The role of Logistics in Mc Donald’s

Logistics plays a great role in an establishment or company so that they can operate more efficiently and maximize the
profit and their products to avoid waste. Transportation/delivery, storage, packaging, cargo handling, distribution
processing, and information processing are all functions of logistics, and various methods have been put in place to get
things from the factory or production location to the consumer quickly and on schedule.

McDonald’s is a popular corporation or company famous for the supply or providing of fast-food products all over the
world. The business has been very successful and enjoyed serving millions of customers with its products globally. The
success depends on the exceptional logistics organizations that sustain the supply chain. But what makes McDonald’s
logistics good?

Within its logistical systems, McDonald's employs quality management. The logistics system starts with the raw material
producers. This covers food producers, paper product producers, and technology device and software producers for
McDonald's. Materials are ordered from the producers through a common ordering system and delivered directly to
each establishment. Several logistics activities are the responsibility of the provider. The most important are
warehousing, shipping, and delivery. When it comes to bringing goods to restaurants, fresh or in good condition, and
ready to use for serving customers, the company works closely with McDonald's and knows the brand's ideals.

They also employ a "Supplier Optimization" strategy, in which they prefer to select a small number of suppliers with
whom they can build a stable, long-term relationship rather than having a large number. This aids in the development of
a relationship in which trust is a key component. This is also tied to McDonald's attempt to build a "Vested business
model." It's a model that benefits all parties involved like suppliers, the corporation and its employees, and franchisees.
They're looking for an answer to the question, "What's in it for Us?” they collaborate to achieve mutual success. To build
the said system, they have created a set of rules which is the:

 Rule 1: Focus on outcomes, not transactions

 Rule 2: Focus on the what, not the how
 Rule 3: Agree on clearly defined and measurable outcomes
 Rule 4: Pricing model/incentives for cost/service trade-offs
 Rule 5: Govern for insight, not oversight

McDonald's also employs 3PL Strategy, or third-party logistics providers like Martin Brower, who are in charge of
carrying out supply chain management decisions. The corporation represents thousands of restaurants worldwide, with
80 percent of them being franchises. The board of directors decided to support these franchises and ensure that they
are supplied correctly. To accomplish so, they constructed shorter supply chains that are easier to manage and more
trustworthy. This also entails a high level of supply and demand consistency, with the supply precisely meeting the
needs of the clients. To accomplish so, fresh, and frozen products are delivered to each restaurant 2.5 times per week on
average.

McDonald's shipping and warehousing are closely monitored, and the warehouse is equipped with a variety of devices
that help to prevent spoilage. Temperatures are adjusted according to the type of product in the freezer to prevent
spoiling. Fresh products are delivered to the shelves in the company's other stores and warehouse facility. To avoid
coming into direct touch with the goods, the loaders use trays. During the unloading process, some foods must be kept
at the same temperature. Small freezers are used in this situation to help maintain the temperatures consistent.

In conclusion McDonald's is more concerned with results than with transactions. In the register, customers are not
considered sales. They are regarded as critical contributors to the organization's success. Even if the interactions are
short, the corporation appreciates its consumers and relationships. In the same way, the company appreciates its
connections with its suppliers. Suppliers are more than just a means to an end. Logistics is seen as a critical part of
operations.

Reference:

https://thesisleader.com/essays/mcdonalds-logistics/

https://brainmass.com/business/business-management/mcdonald-s-logistics-management-565653

Advantage and disadvantage of logistics function in its supply chain

Advantage

 The logistics system starts with the raw material producers.

 Logistics activities are the responsibility of the provider.
 Bringing goods to restaurants, fresh or in good condition.
 Fresh products are delivered to the shelves in the company's other stores and warehouse facility.
 Materials are ordered from the producers and delivered directly to each establishment.
 Reduce spoilage of raw materials" because of strictly monitoring the temperature of the freezer according to the
product stored in it.
 Easy to manage and trustworthy because they constructed smaller supply chain.

Disadvantage

 Deliveries sometimes takes time and results waiting until the breakfast and lunch times are over.
 The firm may experience loses in their accounts if mistakes happened during the process of supply chain.
 The distribution center can result into extreme losses if proper ways of storing goods are not put into
consideration.
 Errors may occur at the company if the stock management doesn’t given much attention and concentration that
needed.
 The logistics technology will fail if the channels of passing information are not working effectively.