refrigerated compartment can be varied according to need.

Situation Analysis
Stores were delivered Frozen, Chilled and Dry goods in separate vehicles. This resulted in higher transportation cost, more manpower in loading / unloading / delivery and inconvenience to McDonalds stores which were receiving multiple deliveries and multiple documents. There was a need for a supply chain solutions system through which all the three

types of goods i.e. Frozen / Chilled / Dry could be delivered together at a time, without compromising on the integrity of the food product. Solutions: Against the conventional single temperature trucks, need of a truck carrying multiple temperature products was felt. To make it happen, the following was done:

A multi-temperature refrigeration unit was installed in the trucks. These units have two evaporators which enable temperature setting for Frozen and Chilled products at the same time. These units were imported. Customized partitions were made. These partitions are used as separator walls between two temperature zones. This was developed in-house by RK Foodland. Truck containers were made with two side doors in addition to the rear door. The side doors are used to unload products without disturbing the products carried in other temperature zones. Since the technical know-how on repairing the multi-temperature reefer units was limited in the country, the down time of such trucks was very high. Thus, RK Foodland came out with a truck which has two single units, fixed in such a way that the truck can have two temperature sensitive compartments and one ambient section. Consequently, the down time reduced, as we already had the experience of maintaining single temperature units.

Results

Consolidated delivery of Frozen / Chilled / Dry at the same time. Cost saving in transportation and manpower; against carrying approximately 150 cases per truck, the multi-temperature trucks carried 500 cases per truck with a mix of Frozen, Chilled and Ambient products. Convenient for the McDonalds store to receive all the goods at a single time window. One order, one invoice and one delivery.