McDonald’s Supply Chain Management

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Businesses and organizations in the current market do not compete among themselves but rather on supply chain systems. Supply chain management can be defined as the parties and processes involved in a successful product or service delivery to customers (Foerstl, Schleper, & Henke, 2017). It aims at minimizing costs and customer satisfaction through quality products at the right place and time. Businesses are after competitive supply chain teams which can grow, diversify, and develop the company’s functions to quality supply chains. Customers form the most important group of the business contributing to its success. The success of a business depends on the number of customers whose needs have to be satisfied by offering quality products and services. The supply chain systems of the business should ensure positive company-customer relations. Most companies have opted to synchronize supply chain quality management in their companies for high-quality products in their supply chain systems (Foerstl et al., 2017). Thus, the supply chain management system of a company has a great impact on the success of a company.

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McDonald’s is a leading fast-foods company headed in the United States but operating a worldwide market. The company has had great success running over 38,695 restaurants worldwide with approximately 210,000 employees (Mcdonalds.com, 2021). It provides chicken, soft drinks, Hamburgers, pancakes, wraps, salads, French fries, breakfasts, coffee, and desserts as their products. The company’s revenue in 2019 was at US$ 21.076 billion, with an upward trend forecast in the following years. The company’s success led to its high operating income of US$ 9.07 billion and a netting US$ 6.025 billion in 2019 (Mcdonalds.com, 2021). McDonald’s has achieved customer retention due to its ability to offer quality products to its customers in various locations. As such, their customers have maintained the habit of buying from them. Its supply chain management has highly contributed to such great success of the company.

With 38,695 restaurants, McDonald’s requires varieties of ingredients for its products. However, the company does not produce any of the products; thus, they entirely depend on suppliers to meet their requirements. The suppliers thus form a great pillar of McDonald’s success other than employees and the owners. The company has many suppliers, including Tyson Foods, Hildebrandt Farms, 100 Circle Farms, and Lopez Foods Suppliers. They provide the company with meat, bakery products, dairy products, fish, poultry, and farm produce. The company serves approximately 1% of the world’s population (Mcdonalds.com, 2021). The restaurants’ sales are high due to excessive demand, which is evident by 75 hamburgers per second sales rate. The increased demand for the company’s products shows the scale of its operations, which requires various suppliers to meet its requirements.

The numerous McDonald’s suppliers create a complex web of supply chain comprising of both direct and indirect suppliers. The standout between the suppliers and McDonald’s is the efficiency and quality of the supplies made. The company uses direct suppliers in the coordination of purchase and distribution to restaurants. The company’s indirect suppliers include abattoirs and grain mill facilities operators. The company’s distribution centers ensure the purchase and distribution of supplies to restaurants. McDonald’s products are transported by temperature-controlled special vehicles ensuring that all products are transported in ideal conditions (Mcdonalds.com, 2021). The restaurants, which are the McDonalds’ processing facilities, make the end products such as meat patties, burns, and beverages.

McDonald’s runs a sustainable supply chain glued on three goals: environment, economics, and ethics. McDonald’s, together with other stakeholders, works effortlessly to ensure the safety of employees. The company does not tolerate animal cruelty and does an annual audit of suppliers’ slaughterhouses. On the environment, the company works hard on reducing the impact on the climate concerning its restaurants and supply chain. To achieve water protection and forest conservation, McDonald’s links with suppliers in reducing its supply chain’s water footprints. McDonald works closely with its suppliers in sharing, researching, and scaling the best ways of increasing efficiency and productivity for a sustainable economy. McDonald’s Flagship Farmers program works towards highlighting the best ways in which farm produce suppliers can obtain the best. The alignment of the United Nations’ sustainable development goals (SDG) in McDonald’s supply chain promotes environmental sustainability (Mcdonalds.com, 2021). McDonald’s is committed to a supply chain with suppliers and farmers’ livelihoods longevity.

In conclusion, McDonald’s supply chain forms a complex web composed of numerous indirect and direct suppliers. The company has an organized supply chain with distribution centers ensuring steady purchase and supply of ingredients to restaurants. The company works on a sustainable supply chain that ensures economic, environmental, and ethical sustainability. McDonald’s supply chain quality system has confirmed the availability of safe, consistent, and quality products to its restaurants. The company’s strict standards have ensured the suppliers meet the requirements hence serving large number of customers steadily to satisfaction. The organized relationship has ensured the success of the company, with growth evident since its interception. The effective McDonald’s supply chain has led to quality services of the company gaining a large market for its products worldwide.

References

Foerstl, K., Schleper, M., & Henke, M. (2017). Purchasing and supply management: From efficiency to effectiveness in an integrated supply chain. Journal of Purchasing and Supply Management, 23(4), 223-228. doi: 10.1016/j.pursup.2017.08.004.

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McDonald’s Food Suppliers & Food Sources | McDonald’s. (n.d). McDonald’s.

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BusinessEssay. 2022. "McDonald’s Supply Chain Management." July 20, 2022. https://business-essay.com/mcdonalds-supply-chain-management/.

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