Mcdonalds Distribution Network 551c5o

PROJECT ON SUPPLY CHAIN MANAGEMENT

Perishable Products (Restaurant Chain)

Group

•Nikhil Jadhav (8126) •Asif Shaikh (8150 ) •Pooja Shetty (8153) •Sunil Singh (8155) •Imran Khan (8185) •Ashwin Kodati (8187)

OBJECTIVE : •• Understand Understandthe themarkets marketsbasic basicrequirements requirementsof ofthe theproduct. product.   Market Marketpotential potentialof ofthe theproduct product   Competitive Competitiveenvironment environmentof ofthe thechosen chosenproduct product   Market market dynamics dynamics in in of of consumer consumer behavior behavior about about the the product product •• Detail Detailinformation informationon onthe theSupply SupplyChain Chain   Mfg Mfglocations locationsin inIndia India   How Howproduct productreaches reachesto toconsumer? consumer?Criticality/significance Criticality/significance of ofthe theSupply Supplychain chain   Who Whoare areall allintermediate intermediatein inbetween betweenof ofMfg Mfgto tofinal final consumer consumere.g e.gdealer, dealer,C&F C&Fagent, agent,depot depotetc etc   Describe Describerole roleof ofeach eachintermediate intermediatein inthe thesupply supplychain chain

MCDONALD’S CORPORATION

McDonald’s Vision, Mission and Value Vision • To be the best & leading fast food providers around the globe

Mission • To be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile." Values • Our values summarized in “Q.S.C & V”. Provide good quality, services to customer . Have cleanliness environment when customer enjoys their meal .The value of food product makes every customer is smiling.

Quick Facts About McDonald’s • McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California,US in the year 1937. • By mid-1950s, the restaurant's revenues had reached $350,000. • Ray Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954. • He established a franchising company, the McDonald System Inc. and appointed franchisees. • In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public…

McDonald's In India • 1996 - First restaurant opens in India, at Basant Lok,Vasant Vihar, New Delhi.

• McDonald's India is a 50 – 50 JV partnership between McDonald’s Corporation (U.S.A) and two Indian businessman Amit Jatia (Hardcastle Restaurants Private Limited, Mumbai)and Vikram Bakshi (Connaught Plaza Restaurants Private Limited, Delhi). • Two separate operations in Northern & Western India. • Partners and their management teams trained extensively in Indonesia & the U.S. • Approximately 75% of the menu available in McDonald’s in India is Indianized and specifically designed to woo Indian customers. • The McDonald's philosophy of QSC&V is the guiding force behind its service to the customers.

Market potential of the McDonald’s

• McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales, with more than 31,000 restaurants serving burgers and fries in almost 120 countries. Sales, 2007 (11,4009 million), 5.6% sales growth • t ventures with retailers (e.g. supermarkets). • Consolidation of retailers likely, so better locations for franchisees. • Respond to social changes - by innovation within healthier lifestyle foods. Its move into hot baguettes and healthier snacks (fruit) has ed its new positioning. • Use of CRM, database marketing to more accurately market to its consumer target groups. It could identify likely customers (based on modeling and profiles of shoppers) and prevent brand switching. • Strengthen its value proposition and offering, to encourage customers who visit coffee shops into McDonalds. • The new “formats”, McCafe, having Wifi internet links should help in attracting segments. Also installing children’s play-parks and its focus on educating consumers about health, fitness. • Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages. • International expansion into emerging markets of China and India.

Competitive environment of the Restaurant Chain (MCD)

Competitive environment

McDonald’s India: Channel Network

McDonald’s India: Network & competitors

How product reaches to consumer? Criticality/significance of the Supply chain

Geographically Diverse suppliers: Ensuring stringent quality standards

The McDonald’s Supply Chain

Import Breath of supply process control equipment Supplier performance index

No direct control over issues, positive influence by raising questions, bringing people to the table and encouraging improvement

VALUE CHAIN ANALYSIS OF MCDONALD’S

Inbound logistics

•Organizing the supply of food and materials to restaurants through approved third party logistics operators.

