mcdonald's operation management assignment

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McDonald’s Operations Management: 10 Critical Decisions, Productivity

McDonald’s operations management (OM) supports the company’s position as the largest fast-food restaurant chain in the world. The business implements solutions pertaining to the 10 decision areas of operations management, such as supply chain management for the movement of ingredients. In these 10 strategic decisions, McDonald’s aims for maximum operating efficiency and productivity to facilitate business strategies that rely on low production costs. For instance, in process and capacity design, which is a part of operations management, the food service company optimizes production processes to minimize costs and enable competitive selling prices. In this regard, operations management effectiveness impacts how the goals of McDonald’s mission statement and vision statement are achieved. Operations strategy and related strategic planning determine the restaurant corporation’s overall business performance.

With the 10 decisions of operations management, McDonald’s optimizes the business to counteract competition. The company competes with Wendy’s , KFC, Dunkin’, Burger King , Subway, and Arby’s. McCafé operations also compete with Starbucks and Tim Hortons, as well as some PepsiCo beverages and Unilever ’s Bru coffee, which can be purchased online in various countries. The Five Forces analysis of McDonald’s Corporation shows that these competing firms impose a strong competitive force, which influences the company’s operations strategy and measures for optimal productivity.

McDonald’s Operations Management: 10 Critical Decision Areas

1. In the design of goods and services , the objective is to develop the best product, given the resources and limitations of the fast-food company. In this case, McDonald’s aims for high efficiency of service operations, and the standardization of goods. High efficiency and productivity in food preparation minimizes production costs. On the other hand, standardization of goods contributes to menu and product consistency and customer satisfaction at store locations. In this strategic decision area of operations management, managers are concerned with satisfying the general public, which is the target market based on McDonald’s generic strategy for competitive advantage and strategies for intensive growth . The company aims to attract everyone to its fast-food restaurants. Also, in making product design decisions, operations managers account for the product element of McDonald’s marketing mix or 4P . Thus, the strategies and tactics in the fast-food company’s marketing mix relate to this strategic decision area of operations management.

2. Quality management involves matching McDonald’s food, drinks, and service to the quality expectations and preferences of target consumers. The operations strategy applies policies and measures to ensure that such matching is achieved at company-owned, franchised, and licensed locations. Product standardization comes with quality consistency, which contributes to the business strengths identified in the SWOT analysis of McDonald’s Corporation . Such quality consistency helps the fast-food business satisfy consumers’ expectations. However, McDonald’s operations management faces the challenge of maintaining satisfactory quality despite cost minimization, which is essential for competitive selling prices.

3. Process and capacity design is a decision area that pushes operations management to optimize production processes, such as the production of intermediate ingredients used to make burgers and fried chicken. McDonald’s operations strategy maximizes the benefits of economies of scale in production processes, in order to support competitive pricing. For example, the company employs custom equipment for large-scale and high-speed food preparation. In this way, operations management achieves high efficiency in production processes and the minimization of costs at corporate facilities, hubs, and restaurants. Also, the production line method maximizes productivity and capacity utilization at McDonald’s restaurants.

4. For its location strategy , McDonald’s has various facilities that support its operations. The operations management objective in this strategic decision area is to establish and maintain locations that optimally account for access to target consumers, access to resources, the supply chain, costs, productivity, and economic variables. For example, McDonald’s production facility locations satisfy restaurants’ supply requirements. Also, company-owned, franchised, and licensed locations are established for maximum market reach. In this decision area, McDonald’s operations management involves restaurants, kiosks, and the company’s websites and mobile apps as venues. Other locations considered are those of third-party distributors or retailers of McCafé products, such as Walmart , Costco , Amazon , and Target. Through these locations or venues, the global fast-food restaurant chain reaches customers in traditional and online ways. Also, McDonald’s business structure (company structure) determines the locations of facilities and resources, including human resources.

5. Layout design and strategy aim for high efficiency in moving resources and information throughout McDonald’s business organization. For the movement of information at the fast-food company’s offices and other locations, information technology offers high efficiency with minimal drawbacks. On the other hand, at restaurants and kiosks, McDonald’s operations strategy involves layouts that maximize space utilization and productivity, rather than comfort and spaciousness. For example, kitchens are designed to match steps in food preparation. Also, many small tables are arranged to accommodate large numbers of diners at the restaurants.

6. In human resources and job design , operations management has the objective of developing and maintaining an adequate workforce for McDonald’s business development. The multinational corporation supports the staffing needs of its restaurants. For example, the company has standardized training programs for skills needed in food production and preparation. This support is in addition to the human resource policies and measures that McDonald’s franchisees and licensees implement on their own. For this decision area of operations management, individual and organizational learning are also emphasized throughout the fast-food restaurant chain. McDonald’s organizational culture or corporate culture influences human resource management programs to facilitate such learning.

7. Supply chain management aims to maintain high effectiveness and operating efficiency throughout McDonald’s supply chain. The food service company’s operations management uses information technology to inform suppliers and enable them to match their operations to the company’s supply needs. McDonald’s has a mixture of regional suppliers for highly standardized ingredients, and local suppliers for perishables. In this context, suppliers’ productivity affects the restaurant company’s productivity. With this consideration, McDonald’s corporate social responsibility (CSR), ESG, and stakeholder management strategy and other business strategies impose policies and rules for suppliers, to minimize disruptions in the supply chain.

8. In inventory management , McDonald’s operations management objective is to ensure adequate inventory for smooth business operations with minimal disruptions in resource availability. This decision area of operations management functions as an interface between the supply chain and the rest of the food service organization. Materials from suppliers pass through inventory management, or are stored for later use, depending on the requirements of the corporation and its restaurants. Inventory management effectiveness influences productivity at store locations. In this regard, McDonald’s minimizes inventory costs while supporting restaurant operations.

