Logistics and Operation Management.

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.  

Names of suppliers and products they supply

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Analysis of the supply chain for McDonalds fish products

We have chosen to analyze McDonalds fish products; only 100% cod that have been caught in the clear waters of North Atlantic are used for McDonalds’ fish fingers and fillet o fish.  Only approved factories are used for the supply of fish products, which produce skinless de-boned cod.  The supplier’s technical personnel and McDonalds quality assurance department and independent auditors regularly visit and audit these factories to ensure that the very high standards are maintained.  When preparing the fish blocks, no additives of any kind are used in the production.  The cod can be traced back to the day it was caught and the vessel that caught it.  Great efforts are made to remove all the bones from the fish when processing it; also a great deal of care is taken to make sure that fish of the highest quality is used.  To make sure that all requirements are met at all times, 23 separate quality checks are made during manufacturing.  All fish products, which are produced by Coldwater Seafood LTD, are originated from suppliers who comply with the UK and EU legislation relating to animal welfare, which are approved by the assurors.  The schemes cover the following areas:

• Environment and Hygiene Management
• Identification and Trace ability
•  Handling facilities

The manufacturing process of fillet o fish:

• Fish products supplied by Coldwater Seafood ltd
• Burger buns are supplied by Golden West foods ltd
• The cheese slices are supplied by Dairy Produce Packers.

These products are dispatched and distributed to McDonalds stores from the supplier as ordered; this is done to ensure freshness of the product.  The production of the fillet o fish is done on an instant basis to ensure customer satisfaction.

Figure 2: this figure shows McDonalds supply chain, from the main head office of McDonalds to the actual consumers.

To ensure customer satisfaction, McDonalds need to meet the demand as or when made.  The process that is used by many fast food retailers is the JIT process. Just in time process means producing a product or a service exactly when they are needed.  Not before or after the customers require them.

 “JIT (just-in-time) aims to meet the demand instantaneously, with perfect quality and no waste” (Slack et al, 2001)

                       

Figure 3: just in time process (Walters, 2002)?

McDonalds has made billions of hamburgers using elements of Just-in-time, from the time of order from the customers to the payment from them; the burgers or the meals are ready to be consumed.  If they are any later than the time ordered, customers will be dissatisfied.  So it is vital for McDonalds to use the JIT process in order to keep quality and satisfied customers.            

Customer service factors  

“Customer service can be defined as the interaction of all the factors that affect the process of making products and services available to the buyer.  These factors, although situation specifies, covers such areas as inventory leads, delivery frequency, consistency and reliability of delivery, ease of order administration and the time taken from order placement through to satisfactory installation or consumption”  (Brassington and Pettitt, 1997)         

Comments on how well the customer service factors are addressed for both the consumer and the retailer

It is vital for McDonalds to meet consumer demand.  If it is not met, they can lose their customers to other competitive companies such as Burger King, KFC etc.  if there is more demand then McDonalds need to consider the amount of staff needed to work at certain busy periods.  The consumers opinions are very important not only for consumers but for retailers too.  If the customer is not happy with the service provided, they can either talk to McDonalds staff or via help line.  McDonalds have a website where you can access information about the company.  When there are changes made to the product, McDonalds use different methods of promotion to let the customer know what is going on.  When consumers place an order in a restaurant and these orders are met within a specific time, this will establish a good relationship with the consumer and the retailer.  This is because McDonalds also highly depend on its good reputation, as they are well known in the UK as well as all over the world.  When it comes to the retailer setting its policies for the supplier, it makes sure that they follow certain rules set by the government.  McDonalds complies with all current legislations and where possible they try to act so that future environmental legislation is not too hard to act upon.  The company appoints its own Environment manager who regularly sets targets, monitors and reports on the process of their suppliers.  The executive group endorses the policy, which have been communicated to both employees and suppliers.  The policy is reviewed every year to make changes or update the policy if the law changes, but this is only done when necessary.  These policies influence the way McDonalds does business.  The way the business impacts the environment is through:

• Sowing agricultural products and other materials to serve and build restaurants.
• The operation of restaurants and admin functions.

Overall McDonalds have a very strict policy that it complies with and makes sure that their suppliers integrate with them and these policies.