Group 2 SCM McDonald's

MC
A STUDY OF WORLDS SECOND BEST SUPPLY
DONALDS
CHAIN: AN INDIAN PERSPECTIVE
GROUP 2
Ankit
60007
Ankita
60008
Khushboo
60017
K. Devashish
60019
K. Rohit
60021
cIMP1
LETTER OF TRANSMITTAL
Group 2
Subject: Supply Chain Management
Batch 2013-2015
CIMP, Chajjubagh, Patna
Date: 14/12/2014
Prof Vijaya Bandyopadhyaya

Faculty, CIMP
Dear Professor,
This project contains the study by Group 2 on the supply chain practices of the fast food
restaurant McDonalds for the academic purpose assigned by you based on the information
collected from various sources. This work submitted by us is strictly for the academic
purpose to be used by the members of this group and in no manner and under no
circumstances shall it be reproduced. The confidentiality of the data would be maintained
intact.
The purpose of the project is to provide a uniform and detailed analysis of the various supply
chain practices of the company selected by the group for this project. The group has tried to
provide all the related information pertaining to the project to make it meaningful. The work
submitted by us will provide the intricacies of all the concepts of supply chain that helps in
the success of a company.
Yours sincerely,
Group 2 (PGP-2), CIMP
Enclosure:
Final Report
CIMP/SCM/GROUP-2/McDonalds
ACKNOWLEDGMENT
We, the members of group 2 would like to acknowledge all the people who helped and
supported us throughout our project.
Our deepest thanks to our faculty and mentor Prof Vijaya Bandyopadhyaya for guiding and
instructing us at each and every step of our work. We express our sincere gratitude towards
her for taking the pain of going through our project and making necessary corrections as and
when required. It was her valuable suggestions, constant help and incessant monitor which
helped us in carrying out this project.
We express our deep sense of gratitude to Dr. V. Mukunda Das, Director CIMP for providing
us the opportunity to be a part of this prestigious institution. We also thank all the members
of the group for their constant help and support. We would like to appreciate our friends and
family for their valuable inputs and help. We would be failing in our duty if we ignore the
library resource centre of CIMP as it helped us in gathering information which helped us in
carrying out this project.
TABLE OF CONTENTS
LETTER OF TRANSMITTAL ............................................................................................................. 2
ACKNOWLEDGMENT ...................................................................................................................... 3
EXECUTIVE SUMMARY .................................................................................................................... 6
INTRODUCTION ................................................................................................................................ 7
CORPORATE VISION OF MC DONALDSS .................................................................................. 8
Mc DONALDS: PILLARS OF SUCCESS ......................................................................................... 8
Mc DONALDS: GLOBAL SUPPLY CHAIN STRATEGY ............................................................. 9
Mc DONALDS IN INDIA ................................................................................................................ 10
PHASES OF Mc DONALDS IN INDIA ..................................................................................... 10
Phase 1 1990-96 Setting up the Foundation ............................................................................ 11
Phase 2 1997-03: Meeting McDonalds expectations ............................................................. 11
Phase 3 2004-10: Growth ........................................................................................................... 11
Phase 4 2011-17: Building for future........................................................................................ 11
SUPPLY CHAIN NETWORK........................................................................................................... 12
MULTI-LAYERED SUPPLY-CHAIN .......................................................................................... 12
Tier-I and Tier-2 suppliers ........................................................................................................ 13
OTHER COMPONENTS OF SUPPLY CHAIN ......................................................................... 13
Inbound Transportation ............................................................................................................ 13
Distribution Centres .................................................................................................................. 13
Outbound Transportation ......................................................................................................... 13
SERVICES OF SUPPLY CHAIN FOR MC DONALDS RESTAURANTS ................................. 15
THE COLD CHAIN ........................................................................................................................... 16
THE COLD CHAIN PARTNERS ................................................................................................. 17
1.
Dynamic Dairy Industries - Supplier of Cheese ............................................................ 17
2.
Trikaya Agriculture-Supplier of Iceberg Lettuce .......................................................... 17
3.
Vista Processed Foods Pvt. Ltd. ....................................................................................... 18
4.
Radhakrishna Foodland -Distribution centers for Delhi and Mumbai ...................... 18
5.
Amrit Food- Supplier of long life UHT Milk ................................................................. 19
DEMAND FORESCASTING: 31Q SYSTEM .................................................................................. 20