9. Scheduling at McDonald’s follows industry best practices, with considerations for supply chain capabilities, market conditions, and regulations. The strategic objective in this decision area of operations management is to apply schedules so that resources and assets are utilized to their full potential, while the fast-food chain satisfies its target customers. Regular schedules are used for McDonald’s corporate offices and restaurant locations. Also, seasonal schedules may be applied to support operations during spikes in market demand for fast food. Operational effectiveness is achieved by matching the schedules to the requirements of McDonald’s and its partners.

10. In maintenance , strategic decisions focus on maintaining stable operations, which relate to the stability of operations at the company’s corporate offices and stores. To maintain high productivity, McDonald’s operations management monitors the needs of its restaurants, and uses the resulting data to inform maintenance teams. Third-party service providers are also used in some situations, such as for the repair of cooking equipment and machinery. At McDonald’s hubs for material distribution, maintenance is implemented in terms of matching operational capacity and human resources to the current needs of the business organization. In this context, operations management also uses real-time monitoring and control to ensure that decisions and actions correspond to the current conditions of the food-service company. Considering the international scope of the business, the global, regional, and local trends characterized in the PESTEL/PESTLE analysis of McDonald’s Corporation influence the maintenance requirements and the tools available to maintain stable operations and high productivity.

Productivity at McDonald’s

With regard to the 10 strategic decisions of operations management, McDonald’s works toward maximum productivity in all its business areas. The following productivity metrics are some of the criteria applicable to McDonald’s operations management:

• Order fulfillment rate (productivity at McDonald’s restaurants)
• Stockout rate (productivity of inventory management, hubs, warehouses, and distribution facilities)
• Timely delivery rate (productivity of deliveries, including third-party delivery services)
• Akkaş, A., & Gaur, V. (2022). Reducing food waste: An operations management research agenda. Manufacturing & Service Operations Management, 24 (3), 1261-1885.
• Alexander, T. (2023). Unwrapping the McDonald’s model: An introduction to dynamic social theory. The Journal of American Culture, 46 (3), 232-241.
• Amirul, S. R., Pazim, K. H., Amirul, S. M., Mail, R., & Dasan, J. (2022). Developing and validating the qualitative labour productivity measurement in service industry. Quality & Quantity, 56 (4), 2853-2874.
• McDonald’s Corporation – Food Quality & Sourcing .
• McDonald’s Corporation – Form 10-K .
• McDonald’s Corporation – Our Commitment to Quality .
• McDonald’s Corporation – Where We Operate .
• McDonald’s History .
• Veiga, G. L., Pinheiro de Lima, E., & Gouvea da Costa, S. E. (2022). An efficiency-frontier based procedure to improve operations strategy. Journal of Industrial Integration and Management, 7 (03), 367-399.
• Zhou, L., Jiang, Z., Geng, N., Niu, Y., Cui, F., Liu, K., & Qi, N. (2022). Production and operations management for intelligent manufacturing: A systematic literature review. International Journal of Production Research, 60 (2), 808-846.
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McDonald’s Operation Management & Supply Chain

Need to write a McDonald’s operation management assignment? This case study on McDonald’s operations explores the issues of the company’s supply chain & production system strategy.

Introduction

• Background Information
• Operation Management

Operations management is defined as the planning, scheduling, and controlling of all the activities that can transform organizational inputs into finished goods and services. It focuses on effective organization and control of manufacturing through the application of such concepts as engineering, quality management, production management, accounting, and management systems. In addition, it entails making use of all the resources available to produce finished products or services and to meet the customers’ needs in a cost-effective manner. Research of McDonald’s operation management will provide an understanding of its success with customers and in the industry.

The processes involved in operations management are the creation of the products, development, production, and distribution. Other activities that are related to the phenomenon are the regulation of purchases, control of inventory, quality, storage, and overall logistics. They can be realized through efficient and effective processes (Heizer, 2022). Operations management places a significant focus on the management of the processes involved in the creation and distribution of the products.

McDonald’s Case Study: the Background

McDonald’s is the largest and most popular of the fast-food chain restaurants in the world. It was founded by Dick and Mac McDonald in California in the year 1940 and facilitated by the initiation of franchised restaurants by Ray Kroc. MacDonald’s serves approximately 47 million clients per day.

They have approximately 30,000 outlets located in various parts of the world and subsidiaries in over 120 countries and territories.

In all the McDonald’s restaurants in the world, there are several operations that have a relationship with the overall strategy of the organization. In this portfolio report, the details of McDonald’s competitive strategy, supply chain, quality management, raw materials, and forecasting are reviewed.

Among the foods that are sold at McDonald’s are hamburgers, cheeseburgers, French fries, milkshakes (chocolate, strawberry, and vanilla), coke, orange, root beef, and coffee. McDonald’s menu is synchronized into beef, chicken, bread, and potatoes.

MacDonald’s operations are concentrated in the service industry, and the greatest challenge in the industry is that there is much need for warmth and friendliness in order to meet the customers’ satisfaction. It is the largest food services company in the world, and it is considered the leader in global food service retailers (Sinha, 2023).

The main operation that can take place at McDonald’s is services, which are realized through taking orders by the staff and getting the same orders ready for the customers.

McDonald’s Operation Management

Mcdonald’s supply chain.

Supply chain management enables organizations to get the right goods and services to the place they are needed at the exact time, at proper quality and quantity, and at an affordable cost.

Managing the supply chain process involves overseeing the relationship between suppliers and customers, controlling inventories and forecasting demand, as well as getting feedback concerning what is happening at whichever link of the chain.

In McDonald’s Corporation, the restaurants also have various and particular suppliers that provide them with raw materials like buns, patties, beef, sauce disposable cups, and other food packaging materials. This stresses the fact that the corporation has to manage its relationships with the suppliers in order to receive its raw materials at the right time, with proper quality, and at an affordable price.

McDonald’s supply chain is that of a three-legged stool where there are the corporation, suppliers, and operators. The supply chain involves purchasing and logistics. The supply chain of McDonald’s encompasses the following challenges: a strong focus on quality and freshness, product innovation, fluctuation of customer demand, and order inventory management.

