McDonald's Operations Management (Research Paper Sample)

An Assessment of the Operations Performance in McDonald’s
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Executive Summary
This report focuses on the operations management at the McDonald’s corporation. It highlights and discusses the performance objectives of operations management with clear reference to McDonald’s corporation, which has been used as the organization of choice in the report. The report discusses the performance objectives, which include quality, flexibility, dependability, speed and cost. Further, the report discusses the Four Vs of operations activities at the organization. Four V’s analyse how the volume, variety, variation and visibility of the organization’s processes affect its cost effectiveness and how they relate to the performance objectives. The discussion includes order qualifiers and winners in an effort to identify the competitive advantage of the organization in its highly competitive business environment. Lastly, the report gives recommendations on how the organization can improve its services and product delivery in the future by focusing on the performance objectives and four Vs. These include improved quality through utilization of better technology and specialization in response to ever-changing customer needs. In addition, the report recommends increased variety and dependability of services and products to comply with delivery schedules and meeting the needs of customers who desire increased choice in the products and services that can be accessed from the organization.
Introduction (423)
Operations Management refers the design, operation and improvement process of the systems through which an organization delivers is services and products to its customers and clients (Andrew, 2008, p. 2). Further, it refers to the process of planning, scheduling and controlling of activities through which an organization transforms inputs into finished goods and services CITATION Hai05 \p 1 \l 1033 (Haizer & Render, 2005, p. 1). In detailed analysis, operation management is the process through which an organization focuses on effective planning, scheduling and control of processes in either manufacturing or service delivery through design engineering, quality management, accounting, management information systems and other functions that may affect its operations in relation to its core business CITATION Bre11 \p 12 \l 1033 (Brennan, 2011, p. 12). Through operation’s management, an organization is able to make the best use of its resources to provide finished goods and services required by customers in a timely and cost effective manner CITATION And08 \p 21 \l 1033 (Andrew, 2008, p. 21). This report is an assessment of the Operations Performance in McDonald’s food service retailer.
McDonald’s is the world’s largest global foodservice retailer, with operations in 119 countries, serving 68 million people daily CITATION Ott12 \p 36 \l 1033 (Otto & Waterson, 2012, p. 36). The organization is characterised with high efficiency in its operations and its service to customers. The organization has a rich history since its formation in 1954 and offers a variety of common fast foods including hamburgers, cheeseburgers, sandwiches, salads, French fries, milkshakes, and deserts among many others CITATION Ott12 \p 8 \l 1033 (Otto & Waterson, 2012, p. 8).
With its magnitude in scope of its operations and locations across the world, operations management is a very important tool in the success of McDonalds and any other organization. Firstly, operations management allows an organisation to improve its productivity. In this case, operations management allows an organization to measure its input/output ratio of its managers or employees efficiency in their utilization of scarce resources to produce goods and services CITATION And08 \p 24 \l 1033 (Andrew, 2008, p. 24). For an organization to be profitable and efficient, it must be able utilise maximally its resources towards the delivery of services and goods. Through operations management, an organization tries to ensure that its inputs are reduced as much as possible, while ensuring maximum outputs. Secondly, operations management allows an organization to meet its customer’s competitive priorities CITATION Bre11 \p 21 \l 1033 (Brennan, 2011, p. 21). This is through ensuring that there is good customer relations process, efficient and timely delivery of required services or products and high quality services and products for the customers. This ensures that an organization gains competitive advantage over its competitors, which ensures profitability of the organization. Therefore, operations management is a very important tool for McDonald’s to ensure that the organization attains efficiency and competitive advantage through utilisation of its scarce resources in the highly competitive market environment.
Performance Objectives (782)
There are five performance objectives, which must guide any organization to ensure that its operation management processes bring the best advantages to its operations, and service and products delivery. These objectives include quality, speed, dependability, flexibility and cost CITATION Mar00 \p 16 \l 1033 (Marlin, 2000, p. 16). Operations management has impact on its stakeholders including customers, suppliers, shareholders, employees and society and it is important to understand how these performance objectives of the operations management affect the organization’s stakeholders and consequently the business.
The first objective is quality. Quality means that an organization’s products and services as expected and conform to their identified specifications CITATION And08 \l 1033 (Andrew, 2008). An efficient operations management process ensures that an organization is able to maintain or continuously improve the standards of its products and services to meet or surpass their specifications and customer expectations CITATION Bre11 \l 1033 (Brennan, 2011). At McDonalds, quality is ensured through well-established quality control and assurance processes, which are beneficial to the organization at two levels CITATION Ott12 \l 1033 (Otto & Waterson, 2012). Firstly, the external effect of good quality of services and products is that there are less or no complains from customers and this leads to customer satisfaction that bring more revenue to the organization through customer loyalty CITATION Hai05 \p 26 \l 1033 (Haizer & Render, 2005, p. 26). Secondly, internally, quality ensures that the operations activities of the organization have very few or no mistakes, which translates to faster response to customers needs and costs of production are minimised as there is less or no wastage CITATION Hai05 \p 27 \l 1033 (Haizer & Render, 2005, p. 27).
The second objective of operations management is speed. Speed refers to the duration taken between when a customer requests for a service or product and when the customer receives the service or product CITATION Mar00 \p 33 \l 1033 (Marlin, 2000, p. 33). Speed is very important especially in McDonald’s. It is the organization that introduced ‘fast’ in fast food and the speed of its service delivery is therefore one of the key cornerstones of its business model CITATION Ott12 \p 24 \l 1033 (Otto & Waterson, 2012, p. 24). For instance, McDonald’s recognises the importance of speed of service delivery in its McDonald’s drive thru outlets, where it strives to allocate 90 seconds limit of service delivery to customers CITATION Ott12 \l 1033 (Otto & Waterson, 2012). By ensuring customers are served fast, the organization is able to serve many customers at any given duration, which translates to customer loyalty and profitability.
The third operations management objective is dependability. In this objective, an organization strives to ensure that it is able to meet client’s needs on time and as promised. For instance, McDonald’s strives to serve its drive through customers in 90 seconds. Dependability is this case refers to the ability of the organization to serves its customer’s within the duration slated CITATION Bre11 \l 1033 (Brennan, 2011). McDonald’s builds customer values on customer experience by provision of high quality food and superior services CITATION Ott12 \l 1033 (Otto & Waterson, 2012). It is therefore very important for McDonald’s to ensure that its services and processes guarantee dependability of its services and products. Further dependability is important measure for suppliers as this is the criteria, which McDonald’s and other organization use to determine their continued engagement by renewal of contracts CITATION Bre11 \p 35 \l 1033 (Brennan, 2011, p. 35).
The fourth objective of operations management is flexibility. Flexibility can be defined as the quality of an organization to change its processes or services in responses to changing stakeholder demands and business environment CITATION Mar00 \l 1033 (Marlin, 2000). In an organization, flexibility allows an organization to respond to changes in the business environment with an objective of improving service delivery and increasing profitability. At McDonald’s, the organization has invested in research to improve quality of food, and responding to customer complains whenever they arise CITATION Ott12 \l 1033 (Otto & Waterson, 2012). Further, the organization ensures it’s flexible by changing how it delivers services to customers, in response to changes in the business environment. For instance, in response to customer complains on the time taken in drive thru outlets, the...