McDonald's Supply Chain Management - Pakistan

2. Presented to: Mr. Muhammad Taha Dossal
Presented by:
Maria Farooq
Maria Mansoor Ali
Mariya Crystal
Bilal
Majid Mazhar

3. McDonald’s History
• McDonald's originally started as a small hamburger stand in
Bernardino, California, owned by Richard and Maurice
McDonald in 1945.
• Re-opened in December 1948 as a self-service drive-in
restaurant.
• In 1950s Ray Kroc, a Multimixer Salesman, signs a franchise
agreement with Richard and Maurice McDonald in the name of
McDonald Corporation at Illinois in 1955.
After few years in 1961, Ray purchased the ownership
from McDonald brothers.
Today 34,000 McDonald's restaurants serving 69 million
customers each day in over 119 countries.

4. McDonald’s Pakistan History
• McDonald’s Pakistan is part of the Lakson Group of Companies, a leading
business house in Pakistan.
• McDonald’s first restaurant opened its door to the people of Pakistan in
September 1998 in Lahore and a week later in Karachi .
• Today we have 27 restaurants in 8 major cities of Pakistan.
• 11 in Karachi
• 10 in Lahore
• 1 in Hyderabad, Faisalabad,, Sialkot, Islamabad & Rawalpindi & Kala
Shah Kaku).

5. McDonald’s Statement
Vision Statement
• To be the best and leading fast food
provider around the globe.
Mission Statement
McDonald's mission is to be our
customers' favorite place and way
to eat with inspired people who
delight each customer with
unmatched
• Quality
• Service
• Cleanliness
• Value

6. McDonald’s Values
• We place the customer experience at the core of all we do.
• We are committed to our people – Employee development.
• We believe in the McDonald’s System - Owner/Operators, Suppliers and
Company Employees, is our foundation.
• We operate our business ethically.
• We give back to our communities – Charities.
• We grow our business profitably.
• We strive continually to improve.

7. McDonalds‘ Products

8. McDonald’s Target Market
• McDonald’s wants to attract as many customers as it can. But the main
targets of the efforts by McDonald’s are following groups:
• Parent visit McDonald’s to give the children a treat.
• Children want to visit McDonald’s as it is a fun place to eat.
• A business customer visits McDonald’s during the day as service is quick,
the food tastes great and can be eaten in the car without affecting a busy
work schedule.
• Teenagers are attracted by the Saver Menu which is affordable, and the
internet access.

9. Supply Chain Management
in Fast Food Sector
• There are two key components to the fast food industry supply chain;
1. Raw materials are essential to the ultimate product - value added
component.
2. Quick, convenient, and quality food.
• The most important aspect of the industry supply chain is that it is driven
by the consumer.
• The consumer has what seems to be an endless amount of fast food chains
to choose from every day.
• McDonalds' main goal of their marketing is to make the consumer drive
that extra two blocks past the competitor to eat at their chain.

10. McDonald’s Supply Chain
Management
• Supply chain is extensive and
complex.
• Efficient, safe and quality food at an
affordable price.
• Large number of direct suppliers –
companies that make or deliver
final products to their restaurants.
• Large number of indirect suppliers
– companies and farms that grow or
process the ingredients that are
eventually delivered to their direct
suppliers.

11. McDonald’s E-Procurement
• McDonalds E-Procurement System is basically a main reason for their
successful supply chain management.
• It is so efficient that it provides the backbone not only to all the logistics but
the whole McDonalds supply chain management.
• E-MAC Digital:
(Internet procurement site designed for McDonald's Corporation's 34,000
franchises)
• E-MAC Digital Company is E-Procurement website which is jointly owned
by McDonalds and Accel-KKR Internet Co.
• It is a procurement hub launched in 2001 allow all of McDonald's franchises
across the globe to buy everything needed to run their restaurants.

12. McDonald’s E-Procurement
• In the process of procuring a product, a
typical McDonald’s franchise restaurant
places an order through E-MAC digital
website.
• The order is sent to the suppliers. Suppliers
order is processed and managed by the
logistics.
• The logistics sends the order of the products
to the franchise restaurants. It is the
responsibility of the E-MAC and logistics that
the products are sent to the restaurant.
• All the above, steps are handled and executed
by the E-MAC digital.