PERFORMANCE MODELLING ..................................................................................................... 20
QUALITY ASSURANCE............................................................................................................... 21
FOOD SAFETY & HACCP ........................................................................................................... 21
LOGISTICS OF Mc DONALDS ...................................................................................................... 22
SOLE DISTRIBUTION PARTNER............................................................................................... 22

SUPPLY CHAIN IT STRATEGY ...................................................................................................... 23
Qualitative Forecasting Methods ................................................................................................. 23
E-Mac Digital .................................................................................................................................. 23
The eFS Network's neutral web-based marketplace ................................................................. 23
SUPPLY CHAIN INTEGRATION ................................................................................................... 24
EVALUATION OF Mc DONALDS SUPPLY CHAIN ................................................................. 25
CONCLUSION ................................................................................................................................... 26
LEARNINGS ....................................................................................................................................... 26
RECOMMENDATIONS.................................................................................................................... 26
REFERENCES ..................................................................................................................................... 27
LIST OF FIGURES
Figure 1: Phases of Mc Donald's in India........................................................................................ 10
Figure 2: Model of Supply Chain ..................................................................................................... 12
Figure 3: Critical components of supply chain .............................................................................. 14
Figure 4: Supply chain strategy in India ......................................................................................... 15
Figure 5: Supply Chain Services ...................................................................................................... 16
Figure 6: E-Procurement used in Mc Donald's .............................................................................. 23
Figure 7: Supply Chain Integration ................................................................................................. 24
Figure 8: Evaluation of supply chain of McDonald's .................................................................... 25
EXECUTIVE SUMMARY
McDonalds is the world leader in QSR. Their presence in 119 countries with 35,000
restaurants glorifies its position as world leader and as fast food giant. Its committed to
provide quality products and fast friendly service at a real value. It supports other Indian
businesses through local sourcing and imparting new skills. It also generates local
employment by being a part of the local culture. McDonald's unique 'cold chain', on which
the QSR major has spent more than six years setting up in India, has brought about a veritable
revolution, immensely benefiting the farmers at one end and enabling customers at retail
counters to get the highest quality food products, absolutely fresh and at great value.
McDonald's, through its unique cold chain, has been able to, both cut down on its operational
wastage, as well as maintain the freshness and nutritional value of raw and processed food
products. This has involved procurement, warehousing, transportation and retailing of
perishable food products, all under controlled temperatures. This huge network is not easy to
manage where guest expectations are clean, hygienic, tasty and quick food every time. The
credit of this successful availability goes to the unique supply chain management and control
over this entire huge network. McDonalds is present in more than 40 cities of India with 250
eating outlets and adding more every now and then. This huge supply chain is entirely
outsourced without any legal contact with them. Some unique features of this supply chain
management are lean management, multi-layered supply-chain, cold chain, Hub and Spoke
system. The control on outsourced entities is commendable. With ever growing business of
fast food McDonalds has laid down its systems efficiently and expanding at enormous speed.
The model can be replicated in other sectors as well.
INTRODUCTION
The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,
serving around 68 million customers daily in 119 countries across 35,000 outlets.
Headquartered in the United States, the company began in 1940 as a barbecue restaurant
operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a
hamburger stand using production line principles. Businessman Ray Kroc joined the
company as a franchise agent in 1955. He subsequently purchased the chain from the
McDonald brothers and oversaw its worldwide growth.
In 2012, McDonald's Corporation had annual revenues of $27.5 billion, and profits of $5.5
billion. According to a 2012 report by the BBC, McDonald's is the world's second largest
private employer (behind Walmart) with 1.9 million employees, 1.5 million of whom work
for franchises.
McDonalds primarily sells hamburgers, cheeseburgers, chicken, french-fries, breakfast
items, soft drinks, milkshakes, and deserts. In response, to changing, consumer tastes, the
company has expanded its menu to include salad, fish, wraps, smoothies, and seasoned fries.
Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired
during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until
October 2006, when McDonald's fully divested from Chipotle through a stock exchange.
Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's
sold Boston Market to Sun Capital Partners.
Notably, McDonald's has increased shareholder dividends for 25 consecutive years, making it
one of the S&P 500 Dividend Aristocrats. In October 2012, its monthly sales fell for the first
time in nine years.
CORPORATE VISION OF MC DONALDSS

