Assignment Sample on Supply Chain Strategy and Processes
Introduction
Supply Chain refers to the systemic network in an organisation through which the essential resources get available for further manufacturing and sales procedure. In this assignment, the Supply Chain Strategy and Processes will be explained in brief. A summative assessment will be involved in the below section, and it will help for comprehensive analysis. In this assignment, the chosen organisation is McDonald. In the later part of this assignment, upstream and downstream in the global supply chain will be discussed. A critical analysis will identify operations performance objectives, and it will be compared with one of McDonald’s competitors.
Background of the company
McDonald’s is well known as an American Fast food company. This organisation was founded in the year 1940. Richard and Maurice McDonald established this company as a restaurant in California. They used to sell hamburgers, and they became well known to people. Later on, the famous golden arches logo was introduced in 1953 (Ivanov, D. and Dolgui, 2019). McDonald’s became famous, and it is currently the world’s largest restaurant chain operator. McDonald’s provides services to around 69 million customers, and it is established in 100 countries around the world. It is known that McDonald’s has more than 37,855 outlets, according to the report of 2018. McDonald’s became the best seller for their famous hamburgers, French fries, cheeseburgers, multiple chicken products, breakfast items, milkshakes, and desserts and so on. A report published in 2018 says that McDonald’s became the second-largest private employer, as there are more than 1.7 million active employees in the company. During the year 2020, McDonald’s achieved the world’s ninth-highest brand value. Net income isUS$6.025 billion, and its revenue is US$ 21.076 billion, according to the report of 2019 (Koberg, E. and Longoni, 2019). Being such a huge company, McDonald’s has a large supply chain network that provides great services regularly.
The object of the study
This study aims to identify Operation performance objectives and examine the global supply chain of McDonald’s. The upstream and the downstream of the global supply chain in McDonald’s will be discussed. An Analysis of performance objectives will be provided along with the evaluation of the difference with competitions.
Operation performance objectives
Operation performance objectives of McDonald’s mainly revolve around quality control.Here the quality control refers to improving the quality of product and services, and quality is an important perforce objective of the company. The company has made rules to control the quality of services, as every franchiser has to attend compulsory courses regarding the operation of McDonald’s (Oliveira, Espindola, da Silva, and Rocha, 2018). The course involves employee management and kitchen management. The compulsory courses teach to improve the quality of food in the store, architectural design and exterior décor as well. In order to manage the environment and same ambience of McDonald’s and make the customers feel similar to the envy store, this course is compulsory.
McDonald’s does not compromise with the quality of food. Hence, the suppliers are provided with a list for maintaining good quality supply in every franchise, and it is essential to control good quality. It has been found that McDonald’s choose only potential franchisers that handle all the potential requirements in order to provide satisfaction to the customers. The company provides a 600 pages long training manual for explaining the business in an efficient manner to every franchiser. This manual involves all the upcoming challenges and the process to deal with them, as this helps to maintain the business standard of McDonald’s (Varchenko et al.,2020). The franchisees must pass out from McDonald’sHamburger University as this food product is identified as the best product in-store.
It is identified that the field consultants often monitor the McDonald’s stores to watch out if the essential qualities are maintained or not. The process of the inspection involves a checklist that they do not miss an essential point. Based on the inspection, the franchise has to face the risk of losing their license as well. Hence, it has been identified that McDonald’s strongly follows their performance objective, and they are strict about quality control.
McDonald’s is well known for its minimum cost for maximum outcomes, and it becomes possible for good quality services. Good quality does not refer to stored food in the refrigerator. It is identified that multiple companies produce food in advance. Sometimes they showcase the food in a transparent refrigerator in order to attract customers towards it. It is known there is no comparison of stored food with freshly made foods. JIT (Just On Time) inventory management is used by McDonald‘s in every store (Oliveira, Marins, Rocha, and Salomon, 2017). This method does not only save food wastage but also maintain the quality of it. Hence, the customers are able to enjoy fresh food and McDonald’s maintains quality as well. It also minimises the cost of food, and the items are affordable to every individual.
The global supply chain of the company
Upstream
McDonald’s has a vast network of suppliers as they have 100% outsourcing capacity, and it is considered a rare case in the fast-food industry. The company has a great grip and control over their organisational function. The KIPs (Key Performance Indicator) helps to monitor the performance of outsourced companies. The Upstream of Global supply chain in McDonald’s involves E-Procurement System, Suppliers of Raw Materials, Logistics and Distribution.