McDonald’s Global Business Strategy

With the boom experienced in the fast-food market, McDonald’s has developed a strategic plan that will enable it to be at the top of their competitors by selling their goods at affordable and friendly prices, providing more healthy meal options for their consumers, and great and quality services for their customers.

McDonald’s competitiveness is based on different aspects, including pricing, quality, employee training, and management. Consumers have confidence in the products of McDonald’s due to their nature of using tested and trusted brands that families buy and use in local grocery shops (McDonald’s, 2022). Its only competitive advantage is that McDonald’s shopping cart is usually bigger.

McDonald’s restaurants operate in a competitive and challenging environment, and they achieve their competitive edge by providing customized products and services. Without strategies, ineffective competitors cannot withstand the market competition.

To maintain its competitiveness, McDonald’s employs a competitive strategy that enables it to compete in various aspects, for instance, the speediness of its services, meeting nutrition demands, and meeting customer satisfaction, as explained below.

Speed : This is the ground that prompts McDonald’s to provide speedy and affordable services. After performing comprehensive market research, McDonald’s realized that its customers stressed the desire for speedy services as their top priority.

This made it endeavor to provide fast, friendly, and accurate services in order to meet customer demands. McDonald’s deems it necessary to measure their speed performance and compare it with their desired targets. This is normally reported to the quality management department. This speed enables the company to sell their products at a lower cost.

Cost : Offering their services at a lower cost requires an effective and efficient process. This efficiency is stressed and well indicated in the company’s goals and vision statement. To offer value for money, McDonald’s has employed several strategies, which include a value meal where customers can buy goods at a discounted price, especially when they purchase sandwiches, French fries, and beverages together.

McDonald’s provides seven to twelve meals at one meal menu. Secondly, McDonald’s has applied the strategy of a dollar menu, which encompasses several individual products that are sold at the price of only $1 each. This proved to be successful when it was tested in southern California and was later incorporated into several of their shops.

McDonald’s operations management has also included several promotions to boost their sales. The popular promotions are the $0.39 hamburger on Wednesdays and other big occasions and the Big Mac Monday.

Nutrition : This is the third competitive strategy for McDonald’s. This has been prompted by the change in health and consumption trends and, hence, the need to promote better nutritious options. The offering of Go-Active meals, which include salad, bottled water, and a step-o-meter to track customer steps daily.

There are several health options in various countries depending on the diet of that region. McDonald’s is always considerate of the needs and desires of its customers and their health.

This has been achieved by assembling their Global Advisory Council on balanced lifestyles, which can advise and assist in exercise and obesity measures. This is to ensure that McDonald’s takes responsibility for helping its customers achieve optimal health.

McDonald’s also utilizes modern technology to enhance the efficiency of its services so that customers can select their menu combination over the Internet and conduct nutritional analysis on their menu selection (WBR Insights, 2023). This has given McDonald’s an edge over its competitors.

The driving objective of McDonald’s is to make their customers happy through the enhancement of their competitive dimensions of speed, price, nutrition, and customer satisfaction.

When we rate and compare McDonald’s with its competitors like the Charlie Trotters in Chicago, McDonald’s competes on the platform of cost or price, flexibility, and delivery of services, where they offer their goods at a cheaper cost, deliver their products within minutes of the order, and they embrace flexibility in their product choice. In contrast, Charlie trotters compete to provide top-performance quality with excellent meals, but they are expensive (Khan, n.d.).

McDonald’s Operation Management & Production Process

Since it is a fast-food company and serves dynamic customers with different tastes and preferences, McDonald’s Corporation has developed special dishes on the menu based on various factors, including the country, population, culture, and recipes.

To realize quality operations, McDonald’s employs advanced technology in calculating the time a particular process can take. They have also created a database for observing time and making improvements.

One of the particular specific measurement tools is the Total Time in Line, which computes the time a customer spends in the McDonald’s line from the time of ordering until the time he begins to be served, and the target time in this process is 90 seconds.

There is also a system that supports fulfilling speedy orders like the Made for You system, which utilizes the Kitchen-video-System, which eases the process of data entry for the staff.

McDonald’s also utilizes technology in the drive-through area. This is whereby, when a drive-through worker is making an order, the order is displayed straight on the screen available for the customer, which is called the Customer Order Display (COD).

Through this screen, the customer can make changes or correct mistakes incurred in the ordering process. This makes ordering processes precise and efficient, hence minimizing time spent.

Regarding the use of technology, McDonald’s operates an automated system where a computer keeps track of what is available in the restaurant (“McDonald’s value chain analysis,” n.d.). It also monitors what the distribution center needs to ship to the restaurant on a regular basis instead of having to wait for inventory requests from the restaurants.

The Internet is also used at the McDonald’s to advertise their products. McDonald’s offers sales promotions online through coupons, and they also have sweepstakes and online contests.

The Internet is utilized by McDonald’s as a platform for performing public relations and individual selling. Their official website is well known; it is a comprehensive one with all the requisite information needed by the customers, including the menu, location, and pricing.

McDonald’s Commitment to Quality

McDonald’s commitment to quality is measured through the time it takes to process orders and customer products, which can be realized through effective and efficient operations.

To enhance its quality, McDonald’s must ensure that inspection is carried out on all foods. Every McDonald’s restaurant should check on food temperatures, dates of expiry, and several other food hazards every day.

The restaurant has a comprehensive standardized food safety operation that is made available to all restaurants, and it contains the food items that should be measured.

Consequently, periodic controls and corporate inspections are regularly undertaken, whether with or without notice, and there are a minimum of two inspections every year in all restaurants. Furthermore, to ensure quality, store managers in every restaurant perform inspections frequently.

McDonald’s also applies the five Ps policies to enhance their quality. These are people, price, promotion, product, and place. People are the individuals who are employed in McDonald’s chains and are represented by services, hospitality, and pride.

