Logistics and supply chain management of McDonald's India (SCM)

1. MC DONALD’S

2. TIMELINE
 1937 : McDonald's was started as a drive-in restaurant by two brothers, Richard
and Maurice McDonald in California, US .
 1948 : The first McDonald’s restaurant is opened in San Bernardino.
 1955 : Ray Kroc, expressed interest in the business, and he finalized a deal for
franchising with the McDonald brothers in 1954 in Des Plaines, Illinois, US.
 1959 : Kroc opens 67 new restaurants, bringing the total to 100 franchises.
They begin advertising on billboards.
 1961 : In 1961, he bought out the McDonald brothers' share for $2.7 million and
changed the name of the company to McDonald's Corporation
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3. TIMELINE
 1962 : The Speedee logo was replaced by the Golden Arches as the company
logo.
 1963 : The 500th McDonald’s was inaugurated & Ronald McDonald is introduced.
 1965 : Stock goes of the 10th anniversary of the company
 1972 : McDonald’s became a $1 billion corporation. Surpassed the US Army as
the nation’s biggest dispenser of meals.
 1979 : Happy Meals are added to the menu.
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4. TIMELINE
 1990 : The world’s biggest McDonald’s, with seating for 700, is opened in Moscow.
 1996 : First restaurant opens in India, at Basant Lok, Vasant Vihar, New Delhi.
 McDonald's India is a 50–50 JV partnership between McDonald’s Corporation (U.S.A)
and 2 Indian businessmen :-
 Amit Jatia (Hardcastle Restaurants Private Limited, Mumbai) :- West & South
India
 Vikram Bakshi (Connaught Plaza Restaurants Private Limited, Delhi) :- North & East
India
 2003 : Post their first quarterly loss in over 40 years. New store openings are
reduced from 1,000 the previous year to 360.
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5. FACT - FILE
 McDonald's serves 1% of the world's population every day.
 It currently Employs more than 20,00,000 employees.
 McDonald's sells more than 75 burgers every second.
 McDonald's' iconic golden arches are recognized by more people than the
cross.
 McDonald's is the world's largest distributor of toys, with one included in 20%
of all sales.
 Ronald McDonald is the 2nd most recognized public figure after Santa Claus.

6. MCDONALD’S VISION & MISSION
Vision
• To be the best & leading fast food providers
around the globe
Mission
• To be the world's best quick service restaurant
experience. Being the best means providing
outstanding quality, service, cleanliness, and
value, so that we make every customer in every
restaurant smile."

7. MCDONALD’S VALUES
 We place the customer experience at the core of all we do.
 We are committed to our people – Employee development.
 We operate our business ethically.
 We give back to our communities – Charities.
 We strive continually to improve.

8. PRESENT SCENARIO
 McDonald's is the world's leading food service retailer.
 It has more than 33,000 restaurants across the globe.
 It serves more than 67 million customers each day.
 It has its presence in 118 countries.

10. MCDONALD’S INDIA : OUTLET NETWORK
 15 years of leadership in food
service retailing in India
 McDonald's India has a
network of over 250
restaurants across the country.
 McDonald's India is a leader in
the food retail space, serving
more than 6.5 lakh customers
daily in India.

12. QSCV MODEL
1. Quality :- McDonald's strives to maintain its international quality
standards. Strong supply chain efficiencies promises to deliver freshness
right to the customer's plates.
2. Service :- McDonald's motto is to “serve with a smile”. It launched its
new “one minute service delivery” to the customer even during rush
hours.
3. Cleanliness :- Sticking to a very strict code of decorum and cleanliness,
McDonald's ensures that hygiene plays a large role in the way the food
is served.
4. Value :- Value for money has always been McDonald’s greatest pride.
McDonald's menu gives the tastiest and most affordable food options to
customers with range of products starting at just Rs.25

13. LOGISTICS & SUPPLY CHAIN MANAGEMENT
 Mc Donalds infused around Rs. 400 crores in the supply and delivery chain
before setting up their first restaurant in India.
 Mc Donalds have around 38 suppliers which are on long term basis
categorized as follows :-
 Tier-I and Tier-2 suppliers :-
 In Tier-I there are 14 core suppliers-provide processed products , French fries,
potato wedges
 In Tier-2 suppliers there are growers and processors who provide lettuce poultry
items vegetable patties
 The flow of ingredients are from Tier-2 to Tier-I suppliers who process them.

14. LOGISTICS & SUPPLY CHAIN MANAGEMENT
 4 Distribution Centers (DC) owned by the company :-
 Delhi Mumbai Bengaluru & Kolkata
 Employees strength of McDonalds India is 9,000 people in total
across the country.

15. INBOUND LOGISTICS
 It is the movement of materials from suppliers and vendors into
production processes and storage facilities.
 Based on the demand forecast, Manager orders the distributors on daily
basis.
 Distributors store all the raw materials, in its own cold stores and
delivers material to the restaurant.
 DC also received the DQMP (Distribution, Quality, and Management
Process) Certification from USA Audit Team.

