Explain how McDonalds Evolved and Managed the Components of the Supply Chain (Case Study Sample)

SUPPLY CHAIN MANAGEMENT
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TASK 1
a) What is a 'Cold Chain'? Explain how McDonalds evolved and managed the components of the supply chain (cold chain).
A group of distant storage bins or storage compounds which are transporting the products to the desired location or outlet. Thus a group of such compounds that provide storage facilities to the company are called together as cold chain. McDonalds’ have evolved the components of such a supply chain or cold chain by following certain tasks and activities which have proved to be correct and effective. Foremost has been the task of ensuring controlled conditions of storage from a given temperature and using special trucks designed for cold storage. These conditions were ensured everyday and that the drivers were instructed to maintain the cold storage at the truck in given level only. Another task which was envisaged was to maintain the optimum utilization from such vehicles and compounds such that the efficiency of the vehicles and compound reduce cost of operations, increase profitability (Itthiopassagul, Patterson, & Piyathasanan, 2009). This again was supplemented by the requirement of anticipating and forecasting future needs and resources so that any shortfalls and reduction/stoppage in delivery of goods and products might have been effectively mitigated.
This was achieved by effective information management at all the centers and storage facilities such that the information about packaging, storage and delivery were sent to all the given nodal agents – the supplier, stockist, outlet heads and driver (Ritchie, 1990). Also added to this has been the realization that such high standards of quality control would come from review and monitoring of standards of goods and also delivery.
b) 'McDonald's is one of the few companies that have Placed substantial emphasis on effective and efficient supply chain management system as a means to leverage for competitive advantage.' In the light of this statement, analyze the steps taken by McDonalds to standardize its supply chain in India. Can other retail fast-food chains and stores achieve some or all of the same results? Defend your position with examples of actual retail fast-food chains and stores.
The supply chain and management is a daunting task with increased focus on sales and augmented marketing to cater to higher demands. McDonalds’ efforts to standardize supply chain in India have been worth noticing as these have taken under stringent and very high controls to achieve higher than normal quality standards (Behera, 2009). Various efforts and mechanisms put through were following (Jahren & Schubert, 2010):
Use of iceberg lettuce from specific farming technique and cold stored to 3degreecentegrades.
Testing everything coming into the storage facilities
Use of hazard analysis critical control point to ensure quality
Use of backward integration to comply with suppliers conditions for supplying dairy products
Two production lines
Packaging was done by hand.
The specific farming technique was intended to provide the farm produce of lettuces throughout the year and was helped by the firm in being developed locally by the producers and supplier. The supply of such produce continuously throughout the year was necessary and required.
The storage facilities and bins were essential to maintain quality and create value to consumer, therefore the maintenance and upkeep of the facilities was done by checking almost everything that initially came into the bins and those that went for delivery were also checked for contamination of biological and chemical substances. This helped reduce burden on product quality and ensured clean working conditions. This was achieved both by new technique of HACCP to ensure quality and effective logistics which meant proper timing of delivery ,record of daily deliveries ,supply ,information, activities etc. The backward integration meant that the suppliers were having better effective sales of factor inputs – milk, cheese, chicken , vegetables etc. The number of production lines was reduced to two from earlier accepted point of numerous lines since the more the production lines the more the labor and testing of quality making the tasks involved into multiple levels (Adams, 2008). To maintain capacity utilization at an effective level and then reduce high costs of production this move for two lines only was achieved. Packaging however was done by hand to ensure tough standards of quality. The steps at backward integration and quality testing have been rated the best and emulating most of these aspects would be difficult for any other firm. Wendy and KFC are other fast food chains who have made inroads in the fast food retail business. While KFC has a singular focus and on chicken only with drawbacks in preparation but not in quality and distribution though, the Wendy’s has the exclusive and very unique list of products. While KFC has been able to be high on quality and standardization, the supply chain issues were not a big problem. At the sametime many of the issues at enhancing quality and distribution were meager. With Wendy the ability to build numerous supply chain units and distribution channels have faired equally well but not at same level of smoothness and delivery integration as McDonalds.
TASK 2
Strategies used to maintain effective suppliers relationships a) Critically comment on the role played by the unique centralized distribution system in McDonald's supply chain to achieve its key business objectives. Also evaluate the effectiveness of strategies used by McDonalds to maintain suppliers' relationship.
McDonald’s central distribution system is to achieve key business objectives has been well maintained in achieving cold storage facilities integration with the firm’s distribution. Also achieved is the information management handling and distribution .The various nodal agents like the store owner, stockiest ,trucker and head office are coordinating the management of tasks – dissemination of information, collection and sending of decisions for delivery and stocking .The communication for the decisions and planning at head office with the store outlets and compounds for storage belies the corporate effectiveness at the top level and is enviable .The central office or head office relays and collects information on various generated levels of objectives (Young & Nestle, 2007).These objectives of maintaining product quality, product service and cost effectiveness in operations supplements the corporate strategic objective of maintaining with the suppliers ,uniqueness of new product development, and expansion. The other objective of top quality, cleanliness and on time delivery of essential inputs has altogether benefited the business objectives of bringing cost realization for the supplier, maintaining a healthy stream of product and input ingredient delivery at good quality with minimum wastage, making the delivery on time has led to the business being ranked highly in service quality and generated capabilities in future endeavors. Central planning has lessened the risk of losing orders, making input delivery rates faster, co coordinating with suppliers at the mean and real time basis. Also the centralized planning holds key to bringing revenue from monitoring and review cost rationalization. The business model has increased in effectiveness and opportunity for growth have increased the belief and notion with suppliers of a trusted relation in business (Mcdonald, Huang, Tsagdis, &  Tuselmann, 2007).
(b) Analysts felt that Domino's took a cue from McDonald's supply chain model in India. Compare the supply chain models of both companies. Why do you think Domino's model was considered more complicated?
Many analysts have complicated the discussion between the McDonald and dominos supply chain integration models .The McDonalds supply chain integration had been built on making changes in implementation of integration with franchisees ,training and imparting effective information management through a centralized system as well as building storage for rendering clean and quality products ,maintaining effective supplier relations with on time delivery and 100 % quality of products through varied biological and chemical tests. Whereas the dominos model for supply chain integration was based more on franchise development, post control of sourcing of designed products and supply which developed into a competitive pricing thorn for the firm .Thus where the McDonalds was more involved with full integration and competitive pricing for dominos the same model of franchisee was based on uniform pricing and product, and implementing sourcing control of the product after the product had been made available to the supplier. The pressures on quality and maintenance for the two were different and varied and nowhere in particular the same. The degree of control and management of affairs at the McDonalds was better since it was centralized and had information management along with quality assurance (Walters & Rainbird, 2004). The domino’s model became complicated because the post control of supply necessitated the information and logistics delivery to be made more than once to the reported nodal agent li...