McDonald’s staff are trained and retained in order to save the cost incurred in training short-term and inexperienced workers. Product includes taste, quality, and price of their products. This is usually dynamic since they are dictated by the customer’s tastes and preferences as defined by the market. Maintaining the quality of food is always a top priority at McDonald’s.

Place indicates a clean, relevant, and modern store in all the McDonald’s surrounding environment, be it the restaurant, the kitchen, or the restroom. This is aimed at ensuring safety and comfort for their consumers. Promotion concerns marketing, leadership, and trust; this has earned the company a reputation for quality food for its customers.

McDonald’s Inventory Methodologies

Inventory management is a critical operation in any organization. This is because it involves identifying and selecting the best method of inventory control. Before selecting the organization’s method of controlling inventory, it is imperative to factor the product demand into mind.

There are different modes that companies consider in selecting their inventory methods, but the common denominator is that companies should ensure that their mix of inventory types can satisfy the demands of the customers and that it can deliver the needed profit and cash flow.

In McDonald Corporation, the inventory is managed on a First-In-First-Out basis. This is necessary and applicable due to the fact that their inventory entails perishable items, and as such, the deliveries are made twice or three times a week based on the restaurant business.

Consequently, the inventory is stored in freezers that have proper packaging to maintain the freshness of the items. These activities and other issues regarding inventory are undertaken by the inventory management of the organization.

In particular chains, restaurant managers are charged with the task of tracking inventories of food, wrappers, and cleaning suppliers. Other orders required by the restaurant are sourced from the distribution center and then shipped to the restaurant.

McDonald’s Management System

Managing McDonald’s is a heavy task, and being in charge of its daily operations is an enormous duty and quite a challenging one.

To achieve and manage McDonald’s successfully, it is imperative that there should be adequate infrastructure and up-to-date information and communication technology. Animal welfare is at the center of McDonald’s company policies. They communicate their policies, including their animal welfare policy, to all those in the supply chain.

The following is the leadership structure of McDonald’s:

The CEO at the top has the responsibility of overseeing the major activities of the company; below him are the managers who are in charge of operations, development, finance, marketing, and sales. The supply chain unit falls in the department of finance.

McDonald’s & New Markets

McDonald’s corporation is organized in a lateral manner where the CEO is at the apex of the management, whereas the managers of other departments are outsourced. Other parts of the structures that reflect outsourcing are:

Consulting: McDonald’s always considers the company’s present and prospective financial position. The consultants deal with matters of development, strategies, and identifying the opportunities for growth for the organizations.

McDonald’s is a visible and popular brand in the world. It has developed to be one of the food chains with popular food brands around the globe.

With the current increase in exposure to new markets, especially in the emerging markets of Asia and Europe, McDonald’s continues to witness unprecedented growth in its operations in order to tap into these new markets. McDonald’s strategy encompasses four main dimensions: financial, learning, customer, and internal process.

Operations management is an important function in an organization since it concerns the relationship with the company strategy. Operations management plays a key role in the development of a company strategy, hence enhancing the competitive advantage of the company.

An example is the planning process that will assist an organization in minimizing costs while gaining an advantage in competitiveness and cost. It is, therefore, necessary for an organization to manage its operations as a measure of boosting its organizational strategy.

From the analysis of McDonald’s operation strategy, it is evident that consistency and quality of services are order winners, whereas speed, cost, efficiency, and innovation are the order qualifiers. This has resulted in an enhanced market share and massive consumer buying power.

McDonald’s is a market leader and a household name in the fast-food industry. Its marketing strategy is very strong, and it is placed under the supervision of the mother company, irrespective of its outlet in the world. Their prices, customer service, and quality are unparalleled.

Heizer, J. (2022). Sustainability and supply Chain (14th ed.). Pearson.

Khan, B. (n.d.). Operations management in McDonald’s . Scribd. Web.

McDonald’s Value Chain Analysis . (n.d.). Edrawnax. Web.

McDonald’s. (2022). Our purpose & impact . McDonald’s. Web.

Sinha, S. (2023). How McDonald’s became the world’s largest fast-food chain . Medium.

WBR Insights. (2023). McDonald’s successful rollout of mobile ordering and self-serve kiosks across the US . Future Stories.

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Bibliography

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Operations Management Assignment: Case Analysis of McDonalds

Task: It is an individual research report on operations management assignment that is focused on ensuring that students are able to do quality research (peer reviewed articles (most important), textbook, reports, etc.) into the fast food industry. Students are expected to answer the following questions:

• Identify both established and emerging consumer value propositions within the fast found industry.
• Provide a process map (or flowchart) of a fast food restaurant’s order fulfillment process.
• Discuss the application of manufacturing excellence in fast food chains
• Review the relationship between service quality and profitability in the industry
• Describe the current and potential operational challenges faced by managers in the fast food industry.
• Provide recommendations for improving the service operations of the fast food restaurants.

Introduction: Marketing is the performance of organisational activities in order to achieve the maximum level of efficiency possible within an organisation. Via operations management, materials and labour are turned into commodities and efficiency of a company.The importance of publicity in sales, market demand, overall customer perception cannot be overstated. Finance is in charge of cash flow management, financial assets, and deposits. The utilization of information flows falls under the purview of MIS.The logistics management of McDonald's Corporation respects McDonald's status as the world’s biggest fast food chain. The communications in charge of managing the customer experience manufacturing process is leadership of processes. It entails the planning, organization, scheduling, and maintenance of all resources required to deliver a company's goods and services.Since strategic planning is a managerial practice, it forms an integral part of staff, equipment, technology, documents, and other infrastructure needed for the producing goods and services.The main framework and role of each organization is operations management. That is so, either in the manufacture or business, for profit or not, whatever the scale of the business, in the sector it is. This section of the study is also prepared in order for corporate organizations to expand and evaluate the supply chain and operating processes in the sense of a well established McDonalds Company. The study presents a short discussion mostly on organization's adapted technology and on the management framework, which enable the enterprise to take top priority on the business.

