McDonalds Quality and Improving Operations

Quality and Improving Operations
McDonalds Corporation is the leading fast-food restaurant across the globe. Since inception the company has experienced tremendous growth and profitability due to its adoption of sound business philosophies and practices. McDonalds has become a symbol of globalization given its successful expansion to various parts of the globe. The other factor that has contributed to McDonalds’ success and profitability worldwide is its effective operation function. The company has streamlined its operation function from obtaining raw materials to production to distribution of food items/products to its customers. McDonalds Corporation has established a relatively effective operations management framework that helps in handling all its functional areas. In relation to the Operations Management framework, this paper examines quality and improvement of operations at McDonalds Corporation.
Part 1 – Quality and Conformance
McDonalds Corporation operates in an increasingly competitive fast-food industry across the globe. Despite its market share and position, this company still faces stiff competition from other rivals in the market. Throughout its operations, McDonalds Corporation focuses on excellent customer service, response to competition, and utilizing suitable techniques to enhance growth and development (Keller, 2017). As part of providing excellent customer service and ensuring customer satisfaction, McDonalds emphasizes quality as part of its operations management framework. The company’s operations management framework is established on the premise of ensuring quality in all functional areas.
Philosophy on Quality
As previously indicated, McDonalds’ operations management is centered on an emphasis on quality. To this extent, McDonalds has a clear statement on quality, which is incorporated into its activities. In addition, the company utilizes an effective quality system that enhances the efficiency and effectiveness of its functional areas. According to Ka-Singh (2019), McDonalds’ philosophy statement on quality is to provide high-quality food and excellent customer service to all customers in a clean and welcoming environment at great value. The company’s philosophy on quality is based on the principle of QSCV, which also acts as customer service philosophy. Quality, Service, Cleanness, Value (QSCV) is McDonalds clear statement on quality and the principle of customer service. Under quality, the company focuses on accurate selection of raw materials for its food items. In relation to service, McDonalds focuses on promoting quick, attentive and friendly service that leads to 100% customer satisfaction. The company also seek to provide its services in clean stores and utilize customers’ needs and demands as the premise for product development initiatives.
McDonalds ensure that this philosophy is incorporated into its business activities through including it in customer service efforts. McDonalds philosophy on quality is the core of customer service standards and business activities carried out in the company. In this regard, the company has established a system for obtaining customers’ requests in a timely manner and meeting these requests in a fast, attentive and friendly manner (Hu & Xie, 2013). In addition, the company has ensured incorporation of this philosophy in all activities by using it as the foundation for its supply chain and value proposition strategy. McDonalds Corporation also formulates all its yearly strategic plans based on this philosophy of quality and customer service (Ka-Sing, 2019). Through incorporating the philosophy in the annual strategic plans, McDonalds ensures that all its activities reflect the emphasis on quality. To ensure the incorporation of this philosophy on quality in all business activities, McDonalds utilizes Total Quality Management (TQM) system. Using TQM, all McDonalds’ restaurants or fast-food outlets have responsibility for ensuring quality as employees are empowered and given the responsibility of ensuring quality in all operations. Additionally, the company utilizes this system to carry out continuous product improvement and quality customer service based on combination of customers’ needs and wants.
Management of Quality
The management of quality at McDonalds is the responsibility quality control and quality assurance departments. These departments comprises individuals from cross-functional departments, especially product/service development department. Quality control and quality assurance departments at the company are mandated with the responsibility of conducting proper quality control and assurance assessments. Insights derived from these assessments is utilized to shape product development initiatives toward the production of high-quality products. To carry out their responsibility in an efficient and effective manner, the quality control and quality assessment departments utilize Quality Inspection Program (QIP). Through this program, these departments ensure that all products are in perfect condition. Some of the metrics utilized in the quality inspection and control process include nutritional value and freshness of the raw materials/food items.
According to Nanyang Consultancy (2016), quality control at McDonalds is based on two major components i.e. supplier quality control and public perception of quality standards. Through these components, the company adopts stricter global quality control standards in the fast food industry. To ensure that quality is maintained across all company activities, the quality control and quality assurance departments use QIP to monitor suppliers through geography-based markets. With regards to public perception of quality standards, the company conducts customer and public surveys relating to quality. For instance, the company regular conducts social media led campaigns that focus on obtaining public perception on its quality standards.
