This SUPPLY CHAIN MANAGEMENT Presentation ON McDonald

1. Supply Chain Management
On
Submitted By:-
Mr. Mahadev Yadav
Mr. Yogesh Marathe
Mr. Satish Argia
Mr. Sudhir Pawar
Mis. Nikita Kadam

3. INTRODUCTION TO McDonald's
• Leading global food service retailer
• 32, 000 local restaurants, 60 million people,
more than 100 countries
• Hamburgers, Chicken sandwich, French
fries, soft drinks, breakfast items and
desserts
• Local deviation from the standard menu
• Abide by regional taboos
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4. McDonald’s History
• McDonald's originally started as a small hamburger stand in
Bernardino, California, owned by Richard and Maurice
McDonald in 1945.
• Re-opened in December 1948 as a self-service drive-in
restaurant.
• In 1950s Ray Kroc, a Multimixer Salesman, signs a franchise
agreement with Richard and Maurice McDonald in the name of
McDonald Corporation at Illinois in 1955.
After few years in 1961, Ray purchased the ownership
from McDonald brothers.
Today 34,000 McDonald's restaurants serving 69 million
customers each day in over 119 countries.

5. McDonald’s Statement
Vision Statement
• To be the best and leading fast food
provider around the globe.
Mission Statement
McDonald's mission is to be our
customers' favorite place and way
to eat with inspired people who
delight each customer with
unmatched
• Quality
• Service
• Cleanliness
• Value

6. McDonald’s In India
 The 1st McDonald's restaurant in
India opened on 13th October 1996 at
Basant Lok in New Delhi.
 It was the first McDonald's restaurant
in the world to not serve beef and
pork based products. Its authority on
non-beef and non-pork products still
remains unchallenged.
McDonald's in India is a joint-venture
partnership run by two Indians,Amit Jatia’s
company, Hardcastle Restaurants Private
Limited owns and manages McDonald's
restaurants in the west.
While in the north, McDonald's Restaurants
are owned and managed by Vikram Bakshi’s
Connaught Plaza Restaurants Private
Limited"

7. McDonald’s Products

8. McDonald’s– FOUR PILLARS OF
SUCCESS
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9. McDonald’s E-Procurement
• McDonalds E-Procurement System is basically a main reason for their
successful supply chain management.
• It is so efficient that it provides the backbone not only to all the
logistics but the whole McDonalds supply chain management.
• E-MAC Digital:
(Internet procurement site designed for McDonald's Corporation's
34,000 franchises)
• E-MAC Digital Company is E-Procurement website which is jointly
owned by McDonalds and Accel-KKR Internet Co.
• It is a procurement hub launched in 2001 allow all of McDonald's
franchises across the globe to buy everything needed to run their
restaurants.

10. McDonald’s E-Procurement
• In the process of procuring a product, a
typical McDonald’s franchise restaurant
places an order through E-MAC digital
website.
• The order is sent to the suppliers. Suppliers
order is processed and managed by the
logistics.
• The logistics sends the order of the products
to the franchise restaurants. It is the
responsibility of the E-MAC and logistics
that the products are sent to the restaurant.
• All the above, steps are handled and
executed by the E-MAC digital.

11. McDonald’s E-Procurement
Place Orders Supply Received
E-MAC Digital
Franchises
Suppliers Logistics

12. Coca Cola is McDonald’s beverage partner.

13. Suppliers of McDonalds in India

14. 3 Logistical Drivers
• Facilities- they are the actual physical location in the supply
chain network where the product is stored, assembled, or
fabricated. The two main facilities are production sites and
the storage sites. In McDonalds, because the products are
perishable, storage time was minimal so as to reduce the
wastage.
• Transportation- it is the process where the inventory is
moving from place to place. Refrigerated vans are used here
in this case.
• Inventory- it includes raw materials, work in progress, and
finished goods within a supply chain

15. McDonald’s Logistics

16. Logistics of McDonalds
• Handled by AFL Logistics Ltd.
• ~100 sales items in the restaurant
• ~400 SKUs in the warehouse (Hubs: up to 1,500)
• ~200 restaurants per DC (~180 DCs globally)
• Delivery frequency: ~3/wk, higher in urban areas
• Exclusive distributors
• Long term partnerships with service providers,
risk sharing
• Strong quality focus (Cold Chain, HACCP)
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17. Logistics & Supply chain management
 4 Distribution Centers (DC) owned by the company :-
 Delhi Mumbai Bengaluru & Kolkata
 Employees strength of McDonalds India is 9,000 people in total
across the country.

18. McDonald’s Logistics
• The transportation of McDonald’s has been
completely outsourced and since 80% is in
refrigerated truck movement.
• Multi-temperature and single temperature
trucks transport the fast food swiftly to the
McDonald’s restaurants across the country.
• The company has both cold and dry
storage facilities with capability to store
products up to -22º C as well as delivery
trucks to transport products at
temperatures ranging from room
temperature to frozen state.
• The specially designed trucks maintained
the temperature in the storage chamber
throughout the journey.

