Indian Institute of Management, Ranchi

Logistics and Supply Chain

Management
Case-01

McDonalds Food Supply Chain

LSCM
Case Presentation

ID

Name

X008/14

Ekansh Bachchan

X029/14

Snehashis Sarkar

Date: Saturday 20th Feb 2016

Post-Graduate Executive Programme

PGEXP (2014-16 Batch)
Term: V (Dec 2015 - Apr

AGENDA

Mc Donalds in India
Mc Donalds Supply Chain
Cold Chain Lifeline of Fast Food Business
Cold Chain Partners
Critical Components
All About Suppliers
Result of Supply Chain Integration
Demand Forecasting
Quality Assurance
Supply Chain Challenges
Conclusion & References

McDonalds In India

Entered India in 1996 through a joint venture with

Hardcastle Restaurants Pvt. Ltd. and Connaught
Plaza Restaurants Pvt. Ltd.
350+ outlets operating in the country
Specially designed vegetarian Menu, no beef
Indian local suppliers provide McDonalds with
highest
quality freshest ingredients

Cold Chain Lifeline of Fast Food

Business

Temperature controlled supply chain

Series of storage and distribution activities which
maintain a given temperature range
Extend and ensure the shelf life of food products
2oc
Locked in precooling room to
remove field heat
after harvesting

1 to 4 o c

-18 to 4 o c

Transportation to
distribution
centers in
refrigerated vans

McDonalds store
products to be
used on daily
basis

Cold Chain Partners Behind the

Big Mac

Source: http://www.rediff.com/business/1999/apr/29mac5.jpg

Coca

Suppliers

Supply Chain Services for McDonalds

Restaurants

Supply Chain Integration

Demand Forecasting

McDonalds uses 31Q Demand Forecasting system:

3 - 3yrs that the fast food chain will keep checking its plans
1 - Represents detailed forecast for next year
Q - Quarterly monitoring for the forecasts

Suppliers are a part of the budgeting process

Restaurants give 3 days to one week forecast to DC
Every restaurant manager knows the exact time of
arrival of each product which enables the supply chain
team to work backwards to ensure timely distribution.

Quality Assurance

Taste of the food products is of top most priority

McDonalds has developed a Sensory Program
A centralized laboratory located at Hong Kong
Each batch of a food product that gets
manufactured at a suppliers plant is checked by a
sensory panel at the plant and scores are allotted.
Only a product with a minimum score is shipped
out of the factory.

Supply Chain Challenges

Multi Temp. Products - Over 65 % temperature controlled
Stores as far as 500 1000kms
Drops per month - Over 1000 - Movement mainly by road
Regular movement of perishables by air
No margin for error Operations critical client
No Stock Outs at store
On time delivery record above 97 %
Clean delivery record above 99 %
Unfailing inbound supply chain

Conclusion

Uniquely handled with least number of

employees on McDonalds payroll
Supplier Development
Has laid down its systems efficiently and
expanding at enormous speed
The model can be replicated in other
sectors as well

REFRENCES

http://www.icmrindia.org/free%20resources/casestudies/
McDonald%20food%20chain-7.htm
http://www.articlesbase.com/marketing-articles/mcdonalds
-india-supply-chain-729402.html
www.expresshospitality.com/20070315/management06.sht
ml
www.mcdonaldsindia.com/aboutus.html
http://sourcing3.com/blog/mcdonalds-india-supply-chain/3/
http://www.mcdonalds.com/us/en/our_story.html
http://logistics.bafree.net/mcdonalds-india-supply-chain
Case study material

Thank
You