Mcdonalds Supply Chain Strategy

Topics: Supply chain management, Milk, Supply chain Pages: 11 (3433 words) Published: May 8, 2011

Company Introduction.
McDonalds is a fast food chain with restaurants all over the world. McDonalds is world’s leading food service retailer with more than 31,000 restaurants in 119 countries serving more than 50 million customers each day. In India, McDonalds is a joint-venture company managed by two Indians. While Amit Jatia, M.D. Hardcastle Restaurants Pvt.Ltd owns the spearheads McDonalds in west and south India, McDonalds restaurants in north and east India are owned and managed by Vikram Bhakshi’s Connaught Plaza Restaurants Pvt.Ltd.

Celebrating over 12 years of leadership in food service retailing in India, McDonalds now have a network of over 160 restaurants across the country. It serves burgers and other fast foods customized to local taste . Its philosophy has been ‘ one world, one burger’, which meant that the burger must be consistent in terms of cost and quality. To meet such high standards, it was essential to have an excellent supply chain management system.

Big Mac's supply chain success
The seed of McDonald's success was sown in 1990 - six years before it started its actual operations. Sanjeev Bhar traces its supply chain management that played a vital role in its growth. About two decades ago, the QSR wouldn't have meant much to the Indian F&B segment. Today, the acronym has been seamlessly absorbed in the industry lingo. McDonald's, arguably, one of the first brands that left a strong imprint on the Indian QSR history, has much to do with this. And its success is credited to its well-established supply management chain. According to Vikram Bakshi, managing director and joint venture partner of McDonald's India (North & East), the company invested about Rs 400 crore even before its first restaurant commenced operations in October 1996. "We had to ensure that we had the back-end linked up to the farm level for delivery commitment." The company also deployed the latest state-of-the-art food processing technology for having a sound supply chain. The transition towards the latest technology, which has been subsequently noticed in other QSRs as well, changed the Indian fast food scenario to match international standards.

Tracing its success path
McDonald's had been working critically on its supply chain part. Considering, an international brand trying to make inroads into the Indian consciousness, its Indian supplier partners were developed in such a manner that made them stay with the company from the beginning. The success of McDonald's India is a result of its commitment to sourcing almost all its products from within the country. For this purpose, it has developed local Indian businesses, which can supply them the highest quality products required for their Indian operations. As per today's standings, McDonald's India works with as many as 38 Indian suppliers on a long-term basis, besides several others standalone restaurants working with it, for various requirements. In the supply chain management for a QSR, the distribution centres hold special place for bringing food right to the outlet counters. For McDonald's India, the distribution centres came in the following order: Noida and Kalamboli (Mumbai) in 1996, Bangalore in 2004, and the latest one in Kolkata (2007). McDonald's entered its first distribution partnership agreement with Radha Krishna Foodland, a part of the Radha Krishna Group engaged in food-related service businesses. The association goes back to July 1993, when it studied the nuances of McDonald's operations and requirements for the Indian market. Better facilities and infrastructures were created along with new systems by them to satisfy McDonald's high demands, which finally culminated into an agreement with McDonald's India, for Radha Krishna Foodland to serve as distribution centres for restaurants in Delhi and...

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