21803927 McDonalds INDAIN Supply Chain (2)

8/6/2019 21803927 McDonalds INDAIN Supply Chain (2)

1/29

Mc DONALDS SUPPLYMc DONALDS SUPPLY

CHAINCHAIN

DeevanshuDeevanshu SaxenaSaxena

DeeptiDeepti GoyalGoyal

NayandeepNayandeep KaurKaurRajeshRajesh YadavYadav

RidhiRidhi PoddarPoddar


2/29

AgendaAgenda

Company OverviewCompany Overview

The McDonalds SupplyThe McDonalds Supply

ChainChain

Supply Chain IntegrationSupply Chain Integration

ResultsResults


3/29

The McDonalds SystemThe McDonalds System the Worlds Bestthe Worlds Best

QSR experienceQSR experience

World Market LeaderWorld 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 PerPer DayDay: 4: 477 mmillionillion

Corporate Strategy:Corporate Strategy:

QSC&V:QSC&V: QQuality,uality, SService,ervice, CCleanliness andleanliness and VValuealue

Ray Kroc: None of us is as good as all of usRay Kroc: None of us is as good as all of us

Plan ToWinPlan ToWin --> Successful business revitalization> Successful business revitalization

Growth by getting betterGrowth by getting better


4/29

One global Marketing Strategy One global Marketing Strategy


5/29

New Products New Products


6/29

and on and on--going innovationsgoing innovations


7/29

QQ

SS

RR

RRestaurantestaurant

QQuickuick

SServiceervice

RRestaurantestaurant


8/29


9/29

The McDonalds Supply ChainThe McDonalds Supply Chain

"Our growth plan for the next three"Our growth plan for the next three

years is more a function of getting ouryears is more a function of getting our

logistics and cold chain right ratherlogistics and cold chain right ratherthan going to far off places."than going to far off places."

-- AmitAmit JetiaJetia, managing director, McDonald's India,, managing director, McDonald's India,Mumbai Joint Venture, in 2000.Mumbai Joint Venture, in 2000.


10/29

PurchasingPurchasing The 3 legged stool: CorporationThe 3 legged stool: Corporation FranchiseesFranchisees

SuppliersSuppliers

Exclusive, certified facilitiesExclusive, certified facilities Handshake agreements, TrustHandshake agreements, Trust

Long term winLong term win--win partnership, risk sharingwin partnership, risk sharing

Rigorous product and service specificationsRigorous product and service specifications

Strong focus on quality, product specification andStrong focus on quality, product specification andenvironmental auditsenvironmental audits

Distributor is wholesaler for RestaurantsDistributor is wholesaler for Restaurants

The McDonalds Supply ChainThe McDonalds Supply Chain


11/29

LogisticsLogistics ~100 sales items in the restaurant~100 sales items in the restaurant

~400 SKUs in the warehouse (Hubs: up to 1,500)~400 SKUs in the warehouse (Hubs: up to 1,500)

~200 restaurants per DC (~180 DCs globally)~200 restaurants per DC (~180 DCs globally) Delivery frequency: ~3/wk, higher in urban areasDelivery frequency: ~3/wk, higher in urban areas

22--3 stops per route3 stops per route

Exclusive distributors (3PL)Exclusive distributors (3PL)

Long term partnerships with service providers,Long term partnerships with service providers,risk sharingrisk sharing

Strong quality focus (Cold Chain, HACCP, QIP)Strong quality focus (Cold Chain, HACCP, QIP)


ChainChain


12/29

Mc D India supply chainMc D India supply chain

Before it set up its firstBefore it set up its first restaurant in the country itin the country it

infused Rs 400infused Rs 400 CroreCrore to set up its delivery mechanism.to set up its delivery mechanism.

McDonalds initiative to set up an efficient supply chainMcDonalds initiative to set up an efficient supply chain

and deploy stateand deploy state--ofof--art technology changed the entireart technology changed the entire

Indian fast food industryIndian fast food industry

McDonalds distributionMcDonalds distribution centrescentres in India came in thein India came in the

following order:following order: NoidaNoida andand KalamboliKalamboli (Mumbai) in(Mumbai) in

1996, Bangalore in 2004, and the latest one in Kolkata1996, Bangalore in 2004, and the latest one in Kolkata(2007).(2007).