Background: The McDonald's Company is an American enterprise which deals with fast food, established in 1940 in San Bernardino, California, named Richard and Maurice McDonald's Restaurant, USA (Yan, 2020). In 2018, McDonald's has been the largest network of restaurants all over the world with over 69 million clients serving in 37,855 stores in over 100 countries.

McDonald's was working with its business strategy and name during the first decades. Since then, it has identified a workable solution. The recent history of the organization is particularly remarkable for its comparatively few note pieces. McDonald's has been growing rapidly for almost 70 years and new stores have opened up steadily while gaining and losing customer (Puzakova et al., 2015). McDonald's is most known for burgers, but it does have chicken and breakfast products. In order to meet the changing consumer tastes and the adverse reaction to the health implications of its items, the company has launched the menu of vegetables, fish products, milk shakes and fruit. The McDonald's Company's income is derived from rents, franchisees' income and corporate earnings. Two figures in 2018 show that McDonald's is the second largest private employer with a workforce of 1.7 million.

Discussion: Management of operations includes using personnel, supplies, facilities and technological tools. Operations administrators purchase, produce and supply products to customers depending on customer requirements and business capabilities. McDonald's mission is to include affordable goods in this strategic business decision field (Candelo et al., 2016). The scale of its goods and costs therefore are focused on the most famous preferences of consumers. However, certain McDonald goods are reduced to a minimum to make it more competitive.

Identification of consumer value proposition: Established consumer value: McDonald's is renowned for its value offering, a constantly good meal consumed worldwide rapidly and constantly. Families, young adults, older people and businesses are the principal consumer groups. The core corporate associates of McDonald are the operators of their franchises. Over than 80% of McDonald’s outlets have been licensed at the end of 2013. Along with its distributors a three-legged platform such as retailers, franchises and McDonald's is the basis for the company's concept. For a company to be successful, every leg must prosper. Operational management primarily covers procurement, distribution and service delivery preparation, scheduling and supervision. This also stresses the distribution that makes sure a company transforms inputs into outputs effectively (Langert, 2019). Both inputs may include materials, machinery and technologies, including staff and visitors. The way to collect, package, mail and deliver a customer is to complete the order. It is procedure to stock, select and prepare a package, ship and send an automatic email to the buyer informing them that the order is in progress. In order to excel, a customer service approach must be applied in all areas of the enterprise. Customer management concentrates on obtaining, serving and retaining individual customer groups. The distribution network approach has an iterative method for the valuation of operating components for cash payments. In order to accomplish a high level objective, a business plan involves utilizing a corporate core competency. Development of a comprehensive client plan for and target audience means that the firm is better off on the business than its rivals. Organizations would benefit from synchronized campaign schedules with their wider demand forecasting programs for the long term and would monitor product predictions and inventory levels in real time. No systemic approach is effective for every business since a product contains various colors. Some organizations are in charge of any application directly and some are too big to bear the responsibility of a service provider to a logistics company. McDonalds is driven to increase the product range with increased competition for choice and nutritious ingredients (Langert, 2019). The methods used to gather order mostly in future may not evolve, but the tools that enable it to evolve to be further designed and adapted to the special needs of retailers and suppliers. Besides that trend, companies still have growth opportunities in the new field and new consumers as unique goods are required and products in several regions worldwide have to be distributed rapidly. The McDonald's Environmental Scorecard is a means of measuring the environmental efficiency of manufacturers with annual statements for energy, waste, water and air.

Emerging consumer value: The fast food industry of McDonald’s is gradually recognizing the change in pattern of their consumer demands. The food industry has gradually adapted many analysis based on customer data. The industry giant has stepped its analysis based on whether its customers are trading towards smaller meals or they are not opting out Cokes into their orders. McDonald’s is now planning to apply strategies for increasing its consumer value proposition especially in the areas of dinner and breakfast.

Figure 1: Process Map (Source: created by author using Draw.io)

Manufacturing excellence application in fast food: The high hygiene and quality in a restaurant impresses customers across the world. Both of them uphold their quality standards in an exceptional way. This brings up the issue of how millions of people in the whole chain around the world should be certain that they meet the same standards and legitimate quality concerns. McDonald's mission is to include inexpensive goods in this business decision field of operational management. The nutritional values and price of their goods are according to the most common standards of consumers. But some McDonald's offerings are reduced in size so that they are more economical. The achievement of McDonald can be directly linked to its very strong tradition, from the very first opening through to the current situation that connects the franchises. Its main drivers are people, including the consumer's product supporters. Organization structure is a reliance on symbolic principles and beliefs that form and are abstractly divided into experiences by participants in organizations, enabling them to give special meaning to the triggers found in their organizations. Specific instructions are included on cleaning, food processing, treatment of staff and hygiene. They contribute to an effective, secure and supervised growth and customer service. McDonalds' mission is to reduce production cost by promoting restaurant operations in this strategic operational decision field. The company does not promote the food and recipes served in its establishments. Instead, domestically and internationally counterparties and suppliers trade their wares with McDonald's staff.

McDonalds' quality lean manufacturing has been credited as being among the main factors in the company's rise through the ranks of something like the restaurant business.The manufacturer's knowledge management have been digitized, and operational procedures to ensure continuity across the board have been well developed.The corporation uses routine checks at and of its outlets to ensure quality requirements are respected (Nadolny&Nadolny, 2015). Furthermore, it holds monthly training and other training sessions to raise its workers' knowledge of the business quality levels and customer loyalty indicators and techniques.