E-Procurement System
E-Procurement is effective for obtaining services and goods, and this procurement is considered an essential act that refers to the procedure of purchasing. McDonald’s uses this e-procurement system in order to purchase their essential goods. The internet system of procurement is under the mane of Emac Digital Company. This is actually owned by Accel-KKR Internet Company and McDonald’s as well. The procedure of e-procurement involves a website, which helps McDonald’s’ franchises purchase essential goods for running their restaurants. The Emac e-procurement model does the entire nation.
Suppliers of Raw Materials
Supply of raw material refers to the products needed to cook food in the restaurants such as cheese, dehydrated onions, chicken patty, buns, eggless mayonnaise, vegetables, mutation, and nuggets and so on. McDonald’s finds out the best places around the world to get their raw materials. The store is established in almost every region, and every region finds out the best place to buy the essentials. 90 % to 96% of raw materials are found in different parts of a country, and the rest of the other unavailable goods are imported from outside a country (Ardito, Petruzzelli, Panniello and Garavelli, 2019). McDonald’s has more than 30 suppliers in every region that includes core suppliers. The core supplier refers to those who deliver raw materials toevery fast-food chain.The well-known core suppliers involve Amrit Foods for delivering milk products, Chemia Industries for bakery, Trikaya Agriculture for lettuce and chicken and motion stays under Hi-tech refrigeration plants. The supplier’s manufacturer of frozen food at a temperature as low as -35C.
Logistics
Logistics of McDonald’s 100 sales items at the stores. The 400 SKUs in the warehouse and 200 restaurants per DC (~180 DCs globally) are included. The suppliers deliver goods every alternative three weeks, especially in the urban areas, and there are 2 to 3 stops per route (Zhang, Pawar and Bhardwaj, 2017). Exclusive distributorsof the company involve 3PL, and it is strongly quality focused around Cold Chain, HACCP, QIP.
Distribution
McDonald’s makes sure that the product is controlled in every stage of distribution. In different regions, a distribution centre purchases the product and survives it to the individual restaurants. As an example, Radha Krishna Foodland serves distribution centres providing service of McDonald’s products in entire India.The DCS are responsible for storage, inventory management, procurement, quality inspection programmer, recording, and reporting and data collection. There is no legal document for Service Level Agreements (SLAs) with RKFL (Oliveira, Marins, Rocha, and Salomon, 2017). McDonald’s usesKPIs (Key Performance Indicators) for the distributors as well.
Transportation
McDonald’s is established in cold and hot regions. Here the stored items recur different temperature zones. Hence, the company has its delivery truck to transport products in different temperatures that drag raw materials from room temperature to frozen state. McDonald designs their trucks to maintain the temperature in the storage chamber until the products are delivered to the ultimate destination.
Downstream
Downstream supply chain refers to the procedure that refers to a post-manufacturing supply chain network. McDonald’s produce restaurant service to their customers, and there is an opportunity to deliver food online. The downstream of McDonald’s involves customers. This is not a retails shop. Hence there is no need for retailers or wholesalers network to get an intense achievement (Ding and Skibniewski, 2017). Though in general, the common factors in the upstream and downstream of the supply chain is transportation. To promote goods to the customers, there is inflammation of resellers, physical distribution, marketing, and distribution of goods to the final customers.
Resellers
Resellers refer to McDonald’s’ distribution channel as this helps to find customers that the company can sell their product in. In general, for other companies like retail shops, such as Target, Costco and Walmart, there is a presence of wholesalers and retailers because they help to resell goods and merchandise. It is not easy to become partners with retailers. Several companies have independent retailers who hold such power to shut small manufacturers out of large markets. On the other side, the resellers and collectors gather McDonald’s for Pokémon card toys that include Happy Meals.
Physical distribution
Physical distribution refers to McDonald’s process, which helps the company move products and stock from their origin point to the destinations. Here the marketing agents help a lot as they research firms and consult with the advertising agencies, marketing consultant firms and media firms. Physical distribution procedure helps to promote McDonald’s food items (Asbed and Hitov, 2017). Financial brokers are the banks, insurance companies, credit companies, and other businesses which helpin economic transactions. Also, this identifies the risks associated with selling and buying services of McDonald’s.
