McDonald’shas one of the most effective supply chains in the hospitalityindustry. Its supply chain policies and practices are used asreference models for companies within and outside the hospitalityindustry. The company embraces cost-reducing technologies such as themanugistic system, which enables it to cut down on the supply chaincosts by forecasting demand and replenishing supplies (New,2015).McDonald’s bases its supply chain on the concept of thethree-legged stool (Härtel, 2012). The players in the supply chaininclude suppliers, the company, and franchises.
Atthe heart of the supply-chain is the company’s effectiveimplementation of the cold chain. The cold chain is effective in itsfunctionalities, with the aim of maintaining the integrity andfreshness of their food products (Ballarino,2014).The cold chain ensures the harmonization of the processes fromprocurement, warehousing, transportation and finally retailing(Jones,2014).The cold chain targets to maintain the consistency of McDonald’sfood quality, by avoiding any compromises brought about by themismanagement of the supply chain. In this regard, it utilizes thejust-in-time supply chain management system to ensure that all theproducts arrive at their best quality (Jones,2014).
McDonald’sdrafts specific guidelines regarding the color, texture, cuttingstyles and freshness of the supplies. However, the company’sresponsiveness to the needs of suppliers allows the management to beliberal with its supply chain policies (Wieland,2013).Every participant in the supply chain is responsible for meeting therequired standards. Consequently, McDonald’s avoids the costlymicromanagement of suppliers (Jones, 2015). The company recognizesthe need to facilitate the smooth operation of its suppliers. Itassists farmers in the selection of quality seeds as well as theestablishment of efficient irrigation systems. The major objective ofsuch engagements is to ensure consistent standards of the quality ofproducts delivered for consumption (Ballarino,2014).Moreover, the cold chain provides refrigerated transportation ofproduce from farms.
Tofacilitate a smooth transportation of produce from farms toMcDonald’s outlets, suppliers make use of traceability programs,which enable them to track their supplies throughout the supply chain(Lee et al., 2012). The backbone of the supply chain is built ontrust and transparency between the company and its suppliers. Thesupply chain is designed to be adaptive, collaborative and efficient.It is framed as a shared system rather than a system owned by thecompany. This allows the supplier to plan as well as adapt to thepresent needs in an integrated and cohesive way (New,2015).The company utilizes direct suppliers who are responsible for thecoordination of purchase and distribution activities
Rawmaterial production, distribution, and processing are criticalelements in the company’s sustainable sourcing goals. All theserequire collaboration with suppliers to ensure the achievement ofsustainability goals. McDonald’s partners with nongovernmentorganizations to ensure the achievement of sustainable goals apartfrom the guidance provided by the Supplier Workplace Accountabilityprogram (New,2015).McDonald’s includes sustainability in its supply chain through theactivities of the suppliers. The company’s suppliers lead the wayin innovations in the areas of environment, ethics, and economics(Hofman,2011).
McDonald’scheeseburgers go through a similar supply chain like all other itemsin the menu. The preparation of cheeseburgers depends on theefficacy of McDonald’s suppliers such as Martin-Browner indelivering the supplies in good time (Wieland,2013).The delivery times for cheeseburger supplies are coordinated toensure the availability of cheeseburgers at all time. Moreover, thedelivery times do not interrupt breakfast or lunch schedules in therestaurants. For one to have a cheeseburger, the company will have tocoordinate the delivery of onions, lettuce, tomatoes, pickles andcheese to be able to serve a customer.
Inthe US, Lopez Foods supply the company with high quality andinspected beef. Keystone Foods supply chicken and other ingredientsused in preparing the McNuggets. McDonald`s contracts individualfarmers such as Dirk Giannini to supply most of the green suppliessuch as lettuce and apples (McDonalds`s,2016).It has several contracted fish suppliers such as Kenny Longaker whosource for the best fish at sea. The company mainly gets its coffeefrom GaviñaGourmet Coffee. ARYZTA, on the other hand, supplies the company withfresh buns throughout its locations. In other locations, it gets thebuns from Fresh Start Bakeries (McDonalds`s,2016).
McDonald’ssupply chain would differ significantly in the case of a developingcountry. First, the company would have to micromanage the suppliersto ensure that the delivered products are of the highest quality.Developing countries lack proper technology in agriculture and adoptpoor practices, therefore requiring the company to participate in theprocess (Leeet al., 2012).Secondly, developing countries lack efficient transportinfrastructure. Therefore, the company would need to determine thescheduling to ensure delivery is made in time. Finally, the companywould have to improvise its cold chain because of a lack of properstorage and refrigeration technology in the developing countries. Ifthe company cannot invest resources in the storage warehouses, thenit would have to obtain products directly from the farmers to thebuyers.
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McDonald`s.(n.d.). Our Supply Chain. Retrieved December 9, 2016, fromhttp://corporate.mcdonalds.com/mcd/sustainability/sourcing/priority-products.html
McDonalds`s.(n.d.). McDonald`s Food Suppliers & Food Sources | McDonald`s.Retrieved December 9, 2016, fromhttps://www.mcdonalds.com/us/en-us/about-our-food/meet-our-suppliers.html
New,S. (2015). McDonald`s and the Challenges of a Modern Supply Chain.Retrieved December 9, 2016, fromhttps://hbr.org/2015/02/mcdonalds-and-the-challenges-of-a-modern-supply-chain
Wieland,A. (2013). Selecting the right supply chain based on risks. Journalof Manufacturing Technology Management, 24(5),652-668.