Our number one priority continues to be satisfying our
customers needs by serving great-tasting, high-quality food in

contemporary restaurants We will continue to build customer
trust through our commitment to sustainabilityincluding
nutrition
and
well-being,
sustainable
supply
chain,
environmental responsibility, employee experience, and the
Donald Thompson, President and CEO
community.
MC DONALDS: PILLARS OF SUCCESS

The success of McDonalds is based on the four mantras that it follows:
Limited Menu: It offers limited products to its customers and so it is able to maintain
the quality and taste of the food.
Fresh Food: The effective supply chain and logistics of the company has helped it to
retain the freshness of its food.
Fast Service: The efficient and quick service of Mc Donalds has helped it to serve
650,000 customers each day. The staffs are well versed in their work and always meet
the expectations of their customers.
Affordable Price: Affordability has been the driving point behind the success of this
company. The range of prices that it offers for its products has been attracting to the
customers.
MC DONALDS: GLOBAL SUPPLY CHAIN STRATEGY

The supply chain of the company is unique and world class. It is the second best supply chain
in the world. It has glorified its position as the giant food chain of the world.
Thousands of supply partners globally: The company has a wide range of suppliers who
compete to remain in the mainstream with their rigorous work. There is a big responsibility
that the suppliers carry right from the delivery of the products to the maintenance of its
quality. The job of the supplier extends from the point the products leaves till it is consumed
by the customer. Mc Donalds expects that its suppliers personally take care of the quality of
the product so as to minimize the risk. To cite one of the examples the beverage partner of
Mc Donalds Coca Cola provides the restaurant staff the knowledge of the quality of portable
drinking water.
Faith is the key: Mc Donalds also always focussed on building long term relationship with
the suppliers. It has never signed any legal agreement with its suppliers and entrusted faith
and belief on them. They follow a handshake relationship with its suppliers. They follow a
policy of one product one supplier relationship with its suppliers. This conviction and
credence has strengthened the relationship between the company and suppliers. There are
about 14 core suppliers who serve the entire supply chain and they fulfil 80% of the demand.
Strict guidelines ensure that stores get best products: The company follows strict standard
and guide lines to ensure the best quality and minimize the cost. They publish guidelines with
the product specifications to keep the quality of its products intact.
Outsourced Business: The success of the companys supply chain can be attributed to its
remarkable concept of outsourcing. The supply chain is 100% outsourced. It has efficiently
monitored the functioning of the supply chain based on certain Key Performance Indicators.
(KPIs).
MC DONALDS IN INDIA
In 1996 the company laid its first pillar in India and since then it has been expanding at a
greater pace. In India, two business entities are responsible for managing the brand
Connaught Plaza Restaurants Private Limited, led by Mr. Vikram Bakshi, JV Partner
and Managing Director, North & East India
Hardcastle Restaurants Private Limited, led by Ms. Smita Jatia, Managing Director,
South & West India
McDonald's has followed the philosophy of QSCV (Quality, Service, Cleanliness and Value)
and this has served as the guiding force behind its service to the customers in India. Keeping
this philosophy and respecting the religious sentiments of Indian people Mc Donalds for the
first time introduced a menu without beef. In India the segregation of vegetarian and nonvegetarian products is made right from the food processing plants to the point of serving the
customers.
McDonald's commitment to the Indian customers is evident from the fact that they have
always tried to serve the products in accordance with the cultural beliefs and food habit of
Indian origin.
PHASES OF Mc DONALDS IN INDIA
Figure 1: Phases of Mc Donald's in India
10
Phase 1 1990-96 Setting up the Foundation
Supplier identification (food, packaging and service)

Training and technology transfer
No short cuts while keeping cost structures low
Phase 2 1997-03: Meeting McDonalds expectations
Food Safety and Quality

Cost and service Innovation
Cold, clean and on-time deliveries
Meeting service standards
Phase 3 2004-10: Growth
Capacity fulfilment (35% CAGR)

