Operations Management: McDonald's Supply Chain

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McDonalds Supply Chain McDonalds is a global fast food chain which is known to exercise a great deal of control over the supply chain. The firm relies in a large number of different inputs which are principally products that are sold. The process is diverse, but highly controlled with a limited number of suppliers and the effective use of outsourcing to specialized firms. The process is all supported by complex information technology which makes demand forecasts of up to three months, to ensure that there are sufficient goods in the supply chain, without waste created through the over supply of perishable goods. The supply chain may be broken down into different layers. At the start of the supply chain there the initial sources of the input goods, for example, this will include arable and dairy farmers. These are referred to as tier 2 suppliers. In order to ensure that the supply meets the required criteria McDonald will often work with the tier 2 suppliers to improve output. This helps to ensure quality and increased efficiency will help to ensure costs are controlled. In some cases the company may make loans or even take equity in upstream suppliers. A good example of supply chain collaboration was seen when the firm started operations in India. There were no local suppliers growing iceberg lettuces, the company worked with some supplier to create a year round supply, aiding with seeds, equipment and relevant agricultural knowledge. The tier 2 suppliers originate
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