Logistics and Operation Management
In our group of three, our assignment requires us to choose a retailer for whom we can purchase a product. This report will also highlight the following areas: 1. Describing the supply chain 2. The importance of CSF from the consumers and retailers’ point of view and how they are addressed. 3. An appendix explaining how the work was shared. After much discussion, the retailer our group decided to choose was McDonalds. Since the first restaurant opening of McDonalds in October 1974, the famous golden arches have become a popular symbol with consumers all over the world.
These days McDonalds can be found on High Streets, alongside major roads and in leisure and retail parks. McDonald’s mission statement is: ‘To be the UK’s best quick service restaurant experience’ (McDonald’s fact file 2002, The Corporate Affairs Dept, April 2002) At present there are approximately 1,184 McDonald’s restaurants operating in the UK alone, which roughly represents an investment of over i?? 1. 7 billion. When it comes to the franchise aspect of the business there are over 25,000 employees and just fewer than 48,000, otherwise, working for the company.
This indicates that McDonalds is the largest and the best-known global fast food server. Supply Chain Management ” Supply chain management is the management of the interconnection of organization which relate to each other through upstream and downstream linkages between the different processes that produce value in the form of products and services to the ultimate consumer ” (Slack et al, 2001) Figure 1. Supply chain management is concerned with the flow of materials and information between the operations, which form the strands ‘chains’ of a supply network.
(Slack et al, 2001) Supply network can refer to the operation from providing goods and services right to the end customers. There are many industries that are becoming aware and are focusing on smaller set of targets in order to become more efficient and to provide good quality within their field of work. Instead of purchasing their materials from the specialist supplier, they need to purchase products and services outside their specialists in order to get a feel of other suppliers they have not previously used.
McDonalds vision of ‘being the best’ is also shared with a limited number of its supplier partners, with whom McDonalds have a committed long-term relationship. Suppliers can become carefree when investing with McDonalds, because as McDonalds grow profitability, they will treat the suppliers as partners of the business. McDonalds ensures its suppliers follow the exact standards of quality, value and cleanliness set by them. When it comes to tracing the products ingredients, great emphasis is placed, so McDonalds are able to control every link in the supply chain.
Wherever possible, McDonalds tries to use suppliers who are based in the UK, as they prefer them, but saying this, they still have to meet McDonald’s exact product and hygiene standards and are competitive. McDonalds keeps a close eye on its suppliers, making sure they follow their environmental policies; also they only buy from those suppliers who operate in accordance with the government and EU regulations and guidelines.
The suppliers, with whom McDonalds has a long-term relationship with, ensures the invoices are settled promptly, as this assists suppliers’ cash flow. They also communicate changes and development opportunities to suppliers in areas that might affect their work with the company. McDonalds believes food quality begins in the very first link of the supply chain. Whether this being in the dairy herds, lettuce seedlings or the flour that is used in the buns.
McDonalds food quality and safety commitment stretches back from its restaurants to every link possible in the supply chain. McDonalds employ a high trained professional team of quality assurors, whose job is to verify the company’s supply chain through audits and site visits. They also work alongside suppliers to maintain and develop product quality and to ensure that restaurants constantly serve hot food. They also assist key supplier partners such as the independent food safety auditors.