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McDonald's supply chain
- 1. McDonald’s: Food SupplyChain ID Name 31NMP06 Amit Agarwal 31NMP37 Niyati Nigam 31NMP48 Subrat Baral 31NMP56 Vinay Thakur
- 2. Some Interesting figures 1.Number of countries McDonald’s has restaurant in: 100 2. Number of customers served daily by McDonald’s: 69 Million 3. No. of restaurant worldwide: 37000+ 4. Amount of fries McDonald’s sells daily: 9 Million pounds 5. Number of BigMc sold annually: 550 million 6. % of McDonald’s restaurant that are franchise: 80%+ Huge Scales of Operations – Same Quality worldwide
- 3. Key Success Strategies 1.Repeatability & scalability : Others can also make burger but success lies in nos. of stores worldwide. Burger is not product, Business format is the product. 2. Q.S.C.V. : Quality, Service, Cleanliness, Value for money 3. Internal marketing plan : Employee First 4. Menu Innovation: Only fast moving items in menu. 5. Local responsiveness, Global Integration: Local Product- global standards 6. Invite in low ticket price – Cross sell: Burger to Meal Conversion Sustainable Supply Chain Ethics Environment Economies Success with Franchisee model worldwide
- 4. Place & Price •Restaurants • Prominent Places / Busiest Places • Kiosks • McDonald’s mobile apps • Postmates website and other app • Cost leader • Super efficient supply chain • Standardization • Offers fast food meals at low prices • Price bundling • Psychological pricing Right Place, Right Price
- 5. The McDonald’s Way •A video worth more than 1000 words Introduction to McDonald’s Supply Chain
- 6. McDonald’s Supply chain •Challenges: Perishable Products, Same Quality & taste across countries, Cost optimization • Supply chain preparation starts 2 yr. ahead of product launch • One ingredient – One Supplier Policy • Supplier development to get quality product at minimum cost • Still imports potatoes from New-Zealand till domestic farmers develops Local production – Global Standards
- 7. Vendor Development • Helpto produce right quality products with competitive cost • Training • Engineering & production help • Establish polices and procedure 6-Major Supplier’s Attributes 1. Assured supply of product 2. Low cost and best value 3. Technical competence 4. System player 5. Shared values 6. Management excellence Supplier Development for overcoming Challenges
- 8. Trikaya Agriculture, Pune McDonaldhas enabled Trikaya to successfully grow specialty crops like iceberg by:- • Providing imported seeds and advise to grow them on raised beds and moving away to non-flood prone areas. • Advise on pesticide usage during different seasons • Specialized nursery with agricultural experts. Trikaya Invested in - • Drip irrigation, raised farm beds, fertilizer mixing plant, good quality pesticides. • Cooling rooms for post harvest handling • Refrigerated trucks for transportation
- 9. Vista Processed Foods- Taloja, Maharashtra A JV between OSI Industries Inc. and McDonald’s India Pvt. Ltd. • Deals with 45Nos. Of tier-2 suppliers to supplies 12 Nos. products (frozen chicken & vegetable foods) • Helped farmers to improve bird weight thus meeting quality & cost • Separate processing lines for chicken and vegetable foods • Capability to produce frozen foods at -35 degrees to retain total freshness • International standards, procedures and support services.