13/29

Between 1992 and 1996, when McDonald's opened its first outletBetween 1992 and 1996, when McDonald's opened its first outlet

in India, it worked frenetically to put the perfect supply chain inin India, it worked frenetically to put the perfect supply chain in

place. It trained the local farmers to produce lettuces or potatoesplace. It trained the local farmers to produce lettuces or potatoes

to specifications and worked with a vendor to get the perfect coldto specifications and worked with a vendor to get the perfect coldchain in place. And explained to the suppliers precisely why onlychain in place. And explained to the suppliers precisely why only

one particular size of peas was acceptable These efforts paid offone particular size of peas was acceptable These efforts paid off

in the form of joint ventures between McDonald's India (a 100%in the form of joint ventures between McDonald's India (a 100%

whollywholly--owned subsidiary of McDonald's USA) andowned subsidiary of McDonald's USA) and HardcastleHardcastle

Restaurants Pvt. Ltd, (Mumbai) and Connaught Plaza RestaurantRestaurants Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant

(New Delhi).(New Delhi).


14/29

COLD CHAIN PartnersCOLD CHAIN Partners

1.1. DynamixDynamix Dairy Industries (Supplier of Cheese)Dairy Industries (Supplier of Cheese)

2.2. TrikayaTrikaya Agriculture (Supplier of Iceberg Lettuce)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. RadhakrishnaRadhakrishna Foodland (Distribution Centres for Delhi andFoodland (Distribution Centres for Delhi and

Mumbai)Mumbai)

5.5. AmritAmrit Food (Supplier of long life UHT Milk and Milk ProductsFood (Supplier of long life UHT Milk and Milk Products

for Frozen Desserts)for Frozen Desserts)


15/29

1.1. DynamixDynamix Dairy Industries (Supplier ofDairy Industries (Supplier of

Cheese)Cheese)

ully 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 measures and continuous Research &Stringent quality control measures 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 degrees Celsius to stop bacterial growth andimmediately to two degrees Celsius to stop bacterial growth and

preserve freshness. From this point onwards, until just before thepreserve freshness. From this point onwards, until just before the

burger is actually served in a McDonalds restaurant hundreds ofburger is actually served in a McDonalds restaurant hundreds ofkilometerskilometers away, the temperature is never allowed to increase.away, the temperature is never allowed to increase.


16/29

2.2.TrikayaTrikaya Agriculture (Supplier of IcebergAgriculture (Supplier of Iceberg

Lettuce)Lettuce)

A specialized nursery with a team of agricultural expertsA specialized nursery with a team of agricultural experts

Drip and sprinkler irrigation in raised farm beds with fertilizerDrip and sprinkler irrigation in raised farm beds with fertilizer

mixing plant.mixing plant.

PrePre--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 are moved into the preVegetables are moved into the pre--cooling room within half ancooling room within half an

hour of harvesting.hour of harvesting.

The preThe pre--cooling room ensures rapid vacuum cooling to 2 C withincooling room ensures rapid vacuum cooling to 2 C within

90 minutes.90 minutes.

The pack house, preThe pack house, pre--cooling and cold room are located at thecooling and cold room are located at the

farms itself, ensuring no delay between harvesting, prefarms itself, ensuring no delay between harvesting, pre--cooling,cooling,

packaging and cold storagepackaging and cold storage


17/29

3) Vista Processed Foods Pvt. Ltd.3) Vista Processed Foods Pvt. Ltd.(Supplier of(Supplier ofChicken and Vegetable range of products including Fruit Pies)Chicken and Vegetable range of products including Fruit Pies)

A joint venture with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. andA joint venture 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 infrastructure at their plant atvegetable foods. A world class infrastructure at their plant at TalojaTaloja,,

Maharashtra, has:Maharashtra, has:

The technology includes hiThe technology includes hi--tech refrigeration plants for manufacture of frozentech refrigeration plants for manufacture of frozen

food at temperatures as low asfood at temperatures as low as -- 3535 C. This is vital to ensure that theC. This is vital to ensure that the

frozen food retains it freshness for a long time and the 'cold chain' isfrozen food retains it freshness for a long time and the 'cold chain' is

maintained. The frozen product is immediately moved to cold storagemaintained. The frozen product is immediately moved to cold storage

roomsrooms..