There are three major performance measures established by McDonalds as part of management of quality. These three performance measures are quality control, refocus of core customer value proposition, and McHEARTS. Quality control entails examining the percentage of suppliers and firms complying to global standards relating to the fast-food industry while refocus of core CVP entails conducting customer satisfaction surveys and obtaining data regarding service teams. On the other hand, McHEARTS entail conducting customer and franchise satisfaction surveys as well as examining sales contribution in relation to the desired profitability goals (Nanyang Consultancy, 2016).
Conformance Levels
McDonalds has recently witnessed a slump in its global comparable sales, which has become a common characteristic of its results (Team, 2015). The company continues to experience a decline in comparable sales at a time when the industry is characterized by intense competition. The company has seemingly lost its reputation and experience a decrease in its customer base. The relatively poor performance in global comparable sales by McDonalds Corporation is an indicator of poor conformance levels to its own quality standards. The company is seemingly performing poorly against its own quality standards and measures, which has significantly affected its market performance. The poor conformance levels to its own quality measures is also evident in the firm’s slow response to food safety concerns. Unlike its competitors who have increased focus on quality, McDonalds has relatively been slow in responding to food safety concerns and essentially compromised its quality standards.
Given the poor reputation and poor performance in global comparable sales, McDonalds has undertaken corrective steps or actions to address this issue. These corrective actions have entailed a renewed emphasis and focus on quality improvement in all company activities, especially those that directly relate to food production. This renewed emphasis and focus has entailed establishing a turnaround plan that not only focuses on improving sales, but also incorporates quality improvement. The company has renewed its focus on the quality and safety of all its products as a means of meeting its own quality standards and enhancing profitability in the market (Team, 2015). The turnaround plan seeks to correct the poor performance against its own quality measures through providing critical business strategies and processes to be undertaken to improve quality in all business operations.
Part 2 – Strategic Implications
Operations and operations management are critical to the success and profitability of any business organization. In light of the intense competition that has characterized the modern business environment across different sectors, businesses are faced with the need to improve operations. Hill & Hill (2011) states that operations need to be improved in order to meet several corporate objectives such as lessen costs, improve market support, enhance profitability or financial performance, and release cash. There are various techniques such as incremental improvements and breakthrough improvements that a company can utilize to enhance operations depending on the corporate objectives to be achieved.
Improving Operations at McDonalds Corporation
As shown in recent reports, McDonalds Corporation has experienced a decline in its global comparable sales at a time when its competitors are seemingly performing better. While the company can benefit from adopting corrective measures to meet its own quality measures/standards, the poor performance in the market also requires improvement of operations. As previously indicated, improving operations is critical toward the success and profitability of any business organization (Hill & Hill, 2011).
In light of the current situation facing the company, McDonalds Corporation could benefit from adopting a proactive approach for improving operations. Hill & Hill (2011) states that proactive approach for improving operations in a business organization entails developing an improvement culture throughout the organization. The current poor global comparable sales that have characterized McDonalds Corporation are indicators of a relatively ineffective poor organizational culture. Such a culture has contributed to compromise in quality standards and slow response to food safety concerns that have characterized its operations.
Therefore, a proactive approach could help address this issue through the establishment of an improvement culture throughout the organization. This is critical because the current situation facing the company requires the use of an approach that would lead to driving improvement across all operations. This approach to improving operations would benefit the company by creating concerted efforts toward enhancing product quality and customer service. Using this approach, all internal stakeholders in the organization ranging from managers to employees will look for ways to make improvements. This would in turn make it easy to create buy-ins for the improvement processes since everyone is involved in the process including in decision-making aspects.
For McDonalds Corporation, a proactive approach for improving operations seems to be the most suitable since the company has given all restaurants the responsibility and power to ensure quality in their operations. This implies that each restaurant is better-placed to identify critical areas in their operations that require improvements and how to implement such improvements. Unlike a passive approach, this proactive approach ensures that everyone in the company becomes responsible for identifying ways to enhance operations as part of quality improvement and increasing profitability.