Analysis of the quality and profitability: The main approach to optimize logistical procedures and the main mechanism of obtaining customer's expression are customer support measurements. It seeks to improve the competence of its products under restrictions such as expense and price caps. McDonald's services a line method to guaranteesteadiness in product collection(Watson, 2020). Consistency in the business judgment field of operations management meets the perceptions of customers regarding McDonald's and its product. The administration of the operations addresses many technical questions including the scale of production facilities and project management approaches and the implementation of the IT core network. Other organizational problems involve inventory management, such as the standard of productivity in progress and the procurement of raw materials, product quality, manipulation of products and service policies (Tien, 2019). A business' decision to get consumer measurement is vital to progress in quality service, speed and expense maximization. The two most important elements of customer support are cost and quality. It will increase retail costs and competitors' productivity in a productive supply chain (Rajawat et al., 2020). High production also means that as their goods are shipped, they will match or surpass the consumer needs. The management of employees is focused on science that shows that employees should be compensated for achieving their defined goals. The McDonald's food supply used workplace promotions and fair salaries to honor and encourage hardworking workers (Panwar & Patra, 2017). McDonalds rewards certain monthly honors and constructive observations and cognitions of excellent and outstanding workers in various ways. The company has adopted detailed and accurate processes that regulate the workplace environment of workers and guarantee that food items sold in all its outlets to consumers are of consistently high quality (Crawford et al., 2015).

McDonald’s Corp's sales have decreased 6% to $4.71B since 31 March 2020, according to a new report. Net income declined by 17 percent to $1.11B. In regional economy, the revenues decreased by 10 percent to US$2.4 billion, foreign trade industries and businesses fell by 2 percent to US$439.1 million, and international supply markets fell by 10 percent to USD 2.4 billion. Free cash flow is perceived to be a key factor in measuring the revenue capacity of capital investors in industry since the numbers are not applicable in terms of depreciation, depletion or amortization (Yamin&Alharthi, 2020). McDonald's cumulative free cash flow shares have been 16.60% annually in the last 12 months. In the last three years there has been an average free cash flow per distribution of 15.00 per cent per year. The overall rate of increase in free cash flow throughout the last five years is 9.00% annually. The net Free Cash Flow stood at 5.70% a year for the last 10 years.

Challenges: Some of the related to ethical issues are consumer security, protection of employees, sustainability of goods, waste disposal, emissions, routine activities, job tension, constraining business atmosphere, employment policies, working time volatility, energy usage, power consumption (Assis et al, 2019). Overheads can conveniently be installed in the form of administrative costs, insurance, rental charges, or utilities. Excessive overheads could be especially harmful if not handled in a timely way, meaning that small companies face quite a major challenge (Yulianti, 2020). McDonald's advertise their products as nutritious but the irony is that junk foods are refined and rich in calories, salt and sugar, poor in vitamins and protein. Such a diet is associated with increased risk of cardiovascular disease, stroke, diabetes and several diseases. Low salaries are paid to staff in the fast-food sector. In trying to select a company's process approach, managers must rely on consumer needs, cost and quality (Cook et al, 2016). In all these ways, Burger King's approach worked well. They have been able to enhance the efficiency of their goods, adapt them to their consumers' needs and even reduce costs. Their capital is not linked in the production of new products or in item lines not enticing to the consumer. In reality, McDonalds did the contrary (Khan et al, 2020). McDonald's don't pay over time fees, since staffs are very busy. Pressure to maintain high income, low labor rates leads to underemployment, because employees tend to struggle more and more. As a result, there are common injuries. Most workers are individuals with few jobs and thus no other option but to work. Enforcement and regulation may be an important problem if it is not adequately dealt with. With the evolution of economies and technology (Osei-Kyei& Chan, 2017), a whole new range of laws will be brought with them. Unfortunately, companies sometimes don't know what they're asked of or don't appreciate. There are fines and sanctions in place at this stage, and a dilemma that could possibly be overcome.

Recommendations: Any service which exceeds the team or even the requirements of the customer must be reduced. Here can be helpful quick solutions, including the utilization of cloud storage, free phone calls, telecommuting and rental instead of purchasing office facilities (Ruparathna et al., 2017). New technologies can be adapted for the advancement of the work process which will help to complete the order and other tasks very easily and it will take less time. Also it will help to maintain the records efficiently which will help in the analysis for future growth of the company (Ramos et al., 2018). The individual teams should define, articulate and settle on their goals instead of using simple financial metrics. Identify how outputs are assessed, track success and assess management cycle efficiency. Customer satisfaction is the main thing in this business. So, they should put more effort in taking feedbacks regularly and work on the feedbacks for the maintaining a better relationship with the customers. Consider bringing in an advisor or a third party who could really track how the work is made available online and can determine when the customer experience goes wrong. They can help to choose from the best customer-oriented workers to rationalize the method of transfer (Annarelli&Nonino, 2016). The cash balance is monitored by several money management techniques. Take a look at applications that will produce budgets, measure VAT, automate payments and warn users to unexpected results (Hu et al., 2020). Whenever practicable it could be recommended to look at fixing expenses. Essentials such as power prices can be set.

Conclusion: Hence, from the research it is observed that operations management plays important role in organization to manage the business. The management of operation is associated with the most effective regulation of manufacturing processes and activities and includes firm methods used by businesses to improve manufacturing productivity. The connected supply chain involves of people, organizations, resources, practices and technology that help to create and distribute a product or service. The sale of products to consumers is another major facet of operational management. This involves ensuring the delivery of goods in the specified limit. Management of operations usually often monitors consumers to ensure the goods fulfill the requirements for consistency and features. As a business, McDonalds is a global success. In all over the worlds McDonalds have very similar structures, and even though there are variations, the effects on their standard American operating structure are minimal. For the smallest number of workers McDonald's manufacturing process treats McDonald's salary somewhat differently. McDonald's systems were rapidly established for an ever-growing restaurant industry and were produced at an extraordinary rate. McDonalds built an accessible, profitable supply chain focused less on corporate wisdom and more about people's intelligent and core beliefs that draw upon their company's equal treatment. However, due care and imagination would nevertheless become exceptional. When planning and training are well implemented, the business will increase and continue to overcome its rivals.

Reference: Annarelli, A. and Nonino, F., 2016. Strategic and operational management of organizational resilience: Current state of research and future directions. Omega, 62, pp.1-18.

