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¶ … McDonald's
Process and Location Strategy at McDonald's
In order to minimize the level of potential variation in the sourcing, procurement, production and serving of their products, McDonald's Corporation relies extensively on a repetitive focused strategy. By aligning its organization to this strategic approach to sourcing, procurement, fulfillment and service, McDonald's has been able to overcome significant challenges from a cost and performance standpoint and emerge as the global leader in the quick service restaurants (QSRs) category. One of the most significant lessons learned by McDonald's with regard to making their repetitive focused strategy successful was the need for also supporting a level of product and service customization. This required the company to continually improve upon its process areas that included Operations Research (OR) and Total Quality Management (TQM) initiatives as well (Cramer, 2009). Combining these two areas of focus with their repetitive-focused strategy also gave McDonald's the ability to optimize supply chain management and logistics...
Taken together these factors allowed McDonald's to move quickly into entirely new markets both from a geographic and demographic standpoint.
In conjunction with the repetitive focus strategy, McDonald's has an extensive supply chain network that enables its success. It is one of the few QSR chains globally to have a completely functioning and highly automated Vendor Managed Inventory (VMI) program which gives shares risk across suppliers for highly perishable goods, incouding those inventories at Golden State Foods as well (Cramer, 2009). McDonald's also relies on a comprehensive Collaborative, Forecasting, Planning & Replenishment (CPFR) workflow to allow ensure high levels of demand management and forecasting accuracy throughout their entire network of franchisees and company-owned stores globally. Combined these two strategies significantly reduce risk and increase time-to-market for new products while keeping logistics costs down (Hoffman, 2006). In addition, all of these factors are also responsible for…
References
Cramer, M.. (2009). The Emerging Role of Operations Research at McDonald's. OR-MS Today, 36(4), 22.
William Hoffman (2006, February). They're Lovin' Logistics. Traffic World, 20.
David Walters, & Mark Rainbird. (2004). The demand chain as an integral component of the value chain. The Journal of Consumer Marketing, 21(7), 465-475.
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