Operations Management and Planning at McDonald's

Introduction and Background

"To provide unmatched consistency in operations in support of high product quality. This must be accomplished with adequate speed, low cost, and process innovation to accommodate changes in consumer tastes."

— Operations Strategy of McDonald's

Operations management is a critical aspect of business that helps govern and determine the success and general efficacy of the business itself. Operations management encompasses numerous aspects of business functions and can be divided into several elements such as marketing and sales, corporate strategy, organisational design, and operations and process management. For the purposes of this paper, the organisation of focus is the international chain of fast food restaurants famously known as McDonald's. This is a fast food chain that originates from the United States of America. To date, there are over 33,000 McDonald's restaurants in 118 countries. The paper will provide a succinct description of operations management as it currently applies to McDonald's, with specific focus on the aspect of planning and control.

Jain provides a concise description of operations management as follows:

"Operations management can be defined as the planning, scheduling, and control of the activities that transform inputs into finished goods and services… Operations management concerns making the most efficient use of whatever resources an organisation has so as to provide the finished goods or services that its customers need in a timely and cost-effective manner. Operations management is related with the strategy of the organisation." (Jain, 2010)

Operations Management at McDonald's

Within every organisation, there must be clear identification of the product for the consumer. The inputs must also be clearly defined. The employees transform the inputs and produce finished goods, which in this case are the food items on the McDonald's menu and satisfactory customer service. The ways in which the employees are organised are a part of operations management. The processes by which the inputs are assembled and transformed into completed products for consumption also fall under operations management. There are, in fact, not many business-related practices that are outside the scope of operations management. Thus, effective operations management is vital to the success of a business. McDonald's, as a business operating for over eighty years, must be a product of outstanding operations management to have remained in business for so long while providing service to billions of customers worldwide.

Operations management carries several responsibilities that are key to the business. Finances must be stringently and meticulously accounted for and documented. Operations management covers the economics and accounting departments of the corporation. Through the past several decades, the field of organisational behaviour and psychology has gained recognition as an academic discipline and has seen well-documented successes in applied theories. This domain is also covered within operations management. All aspects of production — from general engineering and industrial engineering to strategy and marketing — are included within operations management.

From how products are made and distributed, to where the company sources the equipment for manufacturing, to the ways markets are cultivated and products are advertised — all of these key processes fall within the realm of operations management. The purchasing of resources and the logistics of everyday functioning are obviously within this realm. Finally, the information management technology that organises, stores, and distributes data from all other aspects of operations management is part of this domain. It is clear that operations management serves as the metaphorical nervous system for any corporation, especially one so vast and influential as McDonald's (Slack et al., 2010). There are at least three generations of McDonald's customers who can recite any number of McDonald's jingles or full commercials from within their lifetimes. Though the effects of a business upon a culture — or indeed a planet — cannot always be predicted, the effect McDonald's has on humanity is certainly by well-crafted design.

The resources at McDonald's consist of produce, grains, and food products. These resources — whether chickens, potatoes, or cheese — are the materials that compose McDonald's products. Within the facilities, the staff, using the equipment available to them, act as the transforming resources. The transforming resources such as the materials, the information (recipes and equipment operation), the customers (their orders), the facilities, and the McDonald's staff together constitute the input. The transformation process is food preparation, storage, and distribution. The outputs are both the items on the menu and the McDonald's customer service experience.

Inputs, Transformation, and Outputs

This is a basic model for the operations of a fast food chain of restaurants such as McDonald's. Variations exist, but for the purposes of this examination, this general model is adopted. The transformation process happens on both a grand scale and a localised scale. The chickens, cows, and fish must be raised, grown, and subsequently processed and made fit for shipping. Within each individual McDonald's restaurant around the world, the chicken is fried and made part of a sandwich. The transformation process happens at the industrial, large-scale level, and must then occur again at the localised level. Direct contact with the customer is vital to McDonald's success and marketing strategy.

"At McDonald's, making customers happy is what our business is all about. And we know it takes a lot to make that happen. We work hard to provide every customer with a choice of meals and an experience that exceeds their expectations."

— McDonald's Strongest Priority (Earley et al., 2004)