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Mc DONALDS SUPPLY CHAIN

AGENDA
Introduction History of Mc Donalds Mc Donalds in India Mc Donalds Supply chain Supply Chain Challenges Supply Chain Strategy Cold Chain Validation of cold chain Cold chain partners Logistics Result of Supply chain Integration

INTRODUCTION
Leading global food service retailer 32, 000 local restaurants, 60 million people, more than 100 countries Hamburgers, Chicken sandwich, French fries, soft drinks, breakfast items and desserts Local deviation from the standard menu Abide by regional taboos

HISTORY
1940 Began as a restaurant opened by siblings Dick and Mac McDonald in California 1948 Introduction of Speedy Service System 1955 - Opening of a franchised restaurant by Ray Kroc Post 1955 Kroc purchased Mc brothers equity in the company and led to world wide expansion

McDonalds IN INDIA
Entered India in 1996 through a joint venture with Hardcastle Restaurants Pvt. Ltd. and Connaught Plaza Restaurants Pvt. Ltd. 160 restaurants in India Special menu with vegetarian selection, no beef Products using Indian spices - McVeggieburger, McAloo Tikki burger Indian local suppliers provide McD with highest quality freshest ingredients

McDonalds FOUR PILLARS OF SUCCESS

Limited Menu Fresh Food Fast Service Affordable Price

Mc Donalds SUPPLY CHAIN IN INDIA

Source all its requirements from within India Developed local business Works with 38 different local suppliers Trained local farmers to produce according to their specification Worked with vendor to get the perfect cold chain in place Distribution centers Noida, Kalamboli, Bangalore, Kolkata Cold chain Unique concept of McD supply chain in India

Mc Donalds SUPPLY CHAIN CHALLENGES

Full Supply Chain responsibility Multi Temp. Products - Over 65 % temperature controlled Stores as far as 500 1000 kms Drops per month - Over 1000 - Movement mainly by road Regular movement of perishables by air No margin for error Operations critical client

Mc Donalds SUPPLY CHAIN CHALLENGES (cont.)

No Stock Outs at store On time delivery record above 97 % Clean delivery record above 99 % Unfailing inbound supply chain Bull whip effect Cannibalization

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SUPPLY CHAIN STRATEGY

SUPPLY CHAIN SERVICES FOR McDONALDS RESTAURANTS

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COLD CHAIN LIFELINE OF FAST FOOD BUSINESS

Temperature controlled supply chain Series of storage and distribution activities which maintain a given temperature range Extend and ensure the shelf life of food products
2oc Locked in precooling room to remove field heat after harvesting 1 to 4 o c -18 to 4 o c McDonalds store products to be used on daily basis

Transportation to distribution centers in refrigerated vans

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VALIDATION OF COLD CHAIN

Component Qualification Qualification check on packaging components Operational Qualification To demonstrate that the process performs at the operational extremes Performance Qualification To demonstrate that what happens in the real world is within the limits of what was demonstrated in the Operational Qualification limits

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COLD CHAIN PARTNERS BEHIND THE Big Mac

Source: http://www.rediff.com/business/1999/apr/29mac5.jpg

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COLD CHAIN PARTNERS

1. Dynamic Dairy Industries - Supplier of Cheese
Baramati, Maharashtra Immense benefit to farmers by setting up a network of milk collection centres equipped with bulk coolers From farm two degrees Celsius in 90 minutes Fully automatic international standard processing facility Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanized baby food Stringent quality control measures and continuous Research & Development

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COLD CHAIN PARTNERS (Cont.)

2. Trikaya Agriculture-Supplier of Iceberg Lettuce
Talegaon, Maharashtra Grow lettuce all year round with the help of experts from Mc Donalds A specialized nursery with a team of agricultural experts Vegetables are moved into the pre-cooling room within half an hour of harvesting. The pre-cooling room ensures rapid vacuum cooling to 2 C within 90 minutes. The pack house, post-cooling and cold room are located at the farms itself, ensuring no delay between harvesting, precooling, packaging and cold storage Refrigerated truck for transportation.

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COLD CHAIN PARTNERS (Cont.)

3. Vista Processed Foods Pvt. Ltd. -Supplier of Chicken and Vegetable range of products including Fruit Pies
Taloja, Maharashtra. Produces a range of frozen chicken and vegetable foods The technology includes hi-tech refrigeration plants for manufacture of frozen food at temperatures as low as - 35 c. Cultural sensitivity: Vegetable & chicken manufactured at different processing lines separated by a shower (washing) area. Utmost care to ensure no mixing up. R&D facility for innovation in taste, nutritional value and convenience

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COLD CHAIN PARTNERS (Cont.)

4. Radhakrishna Foodland -Distribution centers for Delhi and Mumbai
Thane, Maharashtra Handles large volumes Services include procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting Dry and cold storage facility to store and transport perishable products at temperatures upto -22 Degree Cel. Effective process control for minimum distribution cost Variety of items coming from across India, stored in rooms with different temperature zones and are finally dispatched to the McDonald's restaurants on the basis of their requirements Very vital role in maintaining the integrity of the products

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COLD CHAIN PARTNERS (Cont.)

5. Amrit Food- Supplier of long life UHT Milk and Milk Products for Frozen Desserts
Ghaziabad, Uttar Pradesh ISO 9000 company Manufacture widely popular brands Gagan Milk and Nandan Ghee State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene. Installed capacity of 6000 ltrs/hr for producing homogenized UHT (Ultra High Temperature) processed milk and milk products. Strict quality control supported by a fully equipped quality control laboratory.

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LOGISTICS
Handled by AFL Logistics Ltd. ~100 sales items in the restaurant ~400 SKUs in the warehouse (Hubs: up to 1,500) ~200 restaurants per DC (~180 DCs globally) Delivery frequency: ~3/wk, higher in urban areas 2-3 stops per route Exclusive distributors (3PL) Freight consolidation (via freight forwarders) Long term partnerships with service providers, risk sharing Strong quality focus (Cold Chain, HACCP, QIP)

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SUPPLY CHAIN INTEGRATION

RESULT OF SUPPLY CHAIN INTEGRATION

Significant business benefits to both the customer and the supply chain Enablers One stop shopping concept - Central file management Inventory management - Restaurant simplification Synchronizing the perishable Supply Chain Demand forecasting Promotional + Continuous Supply Supplier and DC level Supply Planning Restaurant and DC level Visibility and Collaboration across the chain

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REFRENCES
http://www.icmrindia.org/free%20resources/casestudie s/McDonald%20food%20chain-7.htm http://www.articlesbase.com/marketingarticles/mcdonalds-india-supply-chain-729402.html www.expresshospitality.com/20070315/management06 .shtml www.mcdonaldsindia.com www.nrf.com/Attachments.asp?id=9504