Mc DONALD’S
SUPPLY CHAIN
1
AGENDA
• Introduction
• History of Mc Donald’s
• Mc Donald’s in India
• Mc Donald’s Supply chain
▫ Supply Chain Challenges...
INTRODUCTION
• Leading global food service retailer
• 32, 000 local restaurants, 60 million people,
more than 100 countrie...
HISTORY
• 1940 – Began as a restaurant opened by siblings
Dick and Mac McDonald in California
• 1948 – Introduction of “Sp...
McDonald’s IN INDIA
• Entered India in 1996 through a joint venture
with Hardcastle Restaurants Pvt. Ltd. and
Connaught Pl...
McDonald’s– FOUR PILLARS OF SUCCESS
Limited Menu
Fresh Food
Fast Service
Affordable Price
6
Mc Donald’s SUPPLY CHAIN IN INDIA
• Source all its requirements from within India
• Developed local business
• Works with ...
• Full Supply Chain responsibility
• Multi Temp. Products - Over 65 % temperature
controlled
• Stores as far as 500 – 1000...
Mc Donald’s SUPPLY CHAIN CHALLENGES
(cont.)
• No Stock Outs at store
• On time delivery record – above 97 %
• Clean delive...
SUPPLY CHAIN STRATEGY
10
SUPPLY CHAIN SERVICES FOR McDONALD‘S
RESTAURANTS
COLD CHAIN – LIFELINE OF FAST FOOD BUSINESS
• Temperature controlled supply chain
• Series of storage and distribution act...
VALIDATION OF COLD CHAIN
Component
Qualification
• Qualification
check on
packaging
components
Operational
Qualification
•...
COLD CHAIN PARTNERS
BEHIND THE Big Mac
14
Source: http://www.rediff.com/business/1999/apr/29mac5.jpg
COLD CHAIN PARTNERS
1. Dynamic Dairy Industries - Supplier of Cheese
▫ Baramati, Maharashtra
▫ Immense benefit to farmers ...
COLD CHAIN PARTNERS (Cont.)
2. Trikaya Agriculture-Supplier of Iceberg Lettuce
▫ Talegaon, Maharashtra
▫ Grow lettuce all ...
COLD CHAIN PARTNERS (Cont.)
3. Vista Processed Foods Pvt. Ltd. -Supplier of Chicken and
Vegetable range of products includ...
COLD CHAIN PARTNERS (Cont.)
4. Radhakrishna Foodland -Distribution centers for Delhi
and Mumbai
▫ Thane, Maharashtra
▫ Han...
COLD CHAIN PARTNERS (Cont.)
5. Amrit Food- Supplier of long life UHT Milk and Milk
Products for Frozen Desserts
▫ Ghaziaba...
LOGISTICS
• Handled by AFL Logistics Ltd.
• ~100 sales items in the restaurant
• ~400 SKUs in the warehouse (Hubs: up to 1...
SUPPLY CHAIN INTEGRATION
21
 Significant business benefits to both the customer and the
supply chain
 Enablers
 One stop shopping concept - Central...
REFRENCES
• http://www.icmrindia.org/free%20resources/casestudie
s/McDonald%20food%20chain-7.htm
• http://www.articlesbase...
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Mcdonald’s supply chain_in_india

  1. 1. Mc DONALD’S SUPPLY CHAIN 1
  2. 2. AGENDA • Introduction • History of Mc Donald’s • Mc Donald’s in India • Mc Donald’s Supply chain ▫ Supply Chain Challenges ▫ Supply Chain Strategy ▫ Cold Chain ▫ Validation of cold chain ▫ Cold chain partners ▫ Logistics ▫ Result of Supply chain Integration 2
  3. 3. INTRODUCTION • Leading global food service retailer • 32, 000 local restaurants, 60 million people, more than 100 countries • Hamburgers, Chicken sandwich, French fries, soft drinks, breakfast items and desserts • Local deviation from the standard menu • Abide by regional taboos 3
  4. 4. HISTORY • 1940 – Began as a restaurant opened by siblings Dick and Mac McDonald in California • 1948 – Introduction of “Speedy Service System” • 1955 - Opening of a franchised restaurant by Ray Kroc • Post 1955 – Kroc purchased Mc brothers equity in the company and led to world wide expansion 4
  5. 5. McDonald’s IN INDIA • Entered India in 1996 through a joint venture with Hardcastle Restaurants Pvt. Ltd. and Connaught Plaza Restaurants Pvt. Ltd. • 160 restaurants in India • Special menu with vegetarian selection, no beef • Products using Indian spices - McVeggieburger, McAloo Tikki burger • Indian local suppliers provide McD with highest quality freshest ingredients 5
  6. 6. McDonald’s– FOUR PILLARS OF SUCCESS Limited Menu Fresh Food Fast Service Affordable Price 6
  7. 7. Mc Donald’s SUPPLY CHAIN IN INDIA • Source all its requirements from within India • Developed local business • Works with 38 different local suppliers • Trained local farmers to produce according to their specification • Worked with vendor to get the perfect cold chain in place • Distribution centers – Noida, Kalamboli, Bangalore, Kolkata • Cold chain – Unique concept of McD supply chain in India 7
  8. 8. • Full Supply Chain responsibility • Multi Temp. Products - Over 65 % temperature controlled • Stores as far as 500 – 1000 kms • Drops per month - Over 1000 - Movement mainly by road • Regular movement of perishables by air • No margin for error – Operations critical client 8 Mc Donald’s SUPPLY CHAIN CHALLENGES
  9. 9. Mc Donald’s SUPPLY CHAIN CHALLENGES (cont.) • No Stock Outs at store • On time delivery record – above 97 % • Clean delivery record – above 99 % • Unfailing inbound supply chain • Bull whip effect • Cannibalization 9
  10. 10. SUPPLY CHAIN STRATEGY 10