16. INBOUND LOGISTICS
 There are only two products buns and
Cokes, which are sent directly to the
restaurants.
 DCs have full-fledged facilities to pack
locally manufactured products in sachets
such as sugar & tomato ketchup.

17. SUPPLIERS
 A standard McDonald’s burger has
9 different ingredients, which are
sourced, from 38 suppliers across
the country before it reaches the
final consumer.
BEVERAGE SUPPLIERS
Coca Cola is McDonald’s
official beverage partner.

18. SUPPLIERS OF MCDONALDS INDIA

20. E-PROCUREMENT
 McDonalds E-Procurement System is the main reason for their successful
supply chain management.
 E-MAC Digital : (Internet procurement site designed for McDonald's
Corporation's 34,000 franchises)
 E-MAC Digital Company is E-Procurement website which is jointly owned
by McDonalds and Accel-KKR Internet Co.
 It is so efficient that it provides the backbone not only to all the logistics
but the whole McDonalds supply chain management.
 It is a procurement hub launched in 2001 that allows all of McDonald's
franchises to buy everything needed as per the demand.

21. E-PROCUREMENT PROCESS
 A McDonald’s franchise restaurant places an
order through E-MAC digital website.
 The order is sent to the suppliers. Suppliers
order is processed and managed by the
logistics department.
 The logistics department sends the order of
the products to the franchise restaurants. It
is the responsibility of the E-MAC and
logistics that the products are sent to the
restaurant.
 All the above, steps are handled and
executed by the E-MAC digital.

22. TRANSPORTATION : COLD CHAIN LOGISTICS
 McDonald’s was the first to pioneer the establishment of Cold Chain
across India which helps maintain freshness and nutrition in product
 A cold chain is a temperature-controlled supply chain.
 McDonalds’ entire network supply-chain consists of movement of
goods through a cold chain
 The transportation of McDonald’s has been completely outsourced.
 Multi-temperature and single temperature trucks transport the fast food
swiftly to the McDonald’s restaurants.

23. COLD CHAIN LOGISTICS
 The company has both cold and dry storage
facilities with capability to store products up to -
25º C
 An interesting and innovative feature of this cold
chain is that the same truck can carry products at
different temperature ranging from:
 Frozen products at -18ºC to -25ºC
 Chilled products from 1ºC - 4ºC
 Dry products at Room temperatures

24. Process Optimization

25. OUTBOUND LOGISTICS
 Outbound logistics is the process related to the storage and movement of
products from the end of the production line to the users end.
 McDonalds Distribution systems McDonald uses three types of distribution
strategy :
 Franchising
 Licensing
 Joint ventures
 When customers enter the restaurant, they go to the counter, give their
order, which they are served within a single minute.

27. GLOBAL PACKAGING DESIGN SYSTEM
 McDonald's has a global package design for
their to-go bags and fountain drink cups.
 McDonald’s also offer access to Nutrition
facts with QR code Packaging.

28. ORDER PROCESSING SYSTEM
 Cash & cashless payments
 Online Orders :-
 Online menu
 Delivery fees
 Redeeming discounts
 Cancellations
 McDonald’s Delivery

29. ORDER PROCESSING SYSTEM

30.  TRANSACTION PROCESSING SYSTEM (TPS)
 “POINT OF SALE” SYSTEM
 DECISION SUPPORT SYSTEM (DSS)
 “MADE FOR YOU” SYSTEM
MCDONALDS INFORMATION SYSTEMS (mis)

31. MIS

32. MCDONALD'S COMPETITORS
o Subway
o Kentucky Fried Chicken (KFC)
o Mr. Burger
o Burger King

33. EXPANSION THROUGH DIVERSIFICATION
 3 types of Expansion strategies
:-
 Franchising
 Licensing
 Joint ventures
 4 TYPES OF RESTAURANTS :-
 Mc Drive
 Special theme restaurants
 Mc Café
 Mc Express

34. MCDONALD’S MARKET SHARE
30%
25%
15%
10%
5%
15%
Market Share
McDonalds KFC Subway
Mr. Burger Burger King Others
 McDonalds has surpassed its
competitors by Indianinzing
more than 85% of its menu.
 Thinks Global, Acts Regional

35. RECOMMENDATIONS
 McDonald’s business depends entirely upon the timely delivery of fresh and
quality products. The entire model being outsourced they lack control over the
process.
 We suggest that some control points need to be setup in the supply chain model
to monitor the smooth functioning of the entire process.
 Hygiene facilities in the Kitchen should be improved
 Number of employees involved in the supply chain process need to be increased
so that they can properly handle any contingency arising in the SCM model.

36. THANK-YOU
 SHRUTI
 JHEENAL
 SHAILEE
 PRIYANKA
 PRACHI
 RAVI