This paper analyzes quality management and operations improvement at McDonald's Corporation, the world's leading fast-food chain. It explores the company's QSCV (Quality, Service, Cleanliness, Value) philosophy, its Total Quality Management system, and the roles of quality control and quality assurance departments. The paper evaluates McDonald's conformance levels against its own quality standards, noting a decline in global comparable sales as evidence of quality gaps. It then examines strategic implications of improving operations, comparing proactive, incremental, and breakthrough improvement approaches, and considers how each method would affect the organization's workforce, costs, and overall performance.
McDonald's Corporation is the leading fast-food restaurant chain across the globe. Since its founding, the company has experienced tremendous growth and profitability through the adoption of sound business philosophies and practices. McDonald's has become a symbol of globalization given its successful expansion into various parts of the world. Another key factor contributing to McDonald's worldwide success is its effective operations function. The company has streamlined its operations from sourcing raw materials through production to the distribution of food products to customers. McDonald's Corporation has established a relatively effective operations management framework that helps manage all its functional areas. This paper examines quality and the improvement of operations at McDonald's Corporation within that framework.
McDonald's Corporation operates in an increasingly competitive fast-food industry worldwide. Despite its market share and position, the company still faces stiff competition from rivals. Throughout its operations, McDonald's focuses on excellent customer service, response to competition, and the use of suitable techniques to enhance growth and development (Keller, 2017). As part of providing excellent customer service and ensuring customer satisfaction, McDonald's emphasizes quality as a central component of its operations management framework. The company's operations management framework is built on the premise of ensuring quality across all functional areas.
McDonald's operations management is centered on an emphasis on quality. To this end, the company has a clear quality statement that is incorporated into all of its activities, and it utilizes an effective quality system that enhances the efficiency and effectiveness of its functional areas. According to Ka-Sing (2019), McDonald's philosophy on quality is to provide high-quality food and excellent customer service to all customers in a clean and welcoming environment at great value. This philosophy is based on the principle of QSCV — Quality, Service, Cleanliness, and Value — which also serves as the company's customer service philosophy. Under the quality dimension, the company focuses on accurate selection of raw materials for its food items. Under service, McDonald's promotes quick, attentive, and friendly interactions aimed at 100% customer satisfaction. The company also seeks to operate in clean stores and uses customers' needs and demands as the foundation for product development initiatives.
McDonald's ensures that this philosophy is incorporated into its business activities by embedding it within customer service standards. The philosophy is the core of all customer service efforts and daily business operations. In this regard, the company has established systems for receiving customer requests in a timely manner and fulfilling them in a fast, attentive, and friendly way (Hu & Xie, 2013). The philosophy also underpins the company's supply chain strategy and value proposition. McDonald's Corporation formulates all annual strategic plans based on this quality and customer service philosophy (Ka-Sing, 2019), ensuring that all activities reflect the emphasis on quality.
To operationalize this philosophy across the entire organization, McDonald's utilizes a Total Quality Management (TQM) system. Under TQM, all McDonald's restaurants are empowered and given responsibility for ensuring quality in their operations. Employees are given ownership of quality outcomes at the local level. Additionally, the company uses TQM to carry out continuous product improvement and quality customer service by combining an understanding of customers' needs and wants.
The management of quality at McDonald's is the responsibility of the quality control and quality assurance departments, which include individuals drawn from cross-functional areas — particularly product and service development. These departments are mandated with conducting proper quality control and assurance assessments, and the insights derived from these assessments are used to shape product development initiatives toward the production of high-quality products. To fulfill this responsibility efficiently and effectively, both departments utilize the Quality Inspection Program (QIP), through which they ensure that all products are in perfect condition. Key metrics used in the quality inspection and control process include the nutritional value and freshness of raw materials and food items.
According to Nanyang Consultancy (2016), quality control at McDonald's is based on two major components: supplier quality control and public perception of quality standards. Through these components, the company adopts stricter global quality control standards within the fast-food industry. To ensure quality is maintained across all activities, the quality control and assurance departments use QIP to monitor suppliers through geography-based markets. With respect to public perception, the company conducts customer and public surveys on quality standards. For instance, McDonald's regularly runs social media–led campaigns to gauge public perception of its quality.
There are three major performance measures McDonald's uses as part of quality management. The first is quality control, which examines the percentage of suppliers and firms complying with global fast-food industry standards. The second is refocus of core customer value proposition (CVP), which involves conducting customer satisfaction surveys and gathering data regarding service teams. The third is McHEARTS, which involves conducting customer and franchise satisfaction surveys and examining sales contributions relative to desired profitability goals (Nanyang Consultancy, 2016).
McDonald's has recently witnessed a slump in its global comparable sales, which has become a recurring feature of its results (Team, 2015). The company continues to experience declining comparable sales at a time when the industry is characterized by intense competition. McDonald's has seemingly lost some of its reputation and experienced a decrease in its customer base. This relatively poor performance in global comparable sales is an indicator of poor conformance to the company's own quality standards. The company is performing below its own quality benchmarks, which has significantly affected its market performance. Poor conformance is also evident in the firm's slow response to food safety concerns — unlike competitors that have increased their quality focus, McDonald's has been relatively slow to respond and has, in effect, compromised its quality standards.
Given the poor reputation and declining comparable sales, McDonald's has undertaken corrective actions to address these issues. These actions have involved a renewed emphasis on quality improvement across all company activities, particularly those directly related to food production. This renewed focus has taken the form of a turnaround plan that not only aims to improve sales but also incorporates quality improvement as a central objective. The company has refocused on the quality and safety of all its products as a means of meeting its own standards and enhancing profitability (Team, 2015). The turnaround plan seeks to correct poor performance against quality measures by providing critical business strategies and processes to improve quality across all operations.
Operations and operations management are critical to the success and profitability of any business organization. In light of the intense competition characterizing the modern business environment across sectors, businesses face a continuing need to improve their operations. Hill & Hill (2011) state that operations need to be improved in order to achieve several corporate objectives, such as reducing costs, improving market support, enhancing profitability, and releasing cash. Various techniques — including incremental improvements and breakthrough improvements — are available to companies depending on the corporate objectives they seek to achieve.
Given the current situation facing McDonald's, the company could benefit from adopting a proactive approach to improving operations. Hill & Hill (2011) state that a proactive approach entails developing an improvement culture throughout the organization. The current poor global comparable sales that have characterized McDonald's are indicators of a relatively ineffective organizational culture — one that has contributed to compromised quality standards and slow responses to food safety concerns.
A proactive approach could help address this issue by establishing an improvement culture across all operations. This is particularly important because the current situation requires an approach that drives improvement organization-wide. It would benefit McDonald's by creating concerted efforts toward enhancing product quality and customer service. Under this approach, all internal stakeholders — from managers to frontline employees — would look for ways to make improvements, making it easier to achieve buy-in for improvement processes since everyone, including in decision-making, is involved.
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