18/29

3.3. RadhakrishnaRadhakrishna FoodlandFoodland(Distribution Centres for Delhi and Mumbai)(Distribution Centres for Delhi and Mumbai)

An integral part of theAn integral part of the RadhakrishnaRadhakrishna Group, Foodland specializes inGroup, Foodland specializes in

handling large volumes, providing the entire range of services includinghandling large volumes, providing the entire range of services including

procurement, quality inspection, storage, inventory management,procurement, quality inspection, storage, inventory management,

deliveries, data collection, recording and reporting.deliveries, data collection, recording and reporting.

1.1. A oneA one--stop shop for all distribution management services.stop shop for all distribution management services.

2.2. Dry and cold storage facility to store and transport perishable products atDry and cold storage facility to store and transport perishable products at

temperaturestemperatures uptoupto --22 Degree22 Degree CelCel..

3.3. Effective process control for minimum distribution cost.Effective process control for minimum distribution cost.

'Cold, Clean, and On'Cold, Clean, and On--Time Delivery'Time Delivery'Plays a very vital role in maintaining the integrity of the products throughoutPlays a very vital role in maintaining the integrity of the products throughout

the entire 'cold chain'.the entire 'cold chain'.


19/29

Mc D India supply chainMc D India supply chain

Quality Inspection ProgrammeQuality Inspection Programme (QIP(QIP) carries out quality checks at) carries out quality checks at

over 20 different points in the Cold Chain system. Setting up of theover 20 different points in the Cold Chain system. Setting up of the

Cold Chain has also enabled it to cut down on operationalCold Chain has also enabled it to cut down on operational

wastagewastage Hazard Analysis Critical Control PointHazard Analysis Critical Control Point (HACCP)(HACCP) is a systematicis a systematic

approach to food safetyapproach to food safety

Based on HACCP guidelines, control points and critical controlBased on HACCP guidelines, control points and critical control

points for all McDonald's major food processing plants andpoints for all McDonald's major food processing plants and

restaurants in India have been identifiedrestaurants in India have been identified


20/29

McDonalds Supply Chain ChallengesMcDonalds 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

OrderOrder-- and inventory managementand inventory management

restaurantrestaurant DCDC suppliersupplier --

raw material supplierraw material supplier

Bull Whip effectBull Whip effect

Change Management in a deChange Management in a de--centralized structurecentralized structure


ChainChain


21/29

Future orientated strategiesFuture orientated strategies


22/29

Supply Chain IntegrationSupply Chain Integration


23/29

but they need not carewhere the goods come from!

As demand arises oncustomers side ...

... supply turns on and off

automatically, ...

The McDonalds Supply Chain One Stop Shopping processes

and an automated water supply have a lot in common:

One Stop ShoppingOne Stop Shopping


24/29

OneOne--StopStop--Shopping Lean Logistics SolutionShopping Lean Logistics Solution


25/29


26/29

ResultsResults


27/29


28/29

EnablersEnablers

One stop shopping conceptOne stop shopping concept -- Central file managementCentral file management

Inventory managementInventory management -- Restaurant simplificationRestaurant simplification

Synchronizing the perishable Supply ChainSynchronizing the perishable Supply Chain

Demand forecastingDemand forecasting

Promotional + Continuous SupplyPromotional + Continuous Supply

Supplier and DC levelSupplier and DC level

Supply PlanningSupply Planning

Restaurant and DC levelRestaurant and DC level

Visibility and Collaboration across the chainVisibility and Collaboration across the chain

Synchronization delivers significantSynchronization delivers significant

business benefits to both the customerbusiness benefits to both the customer

and the supply chainand the supply chain


29/29

hank youhank you

ery muchery much

for yourfor your

indindttentionttention

Documents

21803927 McDonalds INDAIN Supply Chain (2)