mcdonalds indain supply chain
Post on 16-Nov-2014
6.022 Views
Preview:
DESCRIPTION
TRANSCRIPT
Mc DONALDS SUPPLY Mc DONALDS SUPPLY CHAIN CHAIN
Deevanshu SaxenaDeevanshu Saxena
Deepti GoyalDeepti Goyal
Nayandeep KaurNayandeep Kaur
Rajesh YadavRajesh Yadav
Ridhi PoddarRidhi Poddar
AgendaAgenda
Company OverviewCompany Overview The McDonald’s Supply The McDonald’s Supply
ChainChain Supply Chain IntegrationSupply Chain Integration ResultsResults
The McDonald’s System – the World’s The McDonald’s System – the World’s Best QSR experienceBest QSR experience
World Market LeaderWorld Market Leader in the QSR area (Quick Service in the QSR area (Quick Service Restaurant)Restaurant)
Franchise System (72%)Franchise System (72%) System System 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 and leanliness and VValuealue Ray Kroc: “None of us is as good as all of us”Ray Kroc: “None of us is as good as all of us” Plan To Win -> Successful business revitalizationPlan To Win -> Successful business revitalization Growth by getting betterGrowth by getting better
One global Marketing Strategy …One global Marketing Strategy …
New Products …New Products …
… … and on-going innovationsand on-going innovations
SS
RR
QQuick uick SService ervice RRestaurantestaurant
QQuickuick
SServiceervice
RRestaurantestaurant
The McDonald’s Supply ChainThe McDonald’s Supply Chain
"Our growth plan for the next three "Our growth plan for the next three years is more a function of getting our years is more a function of getting our logistics and cold chain right rather logistics and cold chain right rather than going to far off places."than going to far off places."
- Amit Jetia, managing director, McDonald's India, - Amit Jetia, managing director, McDonald's India, Mumbai Joint Venture, in 2000.Mumbai Joint Venture, in 2000.
PurchasingPurchasing ““The 3 legged stool”: Corporation – Franchisees – The 3 legged stool”: Corporation – Franchisees –
SuppliersSuppliers Exclusive, certified facilitiesExclusive, certified facilities Handshake agreements, TrustHandshake agreements, Trust Long term win-win partnership, risk sharingLong term win-win partnership, risk sharing Rigorous product and service specificationsRigorous product and service specifications Strong focus on quality, product specification and Strong focus on quality, product specification and
environmental auditsenvironmental audits Distributor is wholesaler for RestaurantsDistributor is wholesaler for Restaurants
The McDonald’s Supply ChainThe McDonald’s Supply Chain
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 2-3 stops per route2-3 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)
The McDonald’s Supply The McDonald’s Supply ChainChain
Mc D India supply chainMc D India supply chain
Before it set up its first Before it set up its first restaurant in the country it in the country it infused Rs 400 Crore to set up its delivery mechanism. infused Rs 400 Crore to set up its delivery mechanism. McDonald’s initiative to set up an efficient supply chain McDonald’s initiative to set up an efficient supply chain and deploy state-of-art technology changed the entire and deploy state-of-art technology changed the entire Indian fast food industryIndian fast food industry
McDonald’s distribution centres in India came in the McDonald’s distribution centres in India came in the following order: Noida and Kalamboli (Mumbai) in following order: Noida and Kalamboli (Mumbai) in 1996, Bangalore in 2004, and the latest one in Kolkata 1996, Bangalore in 2004, and the latest one in Kolkata (2007).(2007).
Between 1992 and 1996, when McDonald's opened its first outlet Between 1992 and 1996, when McDonald's opened its first outlet in India, it worked frenetically to put the perfect supply chain in in India, it worked frenetically to put the perfect supply chain in place. It trained the local farmers to produce lettuces or potatoes place. It trained the local farmers to produce lettuces or potatoes to specifications and worked with a vendor to get the perfect cold to specifications and worked with a vendor to get the perfect cold chain in place. And explained to the suppliers precisely why only chain in place. And explained to the suppliers precisely why only one particular size of peas was acceptable These efforts paid off one 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% wholly-owned subsidiary of McDonald's USA) and Hardcastle wholly-owned subsidiary of McDonald's USA) and Hardcastle Restaurants Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant Restaurants Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant (New Delhi). (New Delhi).
COLD CHAIN PartnersCOLD CHAIN Partners
1.1. Dynamix Dairy Industries (Supplier of Cheese)Dynamix Dairy Industries (Supplier of Cheese)
2.2. Trikaya Agriculture (Supplier of Iceberg Lettuce)Trikaya Agriculture (Supplier of Iceberg Lettuce)
3.3. Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of products including Fruit Pies)Vegetable range of products including Fruit Pies)
4.4. Radhakrishna Foodland (Distribution Centres for Delhi and Radhakrishna Foodland (Distribution Centres for Delhi and Mumbai)Mumbai)
5.5. Amrit Food (Supplier of long life UHT Milk and Milk Products Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts) for Frozen Desserts)
1.1. Dynamix Dairy Industries (Supplier of Dynamix Dairy Industries (Supplier of Cheese)Cheese)
Fully automatic international standard processing facility. Fully automatic international standard processing facility. Capability to convert milk into cheese, butter/ghee, skimmed milk Capability 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 &
Development Development
Each batch is mixed in one large stainless steel cooler and chilled Each batch is mixed in one large stainless steel cooler and chilled immediately to two degrees Celsius to stop bacterial growth and immediately to two degrees Celsius to stop bacterial growth and preserve freshness. From this point onwards, until just before the preserve freshness. From this point onwards, until just before the burger is actually served in a McDonald’s restaurant hundreds of burger is actually served in a McDonald’s restaurant hundreds of kilometers away, the temperature is never allowed to increase. kilometers away, the temperature is never allowed to increase.