Assis, L.S., Camponogara, E., Menezes, B.C. and Grossmann, I.E., 2019. An MINLP formulation for integrating the operational management of crude oil supply. Computers & Chemical Engineering, 123, pp.110-125.

Candelo, E., Casalegno, C.G. and Civera, C., 2016. Communication for preventing reputational risk. McDonald’s strategy and its impact on the Italian market.

Cook, D.M., Husband, P.S. and Boxall, J.B., 2016. Operational management of trunk main discolouration risk. Urban Water Journal, 13(4), pp.382-395.

Crawford, A., Humphries, S.A. and Geddy, M.M., 2015. McDonald's: A Case Study in Glocalization. Journal of Global Business Issues, 9(1).

Hu, X., Sun, L., Zhou, Y. and Ruan, J., 2020. Review of operational management in intelligent agriculture based on the Internet of Things. Frontiers of Engineering Management, pp.1-14.

Khan, A.H., Cao, X., Li, S. and Luo, C., 2020. Using social behavior of beetles to establish a computational model for operational management. IEEE Transactions on Computational Social Systems, 7(2), pp.492-502.

Langert, B., 2019. The Battle To Do Good: Inside McDonald’s Sustainability Journey. Emerald Group Publishing.

Nadolny, A. and Ryan, S., 2015. McUniversities revisited: a comparison of university and McDonald's casual employee experiences in Australia. Studies in Higher Education, 40(1), pp.142-157.

Osei-Kyei, R. and Chan, A.P., 2017. Perceptions of stakeholders on the critical success factors for operational management of public-private partnership projects. Facilities.

Panwar, D. and Patra, S., 2017. Localization in Fast Food industry: A case study on McDonald’s strategy in India. Journal of Arts, Science & Commerce, 8(1), pp.70-74.

Puzakova, M., Kwak, H. and Bell, M., 2015. Beyond seeing McDonald's fiesta menu: The role of accent in brand sincerity of ethnic products and brands. Journal of Advertising, 44(3), pp.219-231.

Rajawat, A., Kee, D.M.H., Malik, M.Z.B.A., Yassin, M.A.Q.B.M., Shaffie, M.S.I.B.A., Fuaat, M.H.B., AlDosari, N. and Santoso, M.E.J., 2020. Factors: Responsible for McDonald's Performance. Journal of the Community Development in Asia (JCDA), 3(2), pp.11-17.

Ramos, T.R.P., de Morais, C.S. and Barbosa-Póvoa, A.P., 2018. The smart waste collection routing problem: Alternative operational management approaches. Expert Systems with Applications, 103, pp.146-158.

Ruparathna, R., Hewage, K. and Sadiq, R., 2017. Developing a level of service (LOS) index for operational management of public buildings. Sustainable cities and society, 34, pp.159-173.

Tien, N.H., 2019. Customization and Standardization of the Business Strategy of Foreign Enterprises in Vietnam–the McDonald’s Case and the Fast Food Sector.“. International Journal of Research in Marketing Management and Sales, 1(2), pp.44-50.

Watson, J.L. ed., 2020. Golden arches east: McDonald's in East Asia. Stanford University Press.

Yamin, M. and Alharthi, S., 2020. Measuring impact of healthcare information systems in administration and operational management. International Journal of Information Technology, 12(3), pp.767-774.

Yan, Y., 2020. 1. McDonald's in Beijing: The Localization of Americana. In Golden arches east (pp. 39-76). Stanford University Press.

Yulianti, N.M.D.R., 2020. Pengaruh Brand Image, Green Marketing Strategy, Dan Emotional Desire TerhadapKeputusanPembelianProdukMcdonald’s. JurnalIlmiahManajemendanBisnis, 5(1), pp.70-80.

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Report on McDonald’s strategies

Get online help from our masters and phd qualified experts, mcdonald’s analysis on the design and strategies within operations, executive summary.

This report will present an analysis on the design and strategies within Operations using McDonald’s as the key organization in focus. Starting off it will elaborate on the main stages and determinants of Operations that form its design and structure. Then it will go on to explore McDonald’s Operation design and strategies and how it helped the company reach productivity and efficiency goals. It will then move on to discuss McDonald’s adoption of Operation Research and what implications it had for the firm regarding growth. This report will then go on to do an analysis on McDonalds operation design and explore issues such as trade off and how they are important in the context on strategic decision making. Lastly, this report will try an emphasize the importance of continuously improving these operation designs and in doing so will provide recommendations on how an efficient allocation of resources can be ensured. 

Introduction

This report will explore the arena of Operations Management and its design, along with evaluating its importance, impact and future implications. The organization that will be used to carry out this analysis is McDonalds Cooperation, as it will serve as the center-point through which this report will critically evaluate the impact of operations design. 

Operations Strategy can be defined as a system of actions and decisions that form the basis of the long-term vision, mission and objectives of these operations and how these impact an organization’s strategy and planning (Slack & Lewis, 2017, as cited by Slack & Brandon-Jones, 2018). The importance of this operations strategy can be evaluated by how successfully they lead to advantages for an organization in the areas of sales and supply of their products (Slack & Brandon-Jones, 2018).

The determinants of Operations Strategy and Design 

This section will elaborate what Operation Strategy constitutes of and what are the determinants that are important in understanding the concept.

Four Stages of the Operations Model

       Hayes and Wheelwright describe the four stages of the Operations Model. Stage 1 deals with correcting and working on the worst problems. Stage 2 involves the adoption and implementation of the best mode of practice. Stage 3 requires the linking of operations with the required strategy and lastly, Stage 4 focuses on operational advantages. With the help of these four stages both the impact of strategies and capabilities of the operations are bolstered. (Hayes & Wheelwright, 1984, cited by Slack & Brandon-Jones, 2018).  