  11. 11. SUPPLY CHAIN SERVICES FOR McDONALD‘S RESTAURANTS
  12. 12. 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 Locked in pre- cooling room to remove field heat after harvesting Transportation to distribution centers in refrigerated vans McDonald’s store products to be used on daily basis 2o c 1 to 4 o c -18 to 4 o c 12
  13. 13. VALIDATION OF COLD CHAIN Component Qualification • Qualification check on packaging components Operational Qualification • To demonstrate that the process performs at the operational extremes Performance Qualification • To demonstrate that what happens in the real world is within the limits of what was demonstrated in the Operational Qualification limits 13
  14. 14. COLD CHAIN PARTNERS BEHIND THE Big Mac 14 Source: http://www.rediff.com/business/1999/apr/29mac5.jpg
  15. 15. COLD CHAIN PARTNERS 1. Dynamic Dairy Industries - Supplier of Cheese ▫ Baramati, Maharashtra ▫ Immense benefit to farmers by setting up a network of milk collection centres equipped with bulk coolers ▫ From farm two degrees Celsius in 90 minutes ▫ Fully automatic international standard processing facility ▫ Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanized baby food ▫ Stringent quality control measures and continuous Research & Development 15
  16. 16. COLD CHAIN PARTNERS (Cont.) 2. Trikaya Agriculture-Supplier of Iceberg Lettuce ▫ Talegaon, Maharashtra ▫ Grow lettuce all year round with the help of experts from Mc Donalds ▫ A specialized nursery with a team of agricultural experts ▫ Vegetables are moved into the pre-cooling room within half an hour of harvesting. ▫ The pre-cooling room ensures rapid vacuum cooling to 2º C within 90 minutes. ▫ The pack house, post-cooling and cold room are located at the farms itself, ensuring no delay between harvesting, pre- cooling, packaging and cold storage ▫ Refrigerated truck for transportation. 16
  17. 17. COLD CHAIN PARTNERS (Cont.) 3. Vista Processed Foods Pvt. Ltd. -Supplier of Chicken and Vegetable range of products including Fruit Pies ▫ Taloja, Maharashtra. ▫ Produces a range of frozen chicken and vegetable foods ▫ The technology includes hi-tech refrigeration plants for manufacture of frozen food at temperatures as low as - 35° c. ▫ Cultural sensitivity: Vegetable & chicken manufactured at different processing lines separated by a shower (washing) area. Utmost care to ensure no mixing up. ▫ R&D facility for innovation in taste, nutritional value and convenience 17
  18. 18. COLD CHAIN PARTNERS (Cont.) 4. Radhakrishna Foodland -Distribution centers for Delhi and Mumbai ▫ Thane, Maharashtra ▫ Handles large volumes ▫ Services include procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting ▫ Dry and cold storage facility to store and transport perishable products at temperatures upto -22 Degree Cel. ▫ Effective process control for minimum distribution cost ▫ Variety of items coming from across India, stored in rooms with different temperature zones and are finally dispatched to the McDonald's restaurants on the basis of their requirements ▫ Very vital role in maintaining the integrity of the products 18
  19. 19. COLD CHAIN PARTNERS (Cont.) 5. Amrit Food- Supplier of long life UHT Milk and Milk Products for Frozen Desserts ▫ Ghaziabad, Uttar Pradesh ▫ ISO 9000 company ▫ Manufacture widely popular brands – Gagan Milk and Nandan Ghee ▫ State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene. ▫ Installed capacity of 6000 ltrs/hr for producing homogenized UHT (Ultra High Temperature) processed milk and milk products. ▫ Strict quality control supported by a fully equipped quality control laboratory. 19
  20. 20. LOGISTICS • Handled by AFL Logistics Ltd. • ~100 sales items in the restaurant • ~400 SKUs in the warehouse (Hubs: up to 1,500) • ~200 restaurants per DC (~180 DCs globally) • Delivery frequency: ~3/wk, higher in urban areas • 2-3 stops per route • Exclusive distributors (3PL) • Freight consolidation (via freight forwarders) • Long term partnerships with service providers, risk sharing • Strong quality focus (Cold Chain, HACCP, QIP) 20
  21. 21. SUPPLY CHAIN INTEGRATION 21
  22. 22.  Significant business benefits to both the customer and the supply chain  Enablers  One stop shopping concept - Central file management  Inventory management - Restaurant simplification  Synchronizing the perishable Supply Chain  Demand forecasting  Promotional + Continuous Supply  Supplier and DC level  Supply Planning  Restaurant and DC level  Visibility and Collaboration across the chain RESULT OF SUPPLY CHAIN INTEGRATION
  23. 23. REFRENCES • http://www.icmrindia.org/free%20resources/casestudie s/McDonald%20food%20chain-7.htm • http://www.articlesbase.com/marketing- articles/mcdonalds-india-supply-chain-729402.html • www.expresshospitality.com/20070315/management06 .shtml • www.mcdonaldsindia.com • www.nrf.com/Attachments.asp?id=9504 23
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