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Recommended: Mcdonald's operation strategy

The McDonald's Corporation, headquartered in the United States, is the world's largest chain of quick service fast food restaurants operating in around 119 countries with a customer base of 68 million. A McDonald's restaurant operates either through a franchisee or the corporation itself and its revenue stream includes rent, royalties and fees or the sales of products respectively.

McDonald's came to India in 1996. McDonald’s India has collaboration with local companies who manage the outlets. Vikram Bakshi, under Connaught Plaza Restaurants Pvt. Ltd (CPRL) manages the outlets in the Northern and Eastern Region through a joint venture, Smita Jatia, under Hardcastle Restaurants Pvt. Ltd., manages in the Western and Southern Region, as a development licensee.

Before coming to India, McDonald’s spent close to 5 years in vendor development so as to get the best menu suited to the needs and fitted to the cultural aspects in India. It also established the “cold chain supply system” across India to maintain the nutrition and freshness of the products. This was in conjunction with their philosophy of QSQV (Quality, Service, Cleanliness and Value) which still works as the primary philosophy through which it operates in India. After ensuring a strong supply chain network it opened its first outlet in Delhi in 1996.

After 10 years of operation, there are 242 McDonald restaurants in India which serves around 5 lakh customers every day. The McDonald’s burger served in India has 9 different ingredients. These are sourced from 35 suppliers across the country. It also ensures Vegetarian and Non- Vegetarian segregation right from the processing and only uses 100 % vegetable oil.

Not only did they establish the cold chain network, McDonald’s...

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...or iceberg lettuce improving from 60% to 80%

Supply Base Diversification:
Rather than having supplies only from one location, McDonald explored varied locations that have ensured supply through the year. Going by the company records, lettuce is now grown in Ooty (Tamil Nadu), Lonavala (Maharashtra) and Solan (Himachal Pradesh). This benefited them a lost since the cost of lettuce remained flat for nearly 4 years.

Improved IT Capabilities
The entire chain of McDonalds delivers on such tight lead time with such high quality products by successfully integrating IT capabilities throughout the chain. Suppliers are using SAP while Distribution Centers manage through RAMCO Marshall ERP with Cobra software. These systems not only assist in day to day functions of the store like tracking sales, but also enable restaurants to schedule staff and send forecast orders to DCs.

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