Five Operations Performance Objectives 

While talking about the determinants of operational performance, it is important we talk about the five performance objectives paramount to operations. These are quality, dependability, speed, flexibility and cost. These become the foundation of operational management as the element of trade off comes in, when an organization chooses between which objective to focus as per their needs. It is also really important for an organization to understand how to apply these objectives as they determine the performance of these operation strategies. (Slack & Brandon-Jones, 2018).

McDonald’s Operation Design and Strategies

Main determinants of McDonald’s Operation Design

McDonald’s is one of the biggest multinational food chains in the world and is always in the spotlight for their management and operation structures catering to such a huge customer base all over the world. An article highlights ten important decision areas McDonald focuses on under operations management, which are, design of their goods and services, quality of management, process and capacity design aimed at efficiency, location with maximum market reach, layout and space design, human resources and training, supply chain diversification, inventory management aimed at minimizing costs, scheduling addressing fluctuations in demand and maintenance (Gregory, 2017). By continuously focusing on and adopting these strategies, McDonald’s has not only achieved increased productivity, but made sure that effectiveness and efficiency are maintained at each operational level. These clear-cut strategies also link with the five key performance objectives we touched on in the previous section, and thus makes sure that strategies align with the targets and goals of the organization.

McDonald’s and Operations Research

In 2004, the idea of operations research was introduced and adopted by Ken Koziol at McDonalds, as recognizing the company’s major issues regarding operations and identifying the problems in an efficient manner, in order to achieve progress at a restaurant level (Cramer, 2009). The article also points out how this enabled the company to carry out rigorous experimentations and decision analysis, as an employee stated that they were not only able to increase their value through innovation but also managed to reduce their overall cycle time, which allowed them to conduct 50,000 experiments(Cramer, 2009). This adds to the list of ways McDonald’s has enhanced operational management, as it taps into the field of research to find more efficient ways to implement these operation strategies. This approach also aligns with the four stages of operations identified by Hayes and Wheelwright and thus the impact of these strategies, as defined earlier, are enhanced.

Critical Evaluation

As assessed before, McDonald’s has not only been able to use these ten aforementioned operation strategies in enhancing productivity and effectiveness but also used intensive research regarding these operations to make them more efficient and up to date. Having said that, one important thing to consider while evaluating these strategies is Trade off and how there exists an opportunity cost when choosing between operational decisions in order to improve existing systems. There is a well-known tradeoff between variety and cost efficiency.

Cost efficiency

The diagram illustrates this tradeoff, as for any level of variety there exists a cost-efficient level of operation which is optimal. So, if McDonald’s decides to increase their variety of burgers, their costs could increase but this efficiency frontier shows us that point (B2) which illustrates the best company can do in terms of cost for a given level of variety (Slack & Brandon-Jones, 2018). In doing so, McDonald’s or any other company can efficiently allocate their resources and put them to the best of their use.

Conclusion and Recommendations 

As mentioned above, successful operation management design not only requires a clear and connected process aimed at enhancing productivity, but also steps to make sure the strategies have long lasting impacts. An important concept in regards to this is Sustainable Operation Management (SOM), which is defined in a paper as designs, strategies, techniques and policies, pertaining to operations, that push for both environmental and economic goals (Gunasekaran & Irani, 2014). In talking about the importance of SOM, the paper states that researchers acknowledged the significance of SOM as a means to achieve cost-effectiveness and allow supply chains to cater to the needs of the consumers, by being more responsive and minimizing cost, along with ensuring resources for the upcoming generations (Gunasekaran & Irani, 2014). This will ensure that operation processes optimize on their strategies and adopt more greener ones, thereby reducing both wastage and minimizing environmental damage.

Cramer, M., 2009. The Emerging Role of Operations Research at McDonald’s.  OR/MS TODAY .

Gregory, Lawrence. 2017, McDonald’s Operations Management, 10 Decisions, Productivity, Paramore Institute

Gunasekaran, A. & Irani, Z., 2014. Sustainable Operations Management: design, modelling and analysis.  Journal of the Operational Research Society: Special Issue: Sustainable Operations Management: Design Modelling and Analysis , 65(6), pp.801–805.

Slack, N. and Brandon-Jones, A., 2018.  Operations and process management: principles and practice for strategic impact . Pearson UK.

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Los Angeles, CA – Ronald McDonald House Charities is the latest target of Moscow’s campaign of investigations into the Russian operations of global fast food giant McDonald’s.

Russian authorities are reportedly preparing to level tax evasion and money laundering charges against the charity, which operates a sports facility for physically and mentally disabled children in Moscow, and a residential facility near a children’s hospital in Kazan, 450 miles east of Moscow.

In an interview with the Washington Post , Russian Duma legislator Andrei Krutov said, “They use donations from ordinary Russians, so that is why we want to know how this money is spent. I am talking only about financial aspects of their activities, and technical questions about their work. We do not want you to think that we have political reasons for doing this.”

In August, Russia’s consumer protection agency ordered four of the company’s largest restaurants to suspend operations over a host of alleged hygiene violations and shortly afterwards added another five to the list.

Since then, 12 restaurant in Russia have been closed for alleged “sanitary reasons” while more than 200 unscheduled hygiene and safety “inspections” have been carried out.

Last week, nine more McDonald’s outlets – four in Moscow, two in Yekaterinburg, two in Volgograd and one in Sochi – were “temporarily” shut-down.

The latest move subjects more than half the McDonald’s franchises in Russia to government scrutiny.

McDonald’s Russia issued a statement on its website over the weekend saying that, “Right now, more than 200 probes have been initiated,” adding that a Russian court had extended the government’s temporary closure of the initial nine restaurants and added that it would appeal against the decision.

The company, which opened its first restaurant in Russia in 1990, has 450 restaurants across the country, more than 100 of which are in Moscow and the surrounding region. More than 60 are in St Petersburg and the surrounding region, the country’s second big metropolitan area.

Moscow’s investigation campaign is seen in the West as a slap-back at the economic and financial sanctions and executive orders put in place earlier this year by the US in response to Russia’s seizure of the Crimea and continued incursions into neighboring Ukraine.

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