McDonald’s Supply Chain
McDonald’s Supply Chain
Taking a bite from a big mac is undoubtedly mind-blowing due to its staggering and fascinating taste. McDonald’s is one of the most prominent food restaurants, serving a significant number of customers worldwide, approximately 1 % of the world’s population (Khandelwal, 2020). Since its inception, the company’s success has been impressive. The secret behind these good results lies in its quality products and efficient services to offer a compelling customer experience (Bailey, 2020). In addition, the modern infrastructure, improved customer policies, social responsibility, experienced management, and effective supply chain management have given the food chain a competitive advantage in the market. The organization boasts of its complex supply chain management that requires its suppliers to meet and maintain high standards set by the company.
Supply Chain entails all activities that enable an organization to produce and deliver products to the consumer. In most restaurants, the supply chain depends on the relationship between the owner and suppliers to produce menu items. McDonald’s supply chain typically involves the following:
Suppliers – The food chain depends on an outsourced model, and suppliers are divided into two categories. The indirect suppliers supply raw materials to direct suppliers, and the latter produce food for the company (Khandelwal, 2020). The company values its suppliers and regards them with the highest standards possible, and therefore demands an equal measure from them to deliver consistent, high-quality raw materials (aboutmcdonalds.com). Some of the leading direct suppliers include Lopez foods, Keystone foods, and Hildebrandt farms that supply beef, chicken, and milk, respectively (McDonald’s). The company also source raw materials such as potatoes, apple, lettuce directly from the local farmers.
Intermediaries – The company does not involve intermediaries to buy or market its products. Instead, McDonald’s conducts promotional activities while the distribution is done by independent restaurants worldwide. The products are distributed by special vans equipped with temperature controllers (Khandelwal, 2020).
Customers – The food chain serves millions of customers every day. Serving vast consumers requires consistency, from acquiring ingredients to processing the final product (Khandelwal, 2020). The chain targets all types of customers, which is why they process different kinds of foods. McDonald’s understands the importance of its customers and always puts remarkable efforts to ensure their satisfaction.
Food processing typically involves the selection of quality ingredients, preparation, packing and labeling, storage, and distributing to other restaurants. McDonald’s ensures that the food manufacturing process complies with stringent food quality and safety standards. The management monitors every procedure to ensure that the food produced is hygienic, top quality, and tasty (aboutmcdonalds.com). The safety of the products remains a critical aspect of the company’s operations. It has robust procedures to help suppliers track raw materials in the supply chain. For instance, they can trace milkshakes back to the Hildebrandt farms where they were produced. The food chain depends on essential ingredients such as meat, vegetables, milk, coffee, cheese, buns, and salads to prepare its food.
The pricing system ensures that the food chain secures a worthwhile long-term financial goal for the operators and the other independent restaurants. The company provides price stability and revises its pricing policy after one to three years, based on the ingredients’ costs and the region. McDonald’s has created a win-win business system to maintain a long-term relationship with its suppliers and customers (Khandelwal, 2020). The success of McDonald’s is attributed to its continued innovative approach geared towards achieving maximum customer satisfaction. The easily accessible, affordable, and high-quality burgers, meat, desserts, milkshakes, salads, and French fries have made eating a kind of inevitable habit as people rush to accomplish their daily activities.
Aboutmcdonalds.com. (n.d.). Food quality & sourcing. https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/food-quality-and-sourcing.html
Bailey, R. (2020, March 30). How has McDonald’s been so successful for so long? The Best Franchise Opportunities & Franchises for Sale | Franchise Direct. https://www.franchisedirect.com/information/markettrendsfactsaboutfranchising/thesuccessofmcdonalds/8/1111/
Khandelwal, R. (2020, July 26). McDonald’s supply chain: A must-know for investors. Market Realist. https://marketrealist.com/2019/11/must-know-mcdonalds-supply-chain-2/
McDonald’s. (n.d.). McDonald’s food suppliers & food sources | McDonald’s. McDonald’s: Burgers, Fries & More. Quality Ingredients. /about-our-food/meet-our-suppliers.html”>https://www.mcdonalds.com/us/en-us/about-our-food/meet-our-suppliers.html