McDonald's is an American multinational Company that has, for a long time, now been dealing with fast foods. This Company began or instead started as a simple restaurant that was run by Maurice McDonald and Richard within San Bernardino of California in the United States. Many transformations and or changes have been applied to this Company with its first state being hamburger and later turned to a franchise business (Lichtenberg, 2012). The Golden Arches logo of the Company was brought about in the year 1953 in Phoenix, Arizona. The year 1955 marked a critical period when a great businessman in the United States by the name Ray Kroc went into the Company and became a franchise agent of the Company. He then later purchased the business chain from the two brothers of the McDonald's family (Arshadi, Khamseh & Zahmatkesh, 2015). The early headquarters of this fast food company was based in Oak Brook in Illinois. However, it was later transferred to Chicago early in 2018, which serves as the global headquarters. This paper will endeavor on understanding the different elements of McDonald's supply chain and how it capitalizes on its advantages and disadvantages to achieve the desired market goals.
This Company is the largest when it comes to revenue and attends to several millions of customers daily (Lichtenberg, 2012). This business is in operation within more than one hundred countries all over the world, and it had opened up to 37, 855 0utlets by 2018 in these 100 countries. It has been known for the production and sale of hamburgers, French fries, and cheeseburgers. Moreover, they began to offer chicken products, soft drinks, items for breakfast, desserts, wraps, and milkshakes to their customers (Arshadi et al., 2015). Salads, fruit, smoothies, and fish are the other items that have been added to the McDonald's menu so that they can fulfill the consumer desires of their customers (Lichtenberg, 2012). This Company gets most of its revenues from the royalties, fees, and rent which are paid by franchisees who are their customers and from the sales which are done in all their restaurants. It is the number four largest employer (private) in the world, and it has a total of 1.7 million people employed. It follows Walmart, which has a total of 2.3 million employees in the world. Maurice McDonald and his brother Richard came up with the very first McDonald's in the year 1940, and it was situated at 1398 North E street in San Bernardino of California.
The Company filed for the United States trademark on May 4th, 1961, as McDonald's, and it has been renewed over time (Lichtenberg, 2012). With the help of Ray Kroc, this Company had by date September 13th the same year acquired a trademark on their new logo which overlapped and was the double-arched symbol "M" (Casson, 2013). The Company had used a single arch before the double overlapping arcs, and this had been so because of the architecture which they used for their buildings. The logo of the golden arches was in diverse forms, and the latest version of it had not been used until the year 1968 date November 18th a time when McDonald's a favor from the United States trademark.
Evaluation of the Supply Chain Processes
In the daily dealings with the customers of and suppliers, McDonald's as a company dealing with the fast-moving foods and breakfast items needed a good and well-established supply chain so that the acquisition of the raw materials which they needed to produce their products would be easily possible (Fristedt, Hansson, Huge-Brodin, Rehme, & Sandberg, 2012). Besides, the other importance of this excellent supply chain was to ensure that productions of these products, the products were availed to their customers and or consumers efficiently and within the right time.
The success of this Company can be accrued to its excellent supply chain which has made it possible for all the processes which deem necessary in the achievement of the set standards that concern the daily tasks of the Company (Fristedt et al., 2012). There is various supply chain which has aided in the best productivity of the Company as well the realization of its goals thus giving it a tremendous competitive advantage at the expense of the other companies similar to it that exist throughout the world (Arshadi et al., 2015). Some of the supply chain processes that have contributed in the output level of McDonald's are the ones which are evaluated below based on how they have helped this Company to get to where it is in terms of achievement in the present day. These are the best supply chain processes for the Company that have deemed best for it;
Storage: To the McDonald's Company, storage is one of the most crucial processes in their supply chain, and it is essential in aiding the realization of the long terms of this particular Company. At McDonald's, storage is divided into three sections which comprise of the dry, frozen, and refrigerated foods storage (Fristedt et al., 2012). Each particular section where the items of the Company are stored is kept at the most optimal temperatures that make sure that the stored items are always in good condition and are not affected in any way that makes them affect the consumers. All that is ensured here is that the products are not spoiled by excess coldness or hotness from the changes in the weather and or climate that may occur (Casson, 2013). Therefore, with this consideration of the process of storing the items within the best temperatures, the Company has reduced all the spoilage that could have taken place and as a result the profits of the Company have been increased since all the products are sold out to the customers in a fresh condition and therefore they have always wanted to buy more and more from the outlets of this Company.