Distribution of goods to the final customers
Satisfying customers is essential for every organisation, and the suppliers play amajor role as a part of the value delivery system. Here the company becomes a partner with several brands to satisfy the needs of customers. On the other side choosing an effective partner is essential as well. McDonald’s have chosen coca-cola as this is an extraordinary beverage, and the supplier knows the need for coca-cola in the market. Hence the marketers have become smart in terms of distributing goods to customers. Hence in the downstream global supply chain of McDonald’s, the marketers play an essential role to satisfy the needs of customers.
Critical Analysis
Analysis of performance objectives of Burger King
There are multiple fast-food restaurants worldwide, such as KFC, Subway, and Burger King and so on who have become competition for McDonald’s. As McDonald’s serves burger to the customers as their best food, Burger King can be considered the tough competition in the market. Burger King (BK) is well known as an American multinational company that makes delicious hamburgers. The company is established in different parts of the world, and the annual review is less than McDonald’s (Rosile, Boje, Herder and Sanchez, 2021). The reason could be found with performance objectives.
There are multiple strategies of Burger King to enhance the company’s status as this is in the company wants to get established at the top of the global market.
Design of services and goods in the company focus on strategic sides. To talk about the service of burger king, the number of varieties in products are vast. The company claims to maintain test of food as it is. The variety of products attracts customers and as a test of it provokes the buyers to come back over and over again. Though the company offers one of the best hamburgers in the market, flame-grilled burgers are a new Burger King’s invention. When it comes to maintaining the quality of food, the company claims to maintain its quality. Burger Kingmakes strategic decisions in order to satisfy their customers (Dolan-Gavitt, and Garg, 2017). The company targets buyers in the market to address their need for food and what they want in their burger. On the other hand, Burger King offers their customers a review or feedback through the My BK Experience website. Hence it is identified that companies give value to the needs of their customers.
Regarding capacity design and processing, Burger King uses strategic decision-making to implement the ideas for developing services and operation management. Their objective is to enhance the capacity of the product and utilise the maximum capacity. It is identified that the company has great market observation as it is able to monitor sales and demand of burgers in the market. On the other hand, this company can monitor all the essential facilities in the market. The company is smart enough to identify its competition in the market. Hence they try to develop their company strategically.
Appearance and packaging wise, the company has enhanced their quality over the years. Burger King has its supply chain all over the world, and in this part, they have strategic decision-making areas. Their operation market strategy involves on-time delivery, and their activities in the supply chain stay under RSI (Restaurant Service, Inc). The company gets their raw material delivered from the restaurant suppliers, and the chain is quite big. Burger Kingmakes their scheduling based on industrial standards. It is found in studies that the company used auto-scheduling for maintaining their HRM activities.
Furthermore, this auto-scheduling process is used in every individual Burger King restaurant. In terms of the maintenance of stores and goods, the company used optimal operating conditions, and these are the main strategic decision-making areas in operation and quality management. Here, the industrial standards are well maintained, and there are restaurant support centres for Burger King’s franchises. In multiple locations around the world. The company can provide third party service.
For maintaining the quality of service and product, the company can measure productivity with the help of the operation management team. The performance is measured from different angles so that equality can be maintained. On the other hand, the corporate headquarters stay under observation, and the regional facilities are maintained. Minimising the cost and maximising the productivity and utilisation is the main operational objective in Burger King in terms of maintaining quality. The restaurant’s productivity, the productivity of the regional market, productivity for process revolution and measuring corporate productivity is the main focus. All of these help to understand every restaurant’s revenue in every region, along with the quality of the meal and the process of the document per annum.
