suppy chain 1
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Mc DONALDSMc DONALDSSUPPLYSUPPLY
CHAINCHAIN
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The McDonald¶s System The McDonald¶s System ± ± the World¶s Best QSRthe World¶s Best QSR
experienceexperience
World Market Leader World Market Leader in the QSR area (Quick Servicein the QSR area (Quick Service
Restaurant)Restaurant)
Franchise System (72%)Franchise System (72%)
SystemSystem employeesemployees: 1: 1.6.6 mmillionillion
CustomersCustomers Per Per DayDay: 4: 477 mmillionillion
Corporate Strategy:Corporate Strategy:
QSC&V:QSC&V: QQuality,uality, SService,ervice, CCleanliness andleanliness and VValuealue
Ray Kroc: ³None of us is as good as all of us´Ray Kroc: ³None of us is as good as all of us´
Plan To WinPlan To Win --> Successful business revitalization> Successful business revitalization
Growth by getting better Growth by getting better
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�� Between 1992 and 1996, when McDonald's opened its first outlet inBetween 1992 and 1996, when McDonald's opened its first outlet in
India, it worked fr enetically to put the perf ect supply chain in place. ItIndia, it worked fr enetically to put the perf ect supply chain in place. It
trained the local far mers to produce lettuces or potatoes totrained the local far mers to produce lettuces or potatoes to
specifications and worked with a vendor to get the perf ect cold chainspecifications and worked with a vendor to get the perf ect cold chain
in place. And explained to the suppliers pr ecisely why only one in place. And explained to the suppliers pr ecisely why only one particular size of peas was acceptable These efforts paid off in the particular size of peas was acceptable These efforts paid off in the
for m of joint ventur es between McDonald's India (a 100% whollyfor m of joint ventur es between McDonald's India (a 100% wholly--
owned subsidiary of McDonald's USA) and Hardcastle Restaurantsowned subsidiary of McDonald's USA) and Hardcastle Restaurants
Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant (New Delhi). Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant (New Delhi).
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COLD CHAIN PartnersCOLD CHAIN Partners
1.1. Dynamix Dairy Industries (Supplier of Cheese)Dynamix Dairy Industries (Supplier of Cheese)
2.2. Trikaya Agriculture (Supplier of Iceberg Lettuce)Trikaya Agriculture (Supplier of Iceberg Lettuce)
3.3. Vista Processed Foods Pvt. Ltd. (Supplier of Chicken andVista Processed Foods Pvt. Ltd. (Supplier of Chicken and
Vegetable range of products including Fruit Pies)Vegetable range of products including Fruit Pies)
4.4. Radhakrishna Foodland (Distribution Centres for Delhi andRadhakrishna Foodland (Distribution Centres for Delhi and
Mumbai)Mumbai)
5.5. Amrit Food (Supplier of long life UHT Milk and Milk ProductsAmrit Food (Supplier of long life UHT Milk and Milk Products
for Frozen Desserts)for Frozen Desserts)
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1.1. Dynamix Dairy Industries (Supplier of Cheese)Dynamix Dairy Industries (Supplier of Cheese)
�� Fully automatic international standard processing facility. Fully automatic international standard processing facility.
�� Capability to convert milk into cheese, butter/ghee, skimmed milkCapability to convert milk into cheese, butter/ghee, skimmed milk
powder, lactose, casein & whey protein and humanized baby foodpowder, lactose, casein & whey protein and humanized baby food
�� Stringent quality control measur es and continuous Research &Stringent quality control measur es and continuous Research &
DevelopmentDevelopment
Each batch is mixed in one large stainless steel cooler and chilledEach batch is mixed in one large stainless steel cooler and chilled
immediately to two degr ees Celsius to stop bacterial growth andimmediately to two degr ees Celsius to stop bacterial growth and
pr eserve fr eshness. From this point onwards, until just befor e the pr eserve fr eshness. From this point onwards, until just befor e the
burger is actually served in a McDonald¶s r estaurant hundr eds of burger is actually served in a McDonald¶s r estaurant hundr eds of
kilometers away, the temperatur e is never allowed to incr ease. kilometers away, the temperatur e is never allowed to incr ease.