New product introduction
Corrections in supply / service models
Further localization
Phase 4 2011-17: Building for future
Backward Integration for key products

Capacity additions/expansion
Network optimization
11
SUPPLY CHAIN NETWORK

The supply-chain network of Mc Donalds can be classified as follows:
100 percent outsourced
Lean with no back-up staff and no frills.
The company is experiencing a continuous growth of 30-40% every year because of its strong
supply chain network. The company was able to get a firm position in India because of the
background study and research done with the perspective of Indian origin and food habits.
The research team of the company has been working day and night to ensure the proper
functioning of the supply chain network and logistics. The company designed special menus
keeping in view the Indian religious and cultural sentiments. Mc Donalds which is famous
elsewhere for its beef burgers has kept a beef free menu for India.
MULTI-LAYERED SUPPLY-CHAIN
Figure 2: Model of Supply Chain
12
The McDonalds supply chain is both critical and multi-layered. There are two categories in
food ingredients supply:
Tier-I and Tier-2 suppliers
In Tier-I the number of suppliers are 14 and they provide processed products like Vegetables
and chicken patties from Vista Processed foods Pvt Ltd., French fries, potato wedges and
hash browns by McCain Foods India Pvt. Ltd.
In case of Tier-2 the suppliers includes the growers and processors who provide lettuce and
potato, poultry items and coating systems that are used for coating the chicken and vegetable
patties. The ingredients flow is from Tier 2 to Tier 1 suppliers. The processed food is being
transported to the Distribution Centres of the company with the help of refrigerated trucks.
These trucks have been used to transfer a variety of products. The trucks are of Multi
temperature and single temperature type and they help in quick and fast delivery of products.
OTHER COMPONENTS OF SUPPLY CHAIN

Apart from Tier 1 and Tier 2 suppliers the other critical components includes:
Inbound Transportation: This includes the fleet of trucks which are special refrigerated
trucks.
Distribution Centres: There are about four DCs which serves about 250 restaurants
effectively. Among the 4 distribution centres the primary ones are from Noida and Mumbai
while the other two are located in Kolkata and Bengaluru. The distribution centres of Mc
Donalds follow a hub and spoke model.
Outbound Transportation: This includes fleet of single temperature and multi temperature
trucks.
13
Figure 3: Critical components of supply chain

Table 1: List of Tier 1 suppliers
Product
Supplier
Cheese
Dynamix Dairy Industries Ltd., Pune
Dehydrated onions
Jain Foods, Jalgaon
Iceberg lettuce
Trikaya Agriculture, Pune
Chicken patty
Vista Foods, Taloja
Chicken (dressed)
Riverdale, Talegaon
Buns
Cremica Industries, Phillaur
Eggless mayonnaise
Quaker Cremica Pvt Ltd, Phillaur
Sesame Seeds
Ghaziabad
Iceberg Lettuce
Meena Agritech, Delhi
Fish fillet patties
Amalgam Food limited, Kochi
Iceberg Lettuce
Ooty Farms and Orchards, Ooty
Vegetable for patties
Finn Frozen Foods & Jain Foods, Nasik
Mutton and Mutton patties
Al Kabeer, Hyderabad
Veg patty , veg nuggets
Kitran Foods, Taloja
Source: Business India, October 4, 1999
14
Figure 4: Supply chain strategy in India
SERVICES OF SUPPLY CHAIN FOR MC DONALDS

RESTAURANTS
Supply chain integration and network optimization: The restaurant provides a
strict 30 minutes window in which the delivery has to be made. The chances of failure
as per the data till date are negligible.
Automatic ordering: They follow a system of automatic ordering depending upon
the demand. This is further aided by Electronic Data Interchange (EDI).
Demand and supply planning: The proper forecasting of demand and supply is done
by the restaurants and then the order is placed accordingly to the suppliers which are
provided within time by them.
Central file maintenance: A data log file is there to keep track of all the products
delivery and sale on a day to day basis.
15
Figure 5: Supply Chain Services
THE COLD CHAIN

