McDonald's seeks supply chain changes

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The story of McDonald’s shows the company’s attempts to keep up in a changing manufacturing environment. Transparency and smart sourcing are virtues now and can dictate how businesses modernize. The key is for enterprises to follow the trends set by both consumer preferences and the promise of new technology.

Going horizontal

Supply Chain Dive recently characterized McDonald’s new trajectory as an attempt at the “horizontal” supply chain. This means a system where businesses can look core closely at the relationships between different entities, something which makes a difference when product quality is as important as it is in the food service industry. The article said that McDonald’s has made efforts to disclose its sources, building off of its longstanding presence in the industry.

It’s interesting to note that the company’s new efforts, while a definite response to current expectations, are also connected to its existing approach to supply chains. A Supply Chain 24/7 article looked at what McDonald’s thinks of as “the System,” a setup that distributes the responsibility of success across operators, employees and suppliers evenly.

Item prices also change and can affect the ultimate expense, according to the company’s interest in transparent business. specially as companies change their protocols throughout the years. Clear information and goals factor into the business’ planning for future updates.

As part of a case study on the company’s supply chain activities, Lopez Foods CEO Ed Sanchez described how McDonald’s works with its different partners to find the best outcome.

“The best part of McDonald’s governance is the deep peer-to-peer relationships,” he said “Work takes place seamlessly on the peer-to-peer basis where problems are solved at the lowest level possible. If we have a problem – they get it.”

New changes

For years, McDonald’s has been a dominant player in the fast food space, but some new shifts have put the company in a different context. Some of these include:

  • “Fast casual” vs. traditional fast food: The new alternative for fast food is the “fast casual” restaurant, which provides speedy service in a relaxed, low-key and clean atmosphere. A MarketWatch article from last year said that McDonald’s was specifically competing with this space using new technology.
  • New menu options: Different items for sale can also put new demands on the supply chain. However, the Chicago Tribune reported that the company is introducing new Big Mac alternatives, including some sandwiches that replace the beef patties with chicken. These could work within the existing supply chain while still meeting customer demand and possibly driving new sales.
  • Shifting ownership overseas: McDonald’s is also thinking broader in its international dealings, and clearly isn’t afraid to franchise as it expands. The Motley Fool said that McDonald’s will only control 20 percent of its Chinese operations in the future. In a transaction worth $2.1 billion, the company will grant its business control in China to Carlyle Group and CITIC.

Supplier relationship management tools stand to improve the way an entire company’s supply chain works, leaving businesses in a superior position and providing customers with greater assurance going forward.

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