Inbound Logistics

•Production in huge plants denoted exclusive to McDonald’s control food distribution and packaging system

Operations

Firm

•R&D in field research needs of end s. • quality development in Relatively Few collaboration with good Management Layers to Infrastructure suppliers Reduce Overhead Effective Training Programs •Forward to Improve Worker integration: Efficiency and Effectiveness through franchisees with

Human Resource Management

Investments in Technology in order control over store to Reduce Costs Associated with presentation, Manufacturing Processes menu items

Technological Development

etc. and enhance

Procurement

Frequent Evaluation Processes to participation in process Monitor Suppliers’ Performances

Policy Choice of Efficient Order Plant Technology Sizes Organizational Learning

Small, Highly Trained Sales Force Products Priced to Generate Sales Volume

Service

Outbound Logistics

Operations

Inbound Logistics

improvement

Efficient Plant Delivery Schedule Scale to Minimize that Reduces Manufacturing Costs Costs Selection of Low Timing of Asset Cost Transport Purchases Carriers

Outbound logistics

Firm Infrastructure

•Is the concern of the franchisee.

•Outbound logistics are growing as a part Human Resource Management of McDonald’s recycling system Technological Development integrating in the logistics of Frequent Evaluation Processes to distribution center Procurement Monitor Suppliers’ Performances

Efficient Order Sizes

National Scale Advertising

Interrelationships with Sister Units

Marketing & Sales Service

Selection of Low Cost Transport Carriers

Effective Product Installations to Reduce Frequency and Severity Products Priced to of Recalls Generate Sales Volume

Outbound Outbound Logistics Logistics

Delivery Schedule Small, Highly that Reduces Trained Sales Costs Force

Marketing

Firm Infrastructure Human Resource Management

Outbound Logistics

Operations

Inbound Logistics

Procurement

•Country teams are given autonomy in marketing mix decision.

•Advertising & PR is outsourced (Mudra agency in India)

Marketing & Sales Marketing & Sales Service

Technological Development

•Long term marketing objectives are broken down into shorter term measurable targets, which McDonald uses as milestones.

Service

Services Firm Infrastructure provided by the companies enrollment Human Resource Management standards

Technological Development

Marketing Service & Sales Service

Outbound Logistics

Inbound Logistics Operations

Procurement

Procurement

Firm Infrastructure Human Resource Management Technological Development

Marketing & Sales Service

Outbound Logistics

Inbound Logistics Operations

Procurement Procurement

Sought partners with expertise on down trade distribution

R&D

Firm Infrastructure Human Resource Management Technological Development

Service

Outbound Logistics

Operations

Procurement Marketing & Sales

Inbound Logistics

Technology and development research in quality assurance, and packing readdressed at lower cost, faster delivery chain system and process control equipments, recycling system.

HRM

Firm Infrastructure Human Resource Management Technological Development

Service

Marketing & Sales

Outbound Logistics

Operations

Inbound Logistics

HRM specialists in R&D Procurement and expertise in food formulation, education to raise awareness of issues and raise demand. The addressing environmental issues and CRS.

INFRASTRUCTURE

Activities

Firm Infrastructure Human Resource Management Technological Development

Service

Marketing & Sales

Outbound Logistics

Operations

Inbound Logistics

Strong real estate portfolio. International organization more than 50000 employees works in more than 50 countries,

Process:

 Who are all intermediate in between of Mfg to final consumer.  Describe role of each intermediate in the supply chain

Vital links of Mc Donald’s cold chain. • McDonald's spent a few years setting up a unique Cold Chain. • The Cold Chain is necessary to maintain the integrity of food products and retain their freshness and nutritional value.

Procurement

warehousing

Transportation

Retailing of food product

SUPPLIERS • Trikaya Agriculture Supplier of Iceberg Lettuce • Vista Processed Foods Pvt. Ltd. Supplier of Chicken and Vegetable range of products (including Fruit Pies) • Dynamix Diary Supplier of Cheese • Amrit Food Supplier of long life UHT Milk and Milk Products for Frozen Desserts

Distribution Radhakrishna Foodland Distribution Centres and cold storages. •Completely dedicated distribution and supply chain. • Matching supplier production with deliveries using ERP. •Quality inspection Program, quality check at 20 different points in supply chain. •HAC(Hazard analysis critical control points) food safety standards emphasizing prevention of faults.

The five main performance objectives are: • Speed • Cost • Quality • Dependability • Flexibility