A remarkable feature of Mc Donalds supply chain is that the entire network consists of
movement of goods through a cold chain. The fleets of truck transport all the edible goods
through a system of cold chain. These are capable to carry different items all together as
there are compartments created to store frozen products at -180C to -250C, chilled
products from 10C-40C and dry products at ambient temperatures. Another interesting
feature of these trucks is that they have containers made with two side doors in addition to
the rear door. The side doors are used to unload products without disturbing the products
in the other temperature zones. The concept of pull supply chain leads to the
effectiveness of supply-chain. The restaurant issues orders to the Distribution Center
which, in turn, routes the order to the supplier and only then does the supplier produce it.
The concept is also known as made to order. The supplier thus maintains barely any
extra stocks; only if there is a contingency, like the overhaul or servicing of machinery,
will the supplier produce surplus stocks. The fill rate to store is reported to be 99.8
percent.
16
It is ensured that no disturbance occurs in the cold chain. The company always maintains
a contingency plan and a backup plan in the event of any failure. In case there is a power
breakdown in the Mc Donalds restaurants the reefer trucks are arranged to restore the
required temperature. AFL Logistics which is a joint venture between Coughlin of U.S.A
and RFPL has been actively engaged in ensuring and attaining the cold, clean and on-time
delivery standards of the company. Thus the cold chain helps to achieve freshness and
adequate moisture content of the food.
THE COLD CHAIN PARTNERS

1. Dynamic Dairy Industries - Supplier of Cheese
Located at Baramati, Maharashtra

Immense benefit to farmers by setting up a network of milk collection centres
equipped with bulk coolers
Transport 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
Engaged in stringent quality control measures and continuous Research
& Development
2. Trikaya Agriculture-Supplier of Iceberg Lettuce
It is located in Talegaon, Maharashtra

They grow lettuce all year round with the help of experts from Mc Donalds
They own a specialized nursery with a team of agricultural experts
17
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, pre-cooling, packaging and cold
storage
They use refrigerated truck for transportation.
3. Vista Processed Foods Pvt. Ltd.
Supplier of Chicken and Vegetable range of products including Fruit Pies
Located in 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
4. Radhakrishna Foodland -Distribution centers for Delhi and Mumbai
RFLP is located in Thane, Maharashtra

Services include procurement, quality inspection, storage, inventory
management, deliveries, data collection, recording and reporting
18
Dry and cold storage facility to store and transport perishable products at
temperatures upto -22 Degree Celsius.
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
They play a very vital role in maintaining the integrity of the products
5. Amrit Food- Supplier of long life UHT Milk
Located in Ghaziabad, Uttar Pradesh

ISO 9000 certified 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.
It follows a strict quality control supported by a fully equipped quality control
laboratory.
19
DEMAND FORESCASTING: 31Q SYSTEM

Mc Donalds follows a very unique and effective forecasting system called 31Q. Under this
system 3 indicates the three years in which the food chain would be checking and reviewing
its plans, 1 represents the detailed forecast of the next one year and the Q symbolizes the
quarterly monitoring of these forecasts. The fast food chain also tries to include the suppliers
while preparing their budgets so that the suppliers are closely knitted with the system. The
restaurants usually give a forecast of three days to one week to the distribution centres. The
distribution centres maintains a rolling forecast of three months with the suppliers which
helps to plan their production schedule well in time.
As they have nearly 250 restaurants spread all over the country so the lead
time has a vital role to play. The restaurants managers are aware of the exact time of the
arrival of the products which helps the supply chain to work backwards to ensure timely
distribution. The inventory turnover of the food chain is 36.
PERFORMANCE MODELLING
Mc Donalds has set certain KPIs (Key Performance Indicators) for the distribution centres.
The DCs are assessed on several factors like
administration efficiency
the total number of cases managed per man hour,
warehouse efficiency,
overtime as a percentage of the total number of hours worked and in the case of
transportation,
the number of cases handled per trip,
trucks utilization, etc.
20
Backup plan: It has a contingency and backup plan to meet any unexpected situation
or sudden fluctuation of demand if any.
Data logs: This helps to track the movement of each and every batch. In case of any
complain reported from the restaurant the batch is isolated, identified and dumped.
Ensuring hygienic conditions: The cleanliness and hygiene is looked after by RPFL.
They ensure the hygiene of both the food as well as personal cleanliness and hygiene
of the truck drivers.
QUALITY ASSURANCE: Taste of the food is affected by its quality and so it

