McDonalds

GROUP 1

10 OPERATIONS
MANAGEMENT
DECISIONS

1. Product and Service

Design
McDonalds goal in this strategic
decision area of operations
management is to provide affordable
products. As such, the serving sizes
and prices of its products are based
on the most popular consumer
expectations. However, some
McDonalds products are minimized
in size to make them more
affordable.

 Product planning in McDonald's

includes creating a menu keeping
both the economy and quality into
consideration.
Operation management processes
related to product design include:
achieving consistent and similar quality,
flavor and taste across their entire
restaurant worldwide by development of
sophisticated supplier network and
distributors' network.

2. Quality Management
Whether for profit, non-profit,
or an organization like healthcare maintenance organization,
quality management is the
single most important process
in any organization for
maintaining the quality of the
goods and services.

 Quality in McDonald Restaurant is very

important because of two reasons:
1. the legal requirements of the quality of
food served
2. to keep up the good reputation which
McDonalds restaurants have earned over
the years

Quality of food can be very difficult to

maintain and therefore, McDonald's
restaurant carry on a number of
practices to make sure that quality
food is served.

3. Process and Capacity

Design
McDonalds process design can
be classified as a mix of process
focus and service blueprinting.

Process Focus
Process focus is a strategy wherein
the facilities are organized around
specific activities and processes
devoted in making low-volume, highvariety products. It is characterized
as a model having high variation of
inputs (orders from customers)
which are processed differently
according to the nature of the order
(burger assembly, rice meal
assembly, etc), thus having variety
of outputs (food products served).

Characteristics of Process Focus

Small quantity and large variety of products
Broadly skilled employees
Specific instructions for each jobs
High inventory
Finished goods are made to order and not stored

Service Blueprinting
Service blueprinting is a process
analysis technique that focuses on
the customer and the providers
interaction with the customer. In the
first level of services, the activities
are under the control of customers.
In the second level, are activities of
the service provider interacting with
the customer. The third level
includes those activities that are
performed away from, and not
immediately visible to customers.

Service Blueprinting

4. Location Strategy
McDonalds mainly consider the proximity of
the branches to its market (customer). Its
the reason why we usually see McDonalds
near churches and schools. McDonalds used
the Center-of-Gravity Method in determining
the most optimal location for its branches
since this method takes into account the
location of markets. Since McDonalds
provide services, its focus is mainly on
maximizing revenue rather than minimizing
cost. This means that the location focus for
service firms should be on determining the
volume of customers and revenue.

5. Layout Design and

Strategy
Layout implies the area plan within the
McDonald's restaurant. The operational
management processes aimed at deciding the
general environment, the capacity of the restaurant
and responding to the customer demands are as
follows:
Planning the interior design which is standardized across all
restaurants across the world maintaining the health & safety
norms
Design the service area, reception, product area, product
delivery area, storage facilities and seating area
Design of the state of art kitchen to ensure faster and efficient
production of quality products
Homogeneity maintained by display of the universal brand
image - the McDonald's sign board.
Layouts are planned in such a way that the supervision
requirement is minimized.

6. Job Design and Human

Resources
McDonalds human resource
strategies involve training for skills
needed in the production line in
restaurant kitchens or production
areas. For this decision area of
operations management, individual
and organizational learning are also
emphasized to support McDonalds
organizational culture.

7. Supply Chain
Management
In McDonald's also have certain suppliers who
supply them the with the raw materials like buns,
beef, patties, ketchup, sauce, mayonnaise,
disposable cups, food packaging materials, etc.
Therefore, it has to manage its relationship in an
effective manner so as to get the raw materials at
the right time, in proper quantity, and at acceptable
cost.
The firms global supply chain supports its
various locations around the world. McDonalds has a
strategy of supply chain diversification for this
decision area of operations management. Such
strategy involves getting more suppliers from
different regions to reduce McDonalds supply chain
risks.

8. Inventory Management
McDonalds goal for this
strategic decision area of operations
management is to minimize
inventory costs while supporting
restaurant operations. The company
does not directly sell products and
ingredients to its restaurants.
Instead, local and regional
intermediaries and distributors
coordinate with McDonalds
restaurant managers to manage their

9. Scheduling
McDonalds uses corporate
conventions for scheduling, based on
local market conditions and laws, as
well as supply chain needs. For
example, the companys strategy
involves regular and seasonal
schedules to address fluctuations in
local market demand. Thus, in this
decision area of operations
management, McDonalds is flexible
and adapts to local market conditions.

10. Maintenance
Operation management
contributes to the McDonald's strategic
objectives by strongly aligning the
organizational processes thereby help
gain competitive advantages. In
addition to this, the quality
management has a strong relationship
with the goals & objectives which is
studied in the next section.