Distribution: Another essential process in the supply chain of the Company is the process of product distribution all across the world so that they can reach consumers. The Company has three distribution sections which are so much separate depending on the kind of the goods which should be delivered to the customers and the outlets owned by this Company (Wind, Fung, & Fung, 2009). In the process of distribution of McDonald's Company, the temperatures are as well considered so crucial depending on the products being distributed, and they must be controlled so that when they are taken to the consumers they are in the best condition as per the preferences of the customers (Wind et al., 2009). This, therefore, works out to ensure that the sales of particular products are increased immensely.
The Menu Update
It is evident that the menu of McDonald's restaurants is not always updated and or changed regularly. The reason as to why this process is maintained at a constant level is because the customers are required to remain aware of the products of these restaurants and their prices and thus they always know whatever they want (Talpau & Boscor, 2011). This makes it easier for workers in the restaurants to maintain high sales during low and peak seasons as the customers know the items they need and the prices of each of the goods (Casson, 2013). When the menu is updated, it is probably because of an inevitable occurrence, and it is perceived to yield good results for the Company in terms of sales.
One more importance of the rare changes made to McDonald's menu is for the company products to maintain a constant price at all times so that losses are not made in the process of the customers having to learn of and adapt to the changes that are made on the prices of the commodities (Talpau & Boscor, 2011). Actually what may happen is that most of the consumers and or customers of these products may end up getting demoralized and looking for alternatives of the commodities whose prices have been changed? If such a thing happens, then it means that the profits of the Company which are obtained through the sales and the number of visitors visiting the Company's premises at a fee will go down drastically and thus bringing down the business. That is why the menu does not have to keep fluctuating so that the suppliers do not end up increasing the prices of the raw materials and thus increasing the production costs of the Company (Talpau & Boscor, 2011).
Environmental Conservation Process
The environment plays a vital role in the entire supply chain management processes for today's firms and organizations (Anaf, Baum, Fisher, Harris, & Friel, 2017). In this regard, McDonald's supply chain makes sure that the raw materials obtained do not end up affecting the environment in a negative manner, which will lead unavailability of the same raw materials in the future. Therefore, McDonald's Company ensures that in its supply chain, whatever process that will make it hard for them to get the raw materials is avoided so that a steady supply of materials is maintained at all times to keep the production and business up and running (Anaf et al., 2017). All the processes to source and obtain the raw materials from the suppliers are done with care so that the impacts or rather, outcomes of the same are countered in the best possible way. As a result, the supply chain process of McDonald's is always controlled in several different ways so that whatever is done is not against the environmental conservation provisions, and this has been of great importance.
The Supply Process by Suppliers
The actual process of raw materials and other commodities by the suppliers to McDonald's is always done with a lot of care and considerations so that the Company through the sales it makes ends up making good profits and not losses. It has various suppliers of the raw materials, and one of these suppliers is the Coca-Cola Company, which supplies soft drinks (Casson, 2013). The Company makes all the efforts to make sure that the costs which are spent on the supply of the raw materials are always low and in return provides the possibility of the most significant profits after the sales have been made in the restaurants and the outlets.
Therefore, for McDonald's all the suppliers are made flexible to supply at the lowest prices possible so that upon purchase of the commodities and transportation to the various destinations, the Company still stands an excellent chance to realize the best profits and does not make losses out of the high production costs (Casson, 2013). Maintaining of a low cost of supply of raw materials is not only for Coca-Cola Company alone but also for all the other known suppliers of this Company like McCain which fried potatoes to the McDonald's as well as the Bimbo which plays a vital role in making different productions for the fast food brands. All the above listed and evaluated supply chain processes of the Company have played a crucial role in shaping the fast-food Company McDonald's to reach the level it has reached. It has maximized the profits of the Company from time to time while at the same time reducing the cost of production.
Drivers of Supply Chain Performance
In the McDonald's Company from the time it was started and the advancements which it has made, there are those main drivers that have instigated the tremendous and outstanding performance of its supply chain. These drivers are actions undertaken by the management of the Company which makes the operation of the business and interaction with suppliers and customers sufficient enough such that at all times the costs of production are kept low and when it comes to profitability, stunning results are arrived at (Casson, 2013).
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