19. McDonald’s Logistics
INBOUND LOGISTICS
• It is the movement of materials from suppliers and vendors into production
processes and storage facilities.
• Based on the demand forecast, Manager orders the Venus Distributors on daily
basis.
• Venus Distributors stores all the raw materials, in its own cold stores and
delivers only one-day material to the restaurant.
• It also received the DQMP (Distribution, Quality, and Management Process)
Certification from McDonalds USAAudit Team.
• Some branch has its own cold storage facility, which is used to store the daily-
procured raw material.

20. McDonald’s Logistics
COLD CHAIN LOGISTICS
• A cold chain is a temperature-controlled supply chain.
• It is used help extend and ensure the shelf life of products such as fresh
agricultural produce, processed food.
McDonalds’ entire network supply-chain consists of movement
of goods through a cold chain
An interesting and innovative feature of this cold chain is that the same truck
can carry products at different temperatures
ranging from:
• Frozen products at -18C to -25C
• Chilled products from 1C-4C
• Dry products at ambient temperatures

21. COLD CHAIN PARTNERS
1. Dynamic Dairy Industries - Supplier of Cheese
– Baramati, Maharashtra
– Immense benefit to farmers by setting up a network of milk
collection centres equipped with bulk coolers
– 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
– Stringent quality control measures and continuous Research
& Development
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22. COLD CHAIN PARTNERS (Cont.)
2. Trikaya Agriculture-Supplier of Iceberg Lettuce
– Talegaon, Maharashtra
– Grow lettuce all year round with the help of experts from Mc
Donalds
– A specialized nursery with a team of agricultural experts
– Vegetables are moved into the pre-cooling room within half an
hour of harvesting.
– The pre-cooling room ensures rapid vacuum cooling to 2º 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
– Refrigerated truck for transportation.
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23. COLD CHAIN PARTNERS (Cont.)
3. Vista Processed Foods Pvt. Ltd. -Supplier of Chicken and
Vegetable range of products including Fruit Pies
– 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
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24. COLD CHAIN PARTNERS (Cont.)
4. Radhakrishna Foodland -Distribution centers for
Delhi and Mumbai
– Thane, Maharashtra
– Handles large volumes
– Services include procurement, quality inspection, storage,
inventory management, deliveries, data collection, recording and
reporting
– Dry and cold storage facility to store and transport perishable
products at temperatures upto -22 Degree Cel.
– 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
– Very vital role in maintaining the integrity of the products
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25. COLD CHAIN PARTNERS (Cont.)
5. Amrit Food - Supplier of long life UHT Milk and Milk Products for
Frozen Desserts
– Ghaziabad, Uttar Pradesh
– ISO 9000 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.
– Strict quality control supported by a fully equipped quality control
laboratory.
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27. Reverse logistics
• The buns are packed in
plastic crates to ensure
their quality.
• These crates have to go
back to the bakeries,
that’s when return
logistics takes place.

28. McDonald’s Operation
• Cooking procedure and recipe is documented so that the products
become standardized and customers get the similar taste, quantity and
quality to whichever restaurant they go.
• It is the policy of McDonald's to throw away any burger if they
remain on heated grill for 15 minutes.
• All the utensils and equipment used in cooking are washed at the
closing of restaurant every night, with anti-microbial fluid. Kitchen,
floor, washrooms and all other restaurant areas are cleaned after
every half an hour.

29. Process Optimization

30. ORDER PROCESSING system
 Cash & cashless payments
 Online Orders :-
 Online menu
 Delivery fees
 Redeeming discounts
 Cancellations
 McDonald’s Delivery

31. ORDER PROCESSING SYSTEM

32. TRANSACTION
PROCESSING SYSTEM
(TPS)
“POINT OF SALE”
SYSTEM
DECISION SUPPORT
SYSTEM (DSS)
“MADE FOR YOU”
SYSTEM

33. McDonald’s Logistics
OUTBOUND LOGISTICS
• Outbound logistics is the process related to the storage and
movement of products from the end of the production line to the
users end.
• When customers enter the restaurant, they go to the counter, give
their order, which they are served within a single minute.

34. SUPPLY CHAIN INTEGRATION
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35.  Significant business benefits to both the customer and the supply
chain
 Enablers
 One stop shopping concept - Central file management
 Inventory management - Restaurant simplification
 Synchronizing the perishable Supply Chain
 Demand forecasting
 Promotional + Continuous Supply
 Supplier and DC level
 Supply Planning
 Restaurant and DC level
 Visibility and Collaboration across the chain
RESULT OF SUPPLY CHAIN
INTEGRATION

36. McDonald’s Market Share
30%
25%
15%
10%
5%
15%
Market Share
McDonalds KFC
Subway Mr. Burger
 McDonalds has surpassed its
competitors by Indianinzing
more than 85% of its menu.
 Thinks Global, Acts Regional

37. CONCLUSION
• McDonald‟s Supply Chain is quite uniquely
handled with least number of employees on
McDonald‟s payroll. The control on
outsourced entities is commendable. With
ever growing business of fast food
McDonald‟s has laid down its systems
efficiently and expanding at enormous
speed. The model can be replicated in other
sectors as well.

38. THANK YOU