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2. Trikaya Agricultur e (Supplier of Iceberg Lettuce)2. Trikaya Agricultur e (Supplier of Iceberg Lettuce)
�� A specialized nursery with a team of agricultural experts A specialized nursery with a team of agricultural experts
�� Drip and sprinkler irrigation in raised far m beds with f ertilizer mixingDrip and sprinkler irrigation in raised far m beds with f ertilizer mixing
plant.plant.
�� Pr ePr e--cooling room and a large cold room for post harvest handling. cooling room and a large cold room for post harvest handling.
�� Refrigerated truck for transportation.Refrigerated truck for transportation.
�� Vegetables ar e moved into the pr eVegetables ar e moved into the pr e--cooling room within half an hour cooling room within half an hour
of harvesting. of harvesting.
�� The pr eThe pr e--cooling room ensur es rapid vacuum cooling to 2º C withincooling room ensur es rapid vacuum cooling to 2º C within
90 minutes. 90 minutes.
�� The pack house, pr eThe pack house, pr e--cooling and cold room ar e located at the far mscooling and cold room ar e located at the far ms
itself, ensuring no delay between harvesting, pr eitself, ensuring no delay between harvesting, pr e--cooling, packagingcooling, packaging
and cold storageand cold storage
��
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3) Vista Processed Foods Pvt. Ltd. 3) Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and(Supplier of Chicken and
Vegetable range of products including Fruit Pies)Vegetable range of products including Fruit Pies)
A joint ventur e with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and A joint ventur e with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and
Vista Processed Foods Pvt. Ltd., produces a range of frozen chicken andVista Processed Foods Pvt. Ltd., produces a range of frozen chicken and
vegetable foods. A world class infrastructur e at their plant at Taloja,vegetable foods. A world class infrastructur e at their plant at Taloja,
Maharashtra, has:Maharashtra, has:
The technology includes hiThe technology includes hi--tech r efrigeration plants for manufactur e of frozentech r efrigeration plants for manufactur e of frozen
food at temperatur es as low asfood at temperatur es as low as -- 3535°° C. This is vital to ensur e that the frozenC. This is vital to ensur e that the frozen
food r etains it fr eshness for a long time and the 'cold chain' is maintained. food r etains it fr eshness for a long time and the 'cold chain' is maintained.
The frozen product is immediately moved to cold storage roomsThe frozen product is immediately moved to cold storage rooms. .
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McDonald¶s Supply Chain ChallengesMcDonald¶s Supply Chain Challenges Even stronger focus on freshness and qualityEven stronger focus on freshness and quality
OnOn--going product innovationsgoing product innovations
Strong customer demand fluctuationsStrong customer demand fluctuations
based on promotionsbased on promotions
Order Order-- and inventory managementand inventory management
restaurantrestaurant ± ± DCDC ± ± supplier supplier --
raw material supplier raw material supplier
Bull Whip effectBull Whip effect
Change Management in a deChange Management in a de--centralized structurecentralized structure
The McDonald¶s Supply ChainThe McDonald¶s Supply Chain
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Future orientated strategiesFuture orientated strategies
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Supply Chain IntegrationSupply Chain Integration
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´́OneOne--StopStop--Shopping´ Lean Logistics SolutionShopping´ Lean Logistics Solution
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ResultsResults
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Achievements: Yield Improvement
Gross Margin improvement > 0.15%
Raw Waste Reduced
Reduced by 30%
Average Inventory Reduced
Reduced by 30%
Store Transfers Halved
Order Time Halved
Goals: Yield Improvement
0.15% increase in Gross Margin
Raw Waste Reduction
Not included in Business Case
Inventory Reduction
15% decrease on the Inventory Level
Store Transfers Reduction
Simplification of Order Process
ResultsResults
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Thank youThank you
very muchvery muchfor your for your
kindkindattentionattention