13. McDonald’s E-Procurement
Place Orders Supply Received
E-MAC Digital
Global
Franchises
Suppliers Logistics

14. McDonald’s E-Procurement
Major
Supplier
Small
Suppliers
E-MAC Digital

15. McDonald’s Logistics
Inbound
logistics
Operations
Outbound
logistics

16. McDonald’s Logistics
INBOUND LOGISTICS
• It is the movement of materials from suppliers and vendors into production processes
and storage facilities.
• Based on the demand forecast, Manager orders the Venus Distributors on daily basis.
• Venus Distributors stores all the raw materials, in its own cold stores and delivers only
one-day material to the restaurant.
• Venus Pakistan established its dedicated McDonalds Logistics Operations in 1997.
• It also received the DQMP (Distribution, Quality, and Management Process)
Certification from McDonalds USAAudit Team.
• Some branch has its own cold storage facility, which is used to store the daily-procured
raw material.

17. McDonald’s Logistics
INBOUND LOGISTICS
• There are only two products buns and Cokes, which are sent directly
to the restaurants.
• Venus Pakistan has full-fledged facilities to pack locally
manufactured products in sachets such as sugar, tomato ketchup.

18. McDonald’s Logistics
• The transportation of McDonald’s has
been completely outsourced and since
80% is in refrigerated truck movement.
• Multi-temperature and single
temperature trucks transport the fast
food swiftly to the McDonald’s
restaurants across the country.
• The company has both cold and dry
storage facilities with capability to store
products up to -22º C as well as delivery
trucks to transport products at
temperatures ranging from room
temperature to frozen state.
• The specially designed trucks
maintained the temperature in the
storage chamber throughout the journey.

19. McDonald’s Logistics
COLD CHAIN LOGISTICS
• A cold chain is a temperature-controlled supply chain.
• It is used help extend and ensure the shelf life of products such as fresh
agricultural produce, processed food.
McDonalds’ entire network supply-chain consists of movement
of goods through a cold chain
An interesting and innovative feature of this cold chain is that the same truck
can carry products at different temperatures
ranging from:
• Frozen products at -18C to -25C
• Chilled products from 1C-4C
• Dry products at ambient temperatures

20. McDonald’s Operation
• Cooking procedure and recipe is documented so that the products
become standardized and customers get the similar taste, quantity and
quality to whichever restaurant they go.
• It is the policy of McDonald's to throw away any burger if they remain
on heated grill for 15 minutes.
• All the utensils and equipment used in cooking are washed at the closing
of restaurant every night, with anti-microbial fluid. Kitchen, floor,
washrooms and all other restaurant areas are cleaned after every half an
hour.

21. McDonald’s Logistics
OUTBOUND LOGISTICS
• Outbound logistics is the process related to the storage and movement
of products from the end of the production line to the users end.
• When customers enter the restaurant, they go to the counter, give their
order, which they are served within a single minute.

22. McDonald’s Distribution
McDonalds Distribution systems McDonald uses three types of distribution
strategy;
• Franchising
• Licensing
• Joint ventures

23. McDonald’s Forecasting
McDonald’s uses qualitative forecasting methods to help aid in predicting
the future growth of the organization;
• Market Research – customer focus and information gathering from
customer and employees (through surveys).
• Expert Opinions and judgment – Delphi Technique.

24. McDonald's Competitors
• Subway
• Kentucky Fried Chicken (KFC)
• Mr. Burger
• Burger King

25. Factors that Influence
Competition
Price Quality
Flavor Outlets

26. McDonald’s Market Share
Market Share
McDonalds
KFC
Subway
Mr. Burger
Burger King
Others
25%
15%
10%
5%
15%
30%

27. McDonald’s SWOT Analysis
•Political instability.
•Economical instability.
•Health conscious customers.
•Innovative advertisements.
•Offer organic food line.
•Expand menu to cater all individuals.
•Gain attention by sponsoring adult or
children programs.
•Introduce outlets to different locations.
•Lack of innovative advertisement.
•High setup cost.
•Offers processed and inorganic food line.
•Extensive and costly training program.
•Brand Name.
•Research and Development.
•Loyal Customers.
•Diversified Culture.
Strength Weakness
ThreatsOpportunities

28. THANK YOU