needs to be maintained. Mc Donalds has a Sensory Program for ensuring the quality
of food. There is a centralized laboratory under this program that is located in Hong
Kong. This prepares the sensory experts that approve every batch of food that is
manufactured at the suppliers plant. The products are given score and the product
with the best score is allowed to be distributed. Apart from this the fast food chain
also has random checks and inspection. Also, every quarter or half year, members of
the management do a product cutting with key suppliersfry a product, check its
taste and allot scoresto check if the product scores are moving in the right direction.
The samples of the products that are manufactured in the country are shipped to the
central laboratory at Hong Kong which evaluates the products.
FOOD SAFETY & HACCP

Food safety is another critical area for quality standard. The company has a Hazard
Analysis Critical Control Point (HACCP) certification which ensures food quality is
applicable. This is an industry level certification and is applicable on all the suppliers
of the fast food chain. There are also other food safety systems like the Supplier
Quality Management Systems (SQMS) and the Distributor Quality Maintenance
Program (DQMP). SQMS is applicable for processing and manufacturing plants .The
21
SQMS is a worldwide mandate for all McDonalds suppliers and includes essentials
of the HACCP control system. The DQMS audits and checks the warehouses of the
chain. Auditors worldwide are also trained on its SQMS and DQMP programs.
Independent auditors then audit plants and warehouses and allot scores to
McDonalds facilities globally to ensure highest standards.
LOGISTICS OF MC DONALDS
It has a centralized distribution system which is very unique.
The entire logistics is handled by AFL Logistics.
~100 sales items in the restaurant
Has 400 SKUs in the warehouse (Hubs: up to 1,500)
200 restaurants per DC (~180 DCs globally)
Delivery frequency is ~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)
SOLE DISTRIBUTION PARTNER

The entire distribution of McDonalds products in India is solely handled by Radhakrishna
Foodland Pvt. Ltd. RKFL manages the four DCs and also handles the truck movement in the
supply-chain right through the country since it has a transport division. RKLP has experts to
manage the day to day activities of raising purchase orders to suppliers, invoicing, keeping
track on working capital management, timely delivery, payments, etc. RK directly sources
22
any item that is needed at any point of time. It is only the two products buns and cokes that
are sent directly to the restaurants.
SUPPLY CHAIN IT STRATEGY

Qualitative Forecasting Methods: Mc Donalds uses qualitative forecasting methods
to gather information from employees, customers and experts with the help of surveys. It uses
e- Food service network and proprietary ERP for information gathering and following them.
The suppliers uses SAP while the distribution centres uses RAMCO Marshall ERP with
Cobra software.
E-Mac Digital: It is a company jointly owned by Mc Donalds and Accel KKR Internet
Co. It is an E-Procurement website.
The eFS Network's neutral web-based marketplace: It has helped to streamline

information flow between participants as well as promote industry-wide technology
standards.
Figure 6: E-Procurement used in Mc Donald's
23
SUPPLY CHAIN INTEGRATION

The result of the supply chain has been significant business benefits to both the customers
and the supply chain partners. This has led to one stop shopping concept and in proper
inventory management. It has synchronized the entire process of demand forecasting at the
level of suppliers as well as the DCs and restaurants. It is the result of this integration that
the visibility of Mc Donalds across the country has increased.
Figure 7: Supply Chain Integration
24
EVALUATION OF MC DONALDS SUPPLY CHAIN
Figure 8: Evaluation of supply chain of McDonald's
25
CONCLUSION
The supply chain of Mc Donalds is very unique and the second best is the world. It has
effectively handled it supply chain with the involvement of less people and has innovated a
model that is worth replicating. The centralized distribution system and the concept of
outsourcing has helped Mc Donalds to expand at such a higher pace throughout the country.
LEARNINGS
Faith is the key as it has no legally signed contracts with suppliers
Powerful technology to maintain smooth and effortless supply chain
Effective maintenance of the supply chain
RECOMMENDATIONS
McDonalds should enter into legal contract with the suppliers to avoid any
unexpected consequences in the future as all its business is based on faith.
It is limited menu restaurant so it should try to increase the items on its menu.
Provide the option of customization to the customers.
26
REFERENCES
1. Mc
Donalds
Food
Chain.
Retrieved
December
1,
2014
from
http://www.icmrindia.org/free%20resources/casestudies/McDonald%20food%20chai
n.htm
2. A case study on Mc Donalds Supply Chain In India. (2013). Retrieved December 1,
2014 from www. indianjournals.com. Asia Pacific Journal of Marketing and
Management Review.
3. History
of
Mc
Donalds.
Retrieved
December
3,
2014,
from
3,
2014,
from
www.mcdonaldsindia.com
4. Mc
Donalds
India
Profile.
Retrieved
December
www.mcdonaldsindia.com
5. How does Mc Donalds manage its supply chain in India. (2013). Retrieved
December 4, 2014 , from http://www.retailmantra.com/how-does-mcdonalds-manageits-supply-chain-in-india/
27

