Table of Contents
Sustainable Supply Chain Vision
Inventory Monitoring Graphs
McDonald’s is made up of a complex network of direct and indirect vendors. This complex system is managed by direct suppliers that share their vision and values for sustainable supply. The standards they set for them are clear in terms of quality, sustainability, safety and efficiency. They expect the suppliers to share these standards with their customers and work together to address sustainability challenges in the industry and improve continuous performance. McDonald’s, as well as their suppliers, are focused on three key areas: ethics, economics, and the environment. The supply chain areas that McDonald’s focuses on include:
Sustainable Land Management commitment
The well-being of animals
Supplier Workplace Accountability
Sustainable Supply Chain VisionThey imagine a chain of suppliers that can profitably produce high-quality, reliable products, without interruptions in supply. They also leverage their position as leaders to create net benefits by improving ethics, environmental and economic outcomes.
They believe in ethics – they want to purchase from suppliers that adhere to policies that promote the safety of employees and ensure animal welfare.
Environment – The goal is to influence the materials used in products and their design and manufacture. They also want to ensure that they are distributed and used responsibly.
Economic – They see themselves delivering affordable foods, engaging in fair trade practices, limiting agricultural disease spread, and having a positive impact on the communities where they operate. The vision they have and the responsibilities they hold are seen holistically. They consider the importance of food quality, safety and cost as well as their ethical, economic and environmental responsibilities when making sourcing decisions. They have shown global progress in sustainability of beef and beans.
McDonalds ForecastingForecasting at McDonald A forecast is an estimate of future sales of finished products. The forecasts are calculated based on the following factors: * Historic product mix information from each store for the past two-year period. The dates are for specific events like national holidays and promotions. Road closures, local events or promotions.
Causal Factors McDonald’s Supply Planners incorporate a number of causal factors into their forecasts to be able to accurately predict the future demand of each restaurant. In the case of a BOGOF promotion, Big Mac sales may increase. These data are used by the planners to forecast all stores who participated in this promotion. Models can also analyze the impact of weather on demand for certain products, like McFlurrys or salads. Forecasts are then more accurate, reducing costs and increasing customer satisfaction. McDonald’s uses qualitative forecasting expert opinion and market research
Qualitative forecastingMethods for predicting future growth. McDonald’s relies heavily, to make decisions, on the information provided by customers, employees and others in the industry. McDonald’s emphasizes the use of expert judgment as part of its qualitative approach. Expert judgement is essential because it offers valuable insights into the various aspects of a company. Delphi technique is used when seeking expert opinion. McDonald’s gathers expert opinions to make predictions about future behaviors using the Delphi method.
Stock Control ChartsA chart that shows the balance between new orders and sales. The system depends on the figures of expected sales. If burger sales are leaving the system, stocks of beef patties must be added. Manugistics forecasts each restaurant based on the product mix over the past two years. Time series analysis is used. The planner applies a causal (blue blocks in this example) factor to the data series for both the start and the end dates of the promotion. The graph is then able to produce a forecast by using complex calculations.
Data EntryAny system’s performance is dependent on the quality of data entered. McDonald’s Restaurant Managers are responsible for entering accurate data into their system. Restaurant Managers keep track, for example of opening and closed stocks, every day. Other items are counted weekly. The store’s computer system will alert managers to any deviations in stock counts from the last count. A manager might have forgotten to count a carton of organic milk earlier in his shift.
Buffer StockRestaurants maintain a small stock of buffers. It is a small amount of extra stock that restaurants hold to cover unexpectedly higher demand. This is the level at which you order more goods.
OrderingMcDonald’s managers use an easy web-based tool called WebLog to view, edit and modify store Order Proposals. WebLog sends out a daily order to the manager for him or her to analyse and accept if required. Weblog allows central planners and managers to view what has been ordered, the stock levels at any given time and what is to be delivered. In the past managers had to manually check for shortages in their deliveries and enter each item that they received. Now, the system automatically creates a note of delivery that includes the quantities and descriptions. Managers only need to click on ‘confirmation’ in Weblog. This process is cost-effective and saves a lot of time.