McDonald Burgers

Mc Donalds is a leading global foodservice retailer with more than 35000

local restaurants serving nearly 70 million people in more than 100
countries each day. Mcdonald had a total of 1.8 million employees and 80%
of its restaurants are franchised.
The nature of operations can be classified into four areas :
1.
2.
3.
4.

Volume of Products or services turned over

The Variety of services offered
The variation in demand for this service or product
Whether the operation has high or low visibility in relation to its
customers.

A Profile of McDonald Burgers using the four Vs :

Volume High volume Operational Implications high repeatability, high
specialization, high systemization, high capital intensity, low unit costs
The more a business can produce using the same production processes, will
mean greater cost savings. A large volume of burger buns are produced to
meet the demand for the large volume of burgers. In bun production there
will be specialized employees who make the dough , bake and monitor the
output. As the task is repeated, the activities can be streamlined. Standard
procedures are formulated and set down in a manual with instructions on
how each part of the process is performed. As the process is systemized,
McDonald uses specialized technologies that give higher processing
efficiencies. The high volume processes for buns gives more opportunity
for McDonalds to produce them at low costs. This results in greater
efficiency for McDonalds than a small restaurant. This makes McDonald
more competitive at the country level and also the world level.
McDonald sources the wheat for the buns from the UK,Germany, USA and
Canada. The buns are also baked in special centralized bakeries around the
world, like the ones at Lancashire and Oxfordshire for McDonalds UK. (this
is from the mcdonald.uk website)
Mcdonald also has specialized suppliers for buns, who reap all the
advantages of mass production and pass on the benefits to
McDonalds(Luna,2008).Fresh Start Bakeries, which makes buns for the
McDonald burgers, has 17 bakeries across the globe dedicated to making
buns for the McDonald brand.
Variety high variety Operational implications - Flexible , complex, match
customer needs.
While it may seem ironical, McDonald reaps the benefits of both volume
and variety. McDonalds process is a hybrid process (Chase ,2006). Cooked

patties are inventoried in a special storage device that maintains the

moistness of the cooked patties for up to 30 minutes. The process makes
extensive use of the latest cooking technologies. Hamburger patties are
cooked in less than 45 seconds. Buns are toasted in only 11 seconds.
Individual items on each customer order are transmitted immediately to the
area where the hamburgers are assembled using a specially designed
computer system. The assembly process that includes toasting the buns is
designed to respond to a customer order in only 15 seconds. By combining
the latest technology and clever process engineering, mcDonalds has
developed a very quick response process. The product is fresh, delivered
quickly and made to the exact specifications of the customer.(chase2006)
In this way McDonald is able to deliver large volumes of burgers, but
catering to the specific needs of its customers( variety). Mcdonald therefore
is able to display a large variety of burgers on its menu, but still deliver
them in a standardized fashion, taking advantage of superior process
technology.
McDonald India does not offer beef or pork. Also specific varieties have
been developed in different countries, keeping the tastes of the locals in
mind. For example , in India there are Paneer and aloo burgers, which are
vegetable burgers, using local ingredients.
Variation Low variation in demand Operational implications stable,
routine , predictable, high utilization, low unit costs
Customers arriving at McDonalds would generally find whatever they
wanted, from the menu. McDonald maintained a small inventory of food ,
that is finished goods inventory that was ready to sell to customers on
demand. McDonald used historical customer demand patterns by the time
of day(Martin,2007) . McDonald was able to predict inventory levels based
on past trends. Demand was therefore predictable at McDonald . Variations
due to seasons and festivals were also accounted for in its trend
predictions. Mcdonald
is able to maintain customer satisfaction by
maintaining optimum organization
process workflows . Ensuring that
operational systems are available to meet customer demands and value
expectations , is part of McDonalds strategy.
.
Visibility high operational visibility operational implications short
waiting tolerance, satisfaction governed by customer perception, customer
contact skills needed, high unit costs.
A visit to a McDonalds outlet will show that the burger making operations
are visible to the customer. What is not visible is the supply and inventory
of patties ,buns and other ingredients.
Here is a youtube video on the making of the big mac :
http://www.youtube.com/watch?v=eUvI2wE2YZk
Here is video on the behind the scenes at Mcdonalds :
http://www.youtube.com/watch?v=oSd0keSj2W8. This video is shot by a
Mcdonald team.

McDonalds takes conscious steps to ensure transparency of operations at

their outlets.
Identify attempts by the organization to alter its operations for improved
performance (changing its four Vs. profile).
Mc Donald plans to further its initiatives on customization, coupled with
speed of service(Brandau,2013) .This is with the intent to increase its
market share in 2014. These two issues seem to be irreconcilable because
traditional theory dictates that speed ( which translates to high volume )
comes with standardization, as opposed to customization( variety ) .
However Mc Donald has made the inconceivable possible by innovative use
of technology and operational efficiencies.
Mc Donald plans for additional third drive-thru windows in their new
restaurants .This means more volume. At the same time they are
expanding menu offerings, which means high variety. McDonalds plans to
make the two opposites work with high density kitchen tables which can
hold a large number of food ingredients . These tables offer greater
customization(variety) by accommodating more ingredients and improve
overall speed of service by improving the overall design and efficiency of
the preparation table. (Brandau,2013). This remodeling of the back end
would translate into more sales( volume ) and more profits for McDonalds.
McDonald is testing customization where 20 different burger toppings for a
cheeseburger can be selected from an iPad menu ( more variety)
(Brandau,2013)
McDonald has now introduced a new system of taking orders, to improve
the speed of services. Under this new dual point ordering system, the
customer places the order at one end of the counter and is given a receipt
with a number.
When the order number appears on a screen, the
customer picks up his food at the other end of the counter(Lariviere,2013).
This has increased order accuracy and speed( volume ).

References :
1. Luna,N.,(2008)Fresh Buns:how does Mcdonalds get them?,The
orange
county
register,
retrieved
from
http://www.ocregister.com/articles/mcdonald-100289-plant-buns.html
2. Chase,(2006) Operations Management for competitive advantage,
Tata McGraw-Hill Education, 2006.
3. Martin,J.,W.(2007),Operational Excellence: Using Lean Six Sigma to
Translate Customer Value through Global Supply Chains (Google
eBook), CRC Press
4. Brandau,M.,(2013)McDonalds to focus on customization, speed in
2014,Nations Restaurant News, retrieved from http://nrn.com/quickservice/mcdonalds-focus-customization-speed-2014
5. Lariviere,M.,(2013)Fallen Arches:fixing service at McDonalds, The
operations
room,retrieved
from
http://operationsroom.wordpress.com/2013/04/15/fallen-arches-fixingservice-at-mcdonalds/