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Mc Donald's Case Essay

2418 words - 10 pages

Stock Control at McDonald’s

Stock Control

Careers
Stock Control
Training Glossary I.T. Customer Services Talking Point

Franchising

Marketing

Construction

Franchising

Finance

at McDonald’s
Customer Services
Apprenticeships

McDonald’s is one of only a handful of brands that command instant recognition in virtually every country in the world. It has more than 30,000 restaurants in over 119 countries, serving approximately 50 million people every day. All businesses face challenges on a daily basis. One of the major challenges facing McDonald’s is managing stock. Stock management involves creating a balance between meeting customers’ needs whilst at the same time ...view middle of the document...

As customer tastes change, McDonald’s needs to increase the range of new products it offers, so the challenge of reducing waste becomes even greater. In the past, stock ordering was the responsibility of individual restaurant managers. They ordered stock using their local knowledge as well as analysis of data indicating what the store sold the previous day, week and month. For example, if the previous week’s sales figures showed they sold 100 units of coffee, and net sales were rising at 10% weekly, they would have expected to sell 110 units in the present week. However, this was a very simple method and involved no calculations to take account of factors such as national promotions or school holidays. It took up a lot of the Restaurant Manager’s time, leaving them less time to concentrate on delivering quality food, service and cleanliness in the restaurants. In 2004, McDonald’s introduced a specialist central stock management function known as the Restaurant Supply Planning Department. This team communicates with restaurant managers on a regular basis to find out about local events. The team builds these factors into the new planning and forecasting system - called Manugistics - to forecast likely demand of finished menu items, for example Big Macs. The following case study looks at how McDonald’s manages its stock through its management systems and what benefits this brings.

Stock Control at McDonald’s
Page 2

Stock Control

Stock is the physical product a company buys, creates or sells. Every business has three main types of stock: raw materials, work-in-process materials and finished products. Types of stock Raw materials
Finance

Types of stock Franchising

Marketing

Construction

Work-in-progress Finished products
Training Glossary I.T.

1. Raw materials

The raw materials are the ingredients that will go into producing the finished product. For McDonald’s, these will include the buns, beef patties, paper cups, salad ingredients and packaging. These are delivered to the restaurants between 3 and 5 times a week. The raw materials arrive together on one lorry with three sections so that each Education Talking Point product can be storedCustomer Services temperature at a suitable The three sections are: • frozen • chilled • ambient – suitable for items that can be stored at room temperature, for example coffee or sugar sachets.

Apprenticeships

2. Work-in-progress (WIP)

Work-in-progress refers to stock items that are in the process of being made into finished product. A Big Mac consists of a bun, two beef patties, lettuce, cheese, pickles, onions, sauce and a small amount of seasoning. The restaurant will only combine these items just before the customer orders them so the Big Macs are hot and fresh when served.

3. Finished products

Finished products are goods that are ready for immediate sale to a customer. At any one time, a restaurant will have a range of products ready for sale, for example Big Macs,...

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