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MC

A STUDY OF WORLDS SECOND BEST SUPPLY

CHAIN: AN INDIAN PERSPECTIVE

Prof Vijaya Bandyopadhyaya

Dynamic Dairy Industries - Supplier of Cheese ............................................................ 17

Trikaya Agriculture-Supplier of Iceberg Lettuce .......................................................... 17

Vista Processed Foods Pvt. Ltd. ....................................................................................... 18

Radhakrishna Foodland -Distribution centers for Delhi and Mumbai ...................... 18

Amrit Food- Supplier of long life UHT Milk ................................................................. 19

DEMAND FORESCASTING: 31Q SYSTEM .................................................................................. 20

SOLE DISTRIBUTION PARTNER............................................................................................... 22

CORPORATE VISION OF MC DONALDSS

customers needs by serving great-tasting, high-quality food in

environmental responsibility, employee experience, and the

Donald Thompson, President and CEO

MC DONALDS: PILLARS OF SUCCESS

MC DONALDS: GLOBAL SUPPLY CHAIN STRATEGY

PHASES OF Mc DONALDS IN INDIA

Figure 1: Phases of Mc Donald's in India

Phase 1 1990-96 Setting up the Foundation

Supplier identification (food, packaging and service)

Food Safety and Quality

Capacity fulfilment (35% CAGR)

Backward Integration for key products

SUPPLY CHAIN NETWORK

Figure 2: Model of Supply Chain

OTHER COMPONENTS OF SUPPLY CHAIN

Figure 3: Critical components of supply chain

Dynamix Dairy Industries Ltd., Pune

Jain Foods, Jalgaon

Trikaya Agriculture, Pune

Vista Foods, Taloja

Cremica Industries, Phillaur

Quaker Cremica Pvt Ltd, Phillaur

Meena Agritech, Delhi

Fish fillet patties

Amalgam Food limited, Kochi

Ooty Farms and Orchards, Ooty

Vegetable for patties

Finn Frozen Foods & Jain Foods, Nasik

Mutton and Mutton patties

Veg patty , veg nuggets

Kitran Foods, Taloja

Source: Business India, October 4, 1999

Figure 4: Supply chain strategy in India

SERVICES OF SUPPLY CHAIN FOR MC DONALDS

Figure 5: Supply Chain Services

THE COLD CHAIN

THE COLD CHAIN PARTNERS

Located at Baramati, Maharashtra

It is located in Talegaon, Maharashtra

Located in Taloja, Maharashtra.

RFLP is located in Thane, Maharashtra

Located in Ghaziabad, Uttar Pradesh

DEMAND FORESCASTING: 31Q SYSTEM

QUALITY ASSURANCE: Taste of the food is affected by its quality and so it

FOOD SAFETY & HACCP

SOLE DISTRIBUTION PARTNER

SUPPLY CHAIN IT STRATEGY

The eFS Network's neutral web-based marketplace: It has helped to streamline

Figure 6: E-Procurement used in Mc Donald's

SUPPLY CHAIN INTEGRATION

Figure 7: Supply Chain Integration

EVALUATION OF MC DONALDS SUPPLY CHAIN

Group 2 SCM McDonald's

Group 2 SCM McDonald's