2. Trikaya Agriculture (Supplier of 2. Trikaya Agriculture (Supplier of Iceberg Lettuce)Iceberg 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 fertilizer mixing Drip and sprinkler irrigation in raised farm beds with fertilizer mixing
plant.plant. Pre-cooling room and a large cold room for post harvest handling. Pre-cooling room and a large cold room for post harvest handling. Refrigerated truck for transportation.Refrigerated truck for transportation. Vegetables are moved into the pre-cooling room within half an hour Vegetables are moved into the pre-cooling room within half an hour
of harvesting. of harvesting. The pre-cooling room ensures rapid vacuum cooling to 2º C within The pre-cooling room ensures rapid vacuum cooling to 2º C within
90 minutes. 90 minutes. The pack house, pre-cooling and cold room are located at the farms The pack house, pre-cooling and cold room are located at the farms
itself, ensuring no delay between harvesting, pre-cooling, packaging itself, ensuring no delay between harvesting, pre-cooling, packaging and cold storageand cold storage
3) Vista Processed Foods Pvt. Ltd. 3) Vista Processed Foods Pvt. Ltd. (Supplier of (Supplier of Chicken 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. and A joint venture with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and Vista Processed Foods Pvt. Ltd., produces a range of frozen chicken and Vista Processed Foods Pvt. Ltd., produces a range of frozen chicken and vegetable foods. A world class infrastructure at their plant at Taloja, vegetable foods. A world class infrastructure at their plant at Taloja, Maharashtra, has:Maharashtra, has:
The technology includes hi-tech refrigeration plants for manufacture of frozen The technology includes hi-tech refrigeration plants for manufacture of frozen food at temperatures as low as - 35° C. This is vital to ensure that the food at temperatures as low as - 35° C. This is vital to ensure that the frozen food retains it freshness for a long time and the 'cold chain' is frozen food retains it freshness for a long time and the 'cold chain' is maintained. The frozen product is immediately moved to cold storage maintained. The frozen product is immediately moved to cold storage roomsrooms. .
3. Radhakrishna Foodland3. Radhakrishna Foodland(Distribution Centres for Delhi and Mumbai)(Distribution Centres for Delhi and Mumbai)
An integral part of the Radhakrishna Group, Foodland specializes in An integral part of the Radhakrishna Group, Foodland specializes in handling large volumes, providing the entire range of services including handling 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 one-stop shop for all distribution management services. A one-stop shop for all distribution management services.
2.2. Dry and cold storage facility to store and transport perishable products at Dry and cold storage facility to store and transport perishable products at temperatures upto -22 Degree Cel.temperatures upto -22 Degree Cel.
3.3. Effective process control for minimum distribution cost. Effective process control for minimum distribution cost.
'Cold, Clean, and On-Time Delivery' 'Cold, Clean, and On-Time Delivery' Plays a very vital role in maintaining the integrity of the products throughout Plays a very vital role in maintaining the integrity of the products throughout
the entire 'cold chain'. the entire 'cold chain'.
Mc D India supply chainMc D India supply chain
Quality Inspection Programme Quality 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 the over 20 different points in the Cold Chain system. Setting up of the Cold Chain has also enabled it to cut down on operational Cold Chain has also enabled it to cut down on operational wastagewastage
Hazard Analysis Critical Control Point Hazard Analysis Critical Control Point (HACCP) (HACCP) is a systematic is a systematic approach to food safetyapproach to food safety
Based on HACCP guidelines, control points and critical control Based on HACCP guidelines, control points and critical control points for all McDonald's major food processing plants and points for all McDonald's major food processing plants and restaurants in India have been identifiedrestaurants in India have been identified
McDonald’s Supply Chain ChallengesMcDonald’s Supply Chain Challenges Even stronger focus on freshness and qualityEven stronger focus on freshness and quality On-going product innovationsOn-going product innovations Strong customer demand fluctuations Strong customer demand fluctuations
based on promotionsbased on promotions Order- and inventory managementOrder- and inventory management
restaurant – DC – supplier -restaurant – DC – supplier -raw material supplierraw material supplier
Bull Whip effect Bull Whip effect Change Management in a de-Change Management in a de-
centralized structure centralized structure
The McDonald’s Supply The McDonald’s Supply ChainChain
Future orientated strategiesFuture orientated strategies
Supply Chain IntegrationSupply Chain Integration
… but they need not care where the goods come from!”
“As demand arises on customers’ side ...
... supply turns on and off automatically, ...
The McDonald’s Supply Chain “One Stop Shopping” processes and an automated water supply have a lot in common:
One Stop ShoppingOne Stop Shopping
““One-Stop-Shopping“ Lean Logistics SolutionOne-Stop-Shopping“ Lean Logistics Solution
Supply Chain Services for McDonald‘s Supply Chain Services for McDonald‘s restaurantsrestaurants
ResultsResults
Achievements: Yield Improvement
Gross Margin improvement > 0.15%
Raw Waste Reduced Reduced by 30%
Average Inventory Reduced Reduced by 30%
Store Transfers HalvedOrder Time Halved
Goals: Yield Improvement
0.15% increase in Gross Margin
Raw Waste Reduction Not included