Analysing Mc Donald’s Supply Chain Management

1871 words - 7 pages

Supply Chain Management according to Tom Mc Guffog is "Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market." Supply chain management is one of the important area which requiring strategic planning in a business enterprise. Planning and decision making are required right from the production of goods till the goods reach the ultimate consumers in the most cost effective and timely manner. If a firm is able to manage its supply chain efficiently, it can increase its customer satisfaction because SCM ensure the deliverance of fast and quality products to customers. Supply chain includes all the activities from the conversion of raw materials, one end of supply chain to the customers, the other end of the chain, including all associated information flows.
Supply chain is a very important concept in today’s world, it is very helpful in reducing inventories carrying, better sharing of information among the partners and planning being done in consultation rather than in isolation. The other benefits of SCM include lower costs, better customer service, efficient output etc. In the following paper we will discuss the importance and issues faced by supply chain management of a restaurant. If we talk about the supply chain management of Mc Donald’s we found that the objective of the company is to build such a supply chain where there is maximization of value to customers. The aim of the company is to bring food from cow to plate, in other words, the company is careful about every single details about how all the ingredients are brought into the restaurants. The company maintains such healthy relations with its suppliers that it does not even enter into any written contracts with them. Out of 14000 restaurants of the company in United States, there is not a single written contract with any of its suppliers, the company believes in maintaining long lasting relationships. Even with such healthy and long lasting relationships the company have to face a number of operational issues both on the demand side as well as on the supply side. Some of the challenges faced by the company are as follows:
1. The preferences of the consumers are shifting from refined flour to whole grains: due to rising health related problems in US, the consumers are changing their priorities and thus this is impacting the demand of white flour. The company has now to change their suppliers from white flour suppliers to whole grains suppliers. This also required monitoring of channel inventory.
2. Price volatility: since the main ingredient in preparation of products offered by Mc Donald’s is vegetables and their prices are determined by day to day forces of demand and supply, the company has to adjust its price margin from restaurants and grocers on day to day basis.
3. Mushrooms: the shipment of mushrooms used by Mc Donald’s is spoilt due to volatility in temperature in the shipment. Once the...

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