- 10. Dynamix Dairy • Establishednetwork of milk collection centers with bulk coolers • Enable farmers to augment capacity by providing a new market for surplus milk Infrastructure:- • Fully automatic international standard processing facility • Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein and other products • Stringent quality control methods • Continuous Research & Development
- 11. Radhakrishna Foodland (RKFL) Provideshigh range of services including procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting. • McDonalds introduced RKFL to Australia’s FJ Walker to develop the distributions system • Using Multi-temperature Trucks which reduces the number of daily deliveries • A one-stop shop for all distribution management services responsible for procurement , quality inspection , storage , inventory management • Dry and cold storage facility to store and transport perishable products at temperatures up to -22 degrees • Effective process control for minimum distribution cost • RKFL have system for tracking demand and supply
- 12. Process Innovation throughtechnology • Technology to streamline processes and improve efficiency • Touch Order - Allows To Place Order Via Handset Order directly from tables First self-ordering system in the world to use RFID • In-restaurant experience • Next generation of drive-ins
- 13. Fallout with SupplyChain Partners • In 2008, McD had a fallout with Vikram Bakshi over financial irregularities. Waiting for resolution by LCIA • In 2017, 84 McDonald’s in East India were shut down after RKFL discontinued supplies • The legal battle has affected McD’s business in north and east India • Competitors have capitalised
- 14. South and WestIndia – Hardcastle restaurants • McD’s business in south and west India, has expanded • New products for local palette • In December 2018, McDonald’s has finally recorded a profit of 6.52 million in India since its debut • Hardcastle Restaurants will recycle used cooking oil to produce Biodiesel that will fuel its supply delivery trucks
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- 16. References • https://qz.com/india/1058465/want-to-know-why-mcdonalds-may-shut-down-in-half-of-india-ask-its-first-indian-business-partner/ • https://economictimes.indiatimes.com/industry/cons-products/food/why-delhiites-have-to-wander-and-wait-for-mcdonalds-meal- now/articleshow/59360373.cms •https://timesofindia.indiatimes.com/business/india-business/over-half-of-mcds-outlets-close-down-in-north-east- india/articleshow/62246480.cms • https://www.businessinsider.in/battle-of-the-fast-food-brands-how-dominos-is-cashing-in-on-mcdonalds-weak- position/articleshow/63518208.cms • https://www.businessinsider.in/mcdonalds-just-earned-a-profit-in-india-for-the-first-time-since-launching-in-the-country-over-two-decades- ago/articleshow/67266716.cms • https://qz.com/india/1243529/mcdonalds-india-menu-adds-chatpata-naan-to-woo-indian-taste-buds/ • https://www.financialexpress.com/industry/as-many-as-43-mcdonalds-stores-shut-in-delhi-all-you-want-to-know-about-the-controversy/742236/ • https://www.businesstoday.in/current/corporate/mcdonalds-vikram-bakshi-cprl-nclt-169-outlets/story/266961.html • https://www.businessinsider.in/mcdonalds-is-to-fuel-its-delivery-trucks-with-biodiesel-made-from-used-cooking-oil/articleshow/65106990.cms • https://expandedramblings.com/index.php/mcdonalds-statistics/ • https://www.youtube.com/watch?v=pKu1kQVplrg
Editor's Notes
- #2 Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).
- #14 Led by Vikram Bakshi, Connaught Plaza Restaurants Pvt. Ltd (CPRL), a 50:50 joint venture between him and McDonald's India, runs 169 outlets in North and East India. In 2008, a nasty legal battle ensued when McDonald's proposed to buy out Vikram Bakshi’s (MD, Connaught Plaza Restaurants Pvt. Ltd.) stake for an amount lesser than he valued it. In 2013, McDonald’s ousted Bakshi as managing director of CPRL over alleged financial irregularities. Bakshi in-turn filed a complaint with the NCLT claiming that McDonald’s was trying to strong-arm him into selling his share to them at a lower valuation. In 2014, NCLT reinstated Vikram Bakshi as MD of CRPL. The dispute is still waiting for resolution by London Court of International Arbitration (LCIA) In August 2017, McDonald’s terminated its agreement is being examined by the courts. In the middle of all this, with CPRL, though the Indian venture has kept running its 169 outlets while the dispute
- #15 In June 2017, 43 outlets of the fast-food chain were closed in the capital following the expiry of its eating house licences. highly-placed sources disclosed that CPRL failed to get the mandatory regulatory health licences renewed because of the infighting between Bakshi and McDonald’s. The move, they point out, will render over 1,700 employees jobless. The legal battle, has affected day-day operations at the company, hampering growth in north and east India. From 27 in 2012, the number of new-store openings was down to three in 2015. In 2017, McDonald’s India reportedly saw a loss of ₹3.05 billion last year, while the total accumulated loss for the food major since its launching was ₹4.21 billion. In 2013, while Bakshi was busy fighting McDonald’s, Domino’s conveniently overtook McDonald’s as India’s largest fast-food brand. Shares of India’s Domino’s Pizza operator Jubilant FoodWorks Ltd. have more than doubled in 2018. Domino’s, KFC, Burger King and Subway have capitalised on McDonald’s legal troubles Hardcastle Restaurants, the runs 271 stores in the Southern and Western parts of India plans to expand to as many as 500 outlets by 2022. Masala Dosa Brioche, Mexican and Italian rice bowls are some variants recently introduced for the southern pallette In December 2018, McDonald’s, has finally recorded a profit of ₹6.52 million (US$92,426) in India since the time it debuted in the country in 1996.
