Significance of Effective Logistics Management at McDonalds

McDonalds' Corporation, which is the largest fast food service provider across the globe, has been experiencing challenges with its supply chain. These challenges have been characterized by poor performance, which has forced the company's Chief Executive Officer to depart (New, 2015). One of the major factors behind Mcdonalds' recent poor performance is the origins of its products given that competitors in this industry are renowned for having products and raw materials that reflect freshness, trustworthy sourcing, and health. In essence, Mcdonalds is experiencing challenges in its modern supply chain processes that have generated concerns regarding the trustworthiness of its sources of materials. These challenges are worsened by the fact that global operations need global standards that are consistent, especially with regards to supply chain processes.

In light of the transparency and reliability issues facing Mcdonalds' supply chain, the company's needs a suitable logistics management policy and framework to help improve the efficiency of its supply chain. Due to lack of transparent sourcing, the corporation's is experiencing challenges with regards to flow of materials and responsiveness of its supply chain, which in turn increases the costs of inventory. The lack of transparent sourcing in Mcdonalds comes at a time when customers need clear and truthful account of supply and production processes given the increased focus on food safety because of health concerns. This implies that the corporation does not generate smooth flow of information and materials across its value network for customers' benefit and competitive success.

Transparency in Mcdonalds' modern supply chain framework can be addressed through effective logistics management. As previously mentioned, logistics involves information and material flow within an organization (Gunasekaran & Ngai, 2003). Logistics encompasses all aspects of material and information flow in the supply chain process including management of incoming raw materials, production processes, storing finished products, and delivery of products to customers. In essence, logistics management is a component of supply chain management that handles the planning, implementation, and control of information and material flow within an organization. This process is geared towards ensuring efficiency and effectiveness in supply chain processes between the origins of raw materials to the point of consumption in order to meet the requirements of customers (Logistics Degree, 2012).

As a global corporation, Mcdonalds can significantly benefit from logistics management by enhancing production efficiencies and utilizing technological competencies to foster supply chain transparency. This is primarily because the corporation is experiencing delays in providing information and obtaining materials from trustworthy sources. Therefore, the company has been unable to provide inter-linked services and demonstrate flexibility based on the changing customer demands and requirements. As part of effective logistics management, Mcdonalds need to develop a suitable logistics structure, deal with logistic processes and activities, and enhance its information and reporting systems.

The first step towards effective logistics management for Mcdonalds is inventory management, which is crucial towards lessening inventory costs. The need for suitable inventory management emerges from the fact that Mcdonalds deals with different suppliers. The transparency issues relating to its supply chain have been centered on whether the company's suppliers are trustworthy with regards to the provision of healthy food products. Mcdonalds can address these concerns by establishing a logistics structure in which a well-developed system calculates and forecasts the quantities of inventory required in every restaurant chain (Fristedt et al., 2012). The establishment of such a logistics structure will help ensure that raw materials are obtained from trustworthy suppliers at the right quantities and at the right time. Additionally, the establishment of a well-develop system for calculating and determining supply needs will help in lowering the number of inventory checks carried out by the company. This in turn ensures that inventory levels are effectively maintained so that the restaurants can focus on customers, which helps in lessening inventory costs. This system will provide important information regarding raw materials' needs and ensure that inventory levels are efficiently and effectively maintained.

Secondly, Mcdonalds should enhance it vertical integration component of supply chain management. In this case, the corporation should ensure that its logistics management processes and activities are supported by forward and backward integration. According to Yuen & Cheng (2015), forward integration involves the flow of information and materials from the supplier to the manufacturer then to the consumer. On the contrary, backward integration involves the flow of information and managing logistics processes from the customer to the manufacturer then the supplier. To this extent, Mcdonalds needs to capitalize on its existing partnerships with the different suppliers to ensure that they provide information and raw materials at the right time and quantities. Through linking with these upstream partners, the corporation should ensure that they not only provide raw materials but also provide necessary information regarding the materials in order to enhance transparency and trustworthiness of its sourcing. On the other hand, the corporation should provide suitable measures across different platforms including the Internet through which customers can provide their opinions and views regarding the quality of food products. The company should then utilize the information from these customers to enhance food quantity and ensure that suppliers provide raw materials that help in the production and delivery of quality food items to customers.

The other important aspect for Mcdonalds to deal with its modern supply chain problems is investing in consumer research and cross functional planning for its logistic processes and activities (Banker, 2015). Cross functional planning and consumer research are important elements in logistics management because they help ensure sustainable procurement, which in turn enhances the efficiency and effectiveness of supply chain management. This is also vital for lowering inventory costs since the company's obtains the right raw materials that are utilized in production of products that meet customers' requirements and demands. Through consumer research, the company effectively understands customers' requirements and demands and develops its logistics processes and activities in a manner that aligns with these demands. As the company recently acknowledged, the sourcing for its raw materials should be based on information obtained from consumer research, which is in turn utilized for cross-functional planning of supply chain processes (Banker, 2015).