Mcdonald\'s Corporation: Assessment of Process Strategies Assessing

McDonald's Corporation: Assessment Of Process Strategies

Assessing McDonald's Process and Location Strategies:

Best Practices in Quick Service Resturants (QSRs)

McDonalds' Corporation has over decades of experience with its supply chains, sourcing and procurement networks learned how to create an optimally balanced fulfillment network to support is thousands of QSR locations globally. In order to achieve the economies of scale the company has been able to rely on for continued profitable operations, the focus has shifted away from pure customization to support mass customization and a very high level of consistency of process execution to reduce costly variation in orders, products, pricing and service. This standardization of processes has given the company a formidable competitive advantage and made them the global leader in repetitive focused strategies in the QSR industry worldwide (Cramer, 2009). In support of this repetitive-focused strategy, McDonald's continues to invest heavily in Total Quality Management (TQM) initiatives that include Six Sigma process improvement efforts, a concerted effort on Operations Research (OR) optimization of processes and system, and the development of enterprise-wide compliance management and analytics reporting (Cramer, 2009). This focus on repetitive strategies has also created a highly effective foundation fro continual supply chain improvements and enhancements as they relate to the broader supply chain ecosystem and its associated quality levels (Cramer, 2009). These investments in TQM and associated quality management initiatives has given McDonald's the ability to expand rapidly on a global scale as well, a benefit even the company did not realize was as potent as initially seen from pilot studies (Hoffman, 2006).

What differentiates McDonalds' from the many QSRs operating globally today is the focus on how to bring in advanced supply chain management concepts and frameworks into their diverse supply chain, sourcing and demand management and demand planning workflows. One of their many innovations in this area of advanced supply chain management is the use of Vendor Managed Inventory (VMI) frameworks and associated enterprise software to unify their several sourcing and supply chains across the U.S. And North America including their well-known and recognized trucks delivering fresh produce to restaurants, Golden State Foods trucking and logistics (Cramer, 2009). As McDonald's relies on a very diverse supply chain, logistics and fulfillment system, the headquarters had to be located in a central region of the U.S. To enable efficiency of supply chain operations. Of the many potential areas that the chain could have located its headquarters, the company chose a suburb of Chicago. Oak Brook, Illinois headquarters of McDonald's is ideally located near a dozen 3rd party and 4th party logistics providers, in addition to many freight airlines who operate out of O'Hare International Airport. McDonald's chose to pursue this strategy due to the flexibility of getting air shipments literally anywhere by air anywhere in the Continental U.S. within three hours (Cramer, 2009). The proximity to several leading universities who have world-recognized marketing and market research departments including the University of Chicago is also a benefit for recruiting and consulting on key issues facing the company (Hoffman, 2006).