- #16 Donut with text inside (Intermediate) To reproduce the donut shape on this slide, do the following: On the Home tab, in the Slides group, click Layout, and then click Blank. On the Home tab, in the Drawing group, click Shapes, and then under Basic Shapes click Donut (third row, second option from the left). On the slide, drag to draw a donut. Drag the yellow diamond adjustment handle to the left to decrease the width of the donut. Select the donut. Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 5.92”. In the Shape Width box, enter 5.92”. Under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Outline, and then click No Outline. Also under Drawing Tools, on the Format tab, in the Shape Styles group, click the arrow next to Shape Fill, and then under Theme Colors click Olive Green, Accent 3, Darker 25% (fifth row, seventh option from the left). Also under Drawing Tools, on the Format tab, in the Shape Styles group, click Shape Effects, and then do the following: Point to Bevel, and then under Bevel click Soft Round (second row, second option from the left). Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). To reproduce the text on this slide, do the following: On the Insert tab, in the Text group, click Text Box, and then on the slide, drag to draw the text box. Enter text in the text box, select the text, and then on the Home tab, in the Font group, select Consolas from the Font list, enter 27 in the Font Size box, click the button next to Font Color, and then under Theme Colors click White, Background 1 (first row, first option from the left). Tip: To enter the two bullets with the text, on the Insert tab, in the Text group, click Symbol. In the Symbol dialog box, do the following: In the Font list, select (normal text). In the Character Code box, enter 0095 to select BULLET, and then click Insert. On the Home tab, in the Paragraph group, click Align Text Left to align the text left in the text box. Select the text box. Under Drawing Tools, on the Format tab, in the WordArt Styles group, click Text Effects, and then do the following: Point to Shadow, and then under Outer click Offset Diagonal Bottom Right (first row, first option from the left). Point to Transform, and then under Follow Path click Circle (third option from the left). Under Drawing Tools, on the Format tab, in the Size group, do the following: In the Shape Height box, enter 4.78”. In the Shape Width box, enter 4.78”. Drag the text box onto the donut shape so that the text wraps around the donut. If the text does not wrap completely and evenly around the donut shape, select the text box and then do the following: If the text does not wrap completely around the donut shape, on the Home tab, in the Font group, in the Font Size box, enter larger font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the entire line of text does not fit evenly within the donut shape, on the Home tab, in the Font group, in the Font Size box, enter smaller font sizes in 1-pt increments until the text is evenly spaced within the donut shape. If the text does not wrap completely around or does not fit evenly within the donut shape, also try editing the Character Spacing. On the Home tab, in the Font group, click Character Spacing, and then do the following: To expand the text, in the Character Spacing list, select Loose or Very Loose. To contract the text, in the Character Spacing list, select Tight or Very Tight. For more precise character spacing, click More Spacing. In the Font dialog box, on the Character Spacing tab, in the Spacing list, select Expanded or Condensed. In the By box, adjust the size by 0.1-pt increments until the text is spaced evenly. Press and hold SHIFT, and then select the text box and the donut shape. On the Home tab, in the Drawing group, click Arrange, and then click Group. Select the group. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following: Click Align to Slide. Click Align Center. Click Align Middle. To reproduce the background on this slide, do the following: Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following: In the Type list, select Radial. Click the button next to Direction, and then click From Center (third option from the left). Under Gradient stops, click Add or Remove until three stops appear in the drop-down list. Also under Gradient stops, customize the gradient stops that you added as follows: Select Stop 1 from the list, and then do the following: In the Stop position box, enter 0%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 25% (fifth row, ninth option from the left). Select Stop 2 from the list, and then do the following: In the Stop position box, enter 54%. Click the button next to Color, and then under Theme Colors click Aqua, Accent 5, Darker 50% (sixth row, ninth option from the left). Select Stop 3 from the list, and then do the following: In the Stop position box, enter 100%. Click the button next to Color, and then under Theme Colors click Black, Text 1 (first row, second option from the left).