Analysis

Business Processes

McDonald's has unique processes that they use throughout their company but this particular McDonald's is an exception to some processes. Because they are located within a Wal-mart, processes that concern their inventory have to flexible enough to accommodate the structure of the restaurant.

Supplier Relationship

McDonald's uses distribution centers to get their orders to their restaurants. McDonald's has a list of certified vendors that can distribute items such as bread, burger patties, ect. to each restaurant through the distribution centers. All shipments are time sensitive. McDonald's prides itself on the quality of its food and has the right to refuse a shipment if the goods don't meet McDonald's level of expectations.
The time allotted for the shipments ranges from 2-3 hours.

Storage space for inventory is limited within this McDonald's. This requires more frequent orders of a smaller lot size to accommodate for the smaller space. typically McDonald's will order twice a week. More if need be.
 

Order Fulfillment

• Step One: The Greeting
•  Smile and Greet the customer with a pleasant tone and enthusiastic smile
• Step Two: Order Taking
• Take the Order Within 20 to 25 Seconds. 
• Don't Interrupt the Customer
• Allow them to complete the entire order.
• Listen and wait until they are done
• Determine Order Accuracy
• Suggestive Sell
• Clarify the Order
• Step  Three: Receiving Payment/Positioning Customer
• State the amount and type of payment.
•  Step Four: Assembling the Order
• Every product has its place on the assembly line and it must be assembled appropriately 

• Step Five: Presenting
• Verify the order is correct on the receipt and serve the order. 

Inventory Purchasing:

McDonald's follows periodic system of inventory management, where materials are ordered on a bi-weekly basis based on usage trends and historical sales data. This system saves time by eliminating the need to manually create an order and partially eliminates user error by automating the process and using previous sales data to produce more accurate numbers. However, the system is not perfect and requires a user to look over order data to ensure no unnecessary items are ordered, which is sometimes the case.

Vendors who provide inventory to McDonald's stores are strictly controlled by headquarters, and are based on quality, price and reliability. Individual branches do not have communication with vendors, and have to rely on the decisions made by the company.

Due to size of the company, McDonalds is able to negotiate better prices and terms from their suppliers and do not hold contracts, making it simple for them to stop dealings with a supplier who does not meet quality or price standards.

Managing Inventory:

In dealing with available inventory, it is moved in shifts depending on necessity, shelf life, and storage method. Items needed to be defrosted, are taken out however many hours as needed before the time they will be used. With cooking, each item has an average quantity consumed, which is monitored by both time and day of the week, and are cooked accordingly. For example, 10lbs of fries for the 2-3pm slot on Wednesdays. Dealing with orders, items are provided to customers as soon as they have ordered it, with minimal delay between placing the order and getting it in hand.


 McDonald's doesn’t begin to assemble menu items until they receive a customer order, which leads to

Improved quality of food: The burgers are made fresh for the customer and thus provide maximum satisfaction. There is no chance of offering stale food to the customer. Higher customer satisfaction leads to customer retention and increased sales.

Better costs: The holding costs for the raw material like bread, beef, cheese, chicken is fairly high because of their spoilage costs. Under the old system, McDonald's used to maintain a high inventory leading to faster orders but this resulted in a lot of unsold food because of the low shelf life of beef etc. after being cooked. 

Insuring Quality

During our last interview with the owner of McDonalds David Singelyn, We asked
him " What is key to ensuring that the food provides quality?" He responded

1. 
   

1. Food safety

2.VCMS/Verticle Holding cabinet

What is food safety?
Food safety is a book consisting of four pages which is done on a daily basis, where a series of temperatures are taken twice a day for breakfast and lunch time. Not only is the temperature of
the cooked food taken but of its storage area as well, which are the freezers and
refrigerators because proper storage is just as important.
VCMS?
The VCMS is a chart that is used daily to determine the amount of food to be cooked and held in the vertical holding cabinet that McDonald's uses to minimize food waste and keep their food as hot and fresh as possible. Each product has a specific holding time and the trays are kept vertically from each other usually two trays per item. Once the item is finished the tray is removed and the timer is turned off until that item is replenished the timers are again to be turned on. Once the food expires the food is then thrown in the "food waste" bin. McDonald's goes with a theory that when you cook less you also waste less, and since you are cooking as one tray runs out the other tray is ready, the food is also being served hot.

WHAT ABOUT SALES?

How does McDonald's measure weather or not sales are met?
Meeting our targets consists of projections of recent weeks and on a daily basis we must print out target sheets to measure sandwich counts (KVS)and (FRONT COUNTER)customers taken.