Difference with competitions
| McDonald’s | Burger King |
| In terms of quality management in operation performance objectives of McDonald’s, it is identified that the company provides training and makes all procedures learned to the franchisor for maintaining quality in their stores. The franchise has to pass out from the Hamburger university of McDonald’s to become more efficient to run a branch. | Burger King has multiple franchises in different parts of the world. Here the company helps to provide efficient information regarding opening a branch ofBurger King, but there is no scheduled training procedure for the franchisers regardingmaintaining the quality of services. There is no examination or judgment for the franchisor before opening a branch as the owners of stores are able to apply their strategy to maintain quality. |
| McDonald’s has multiple outlets in different parts of the world, but the company sells the same food products. The company does not want sales according to the regional need, and there is no new invention of recipes as per customer’s choice. | Burger King has multiple numbers stores in a different part of the world. This company researches the market need and asks for the public demand. Hence In a different region, different kinds of burgers will be found with different names. Though the basic ingredients are the same in the burger according to customers’ choice, the requirement can be changed in terms of maintaining quality. |
| McDonald’s is able to operate a vast supply chain, and every franchisee looks for their essential raw material inside the country as this helps to save money. However, the company provides opportunities to import goods from outside of a country. In every alternative three weeks, the regional and international suppliers deliver raw materials to the stores. Hence McDonald’s do not face any issues regarding the unavailability of raw materials. | Burger King has a vast supply chain, but the suppliers provide raw materials as per the need of restaurants because they are suppliers of restaurants. The company does not have any personal supply chain. Hence, during an emergency, it can face multiple problems. |
| McDonald’s uses their truck that includes a freezing facility as the McDonald’s stores are available in hot and cold regions. These trucks help to maintain the quality of the product. | There is no such facility of own trucks in order to deliver goods to different locations. |
| The supervisors often visit the stores to follow the checklist that the companies maintain all the rules and regulations. In terms of disobeying the rules of McDonald’s, a franchise can lose its license. | The supervisors depend on the customer review and try to develop the stores by implementing strategies. There is no threat to the franchisor regarding losing a license. |
Introduction of the Outline
The supply chain is an essential part of every organisation, and also, there should be an effective strategy and process of the supply chain in an organisation, as this helps to maintain the quality of services. This report includes the objectives of the assignment and the concept of the supply chain. Furthermore, there will be a proposed structure for a better understanding of the assignment in brief. In the end, a summary is included as well.
Objectives
- To identify Operation performance objectives.
- To examine the global supply chain of McDonald’s, including downstream and upstream of the supply chain.
- To analyse performance objectives with one of McDonald’s competitors.
- To evaluate the difference with competitions.
Concepts
This assignment will be a summative assignment that involves a comparative analysis of the performance objectives. There are multiple performance objectives in an organisation, such as speed, flexibility, dependability, cost and quality (Malik, Kanhere and Jurdak, 2018). Here the performance objective will be based on the quality service of a company. Quality is chosen as a performance objective because it is essential to maintain the customer’s bases and satisfy buyers’ needs. Good quality service is always beneficial, and it makes other organisational activity easier. Based on a chosen organisation, a competitive company will be chosen for critical evaluation.
Proposed structure
- Introduction
- The background of the chosen company
- Operation performance objective
- Global supply chain of the company (downstream and upstream)
- Critical analysis
- References
The concept of supply chain management refers to continuous flow of service and goods in a company and it is essential for a continuous and positive cash flow. Supply chain works as a bridge between the location of raw materials and the company (Zandi Atashbar, Labadie and Prins, 2018). The concept of supply chain includes a proper inplimaton of information technology, procurement, logistics, operation manager, system management for continuous delivery of raw materials in the company. The supply chain includes a strategic plan and the purpose is to find the strategic moves that are followed by the world’s top company.
The concept of performance management is a part of organisational activity that helps to achieve organisational goals and objectives by providing judgment on the basis of tasks. This includes strategic leadership strategy and the concept PM focuses on the organisational performance. It also provides strategic ideas for making the tasks better (Witkowski, 2017). Beside these improvement factors, the PM also changes the attitude and behavior of the organisation. Here the purpose is to find the way this PM works for supply chain management.
Summary
This assignment will include supply chain strategy and process. This will clear the ideas of best strategies that the world’s top companies use for maintaining quality and get growth in the market. The difference between the chosen company and the competitor will identify the gap in the supply chain. The concept of the global supply chain will be clear through the assignment. Upstream and downstream of the supply chain will help identify the essential factors for developing the supply chain procedure before and after manufacturing the product. Critical analysis is important to find differences between the world’s top companies and their competitors.
Conclusion
It can be concluded that every company used a supply chain in order to get their supply of raw material on time. Also there is downstream and upstream of the supply chain and the organisation has to use effective strategy for supply chain management. It is also concluded that there McDonalds and Burger king sell similar products and they are competitors but both the company used different strategies in supply chain and operation management objectives in term of quality management.
References
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