Alternative Approaches
While the proactive approach is a suitable mechanism for McDonalds to enhance its operations, the company can also benefit from the use of alternative approaches for operations management or improving operations. The two alternative approaches for improving operations at McDonalds are incremental improvements and breakthrough improvements techniques. With regards to incremental improvements technique, the company could make smaller more frequent improvements (Hill & Hill, 2011). This would entail identifying problematic processes, methods or practices that require improvements and making small tweaks more frequently (Mulholland, 2018). In this regard, the process would involve identifying areas in quality processes and issues on food safety and making small changes. On the other hand, the company could also utilize breakthrough improvements approach to help improve operations. Unlike incremental improvements, breakthrough approach requires making major changes to existing organizational practices and processes. For McDonalds, breakthrough improvements would require committing large resources to make major changes or tweaks in operations.
Implications for Operations
The use of these alternative approaches by McDonalds to improve operations would have some strategic implications for operations and the organization. In light of the current situation facing the company in terms of its profitability and success, McDonalds need to improve the quality of its products and customer service. The improvement of the quality of products would help address the food safety concerns that have characterized its operations and contributed to poor reputation and global comparable sales. In this regard, McDonalds can either utilize incremental improvements or breakthrough improvements to enhance the quality of its food products or items.
The use of incremental improvements approach would entail identifying areas in food production processes that require changes. This approach would impact operations by generating changes in food production processes. The company will need to identify measures that can be implemented to enhance the quality of food products and ensure the implementation of these measures across all operations. Small tweaks using incremental improvements would have positive impacts on operations since they would not require large resources or generate major changes in current operations. Therefore, employees will find it easy to implement these small tweaks while the organization will incur minimal costs in executing the changes.
On the other hand, breakthrough improvements have significant impact on operations and the organization given the resources required to implement them. The major impact of this approach on operations is major improvements in key business areas. The use of this approach would entail making holistic changes to current food production processes. Breakthrough improvements would affect the organization by generating additional demands on the workforce as large resources and changes are made within a short period of time (Crom, n.d.). Holistic changes in the production processes would be complex to implement within a short time.
In conclusion, operations and operations management are critical toward the success of any business organization. McDonalds Corporation has experienced tremendous success and profitability over the years through suitable operations management framework. However, the company has experienced challenges in recent years because of the decrease in global comparable sales. In this regard, McDonalds Corporation needs to adopt suitable measures for improving operations. There are various approaches that the company could adopt including proactive approaches, incremental improvements or breakthrough improvements. Any of these approaches has significant strategic implications on operations and the organization.
References
Crom, S. (n.d.). Managing for Continuous and Breakthrough Improvement. Retrieved June 13, 2019, from https://www.isixsigma.com/implementation/basics/managing-continuous-and-breakthrough-improvement/
Hill, A. & Hill, T. (2011). Essential operations management. New York, NY: Macmillan International Higher Education.
Hu, W. & Xie, Y. (2013, April 28). Comparative Study of McDonald’s and Kentucky Fried Chicken (KFC) Development in China. Retrieved June 13, 2019, from https://pdfs.semanticscholar.org/ab1d/769d45deb5a0e03d147a04cb27fff30e6ae6.pdf
Ka-Sing, L. (2019, May). Guiding Principles a Recipe for Success. South China Morning Post. Retrieved June 13, 2019, from https://www.scmp.com/article/1006977/guiding-principles-recipe-success
Keller, C.R. (2017, September 1). How McDonald’s Became the Leader in the Fast Food Industry. Retrieved June 13, 2019, from https://profitworks.ca/hidden-blog/541-how-mcdonald-s-became-a-leader-in-fast-food-industry.html
Mulholland, B. (2018, April 6). What Continuous Improvement Is (and How to Use It). Retrieved June 13, 2019, from https://www.process.st/continuous-improvement/
Nanyang Consultancy. (2016, January). McDonalds – Charting McDonalds Way Forward. Retrieved June 13, 2019, from https://mbacasecomp.com/wp-content/uploads/2016/01/Nanyang_Mcdonalds_Final2.pdf
Team, T. (2015, October 8). Why is it Important for McDonald’s to Focus on Quality? Forbes. Retrieved June 13, 2019, from https://www.forbes.com/sites/greatspeculations/2015/10/08/why-is-it-important-for-mcdonalds-to-focus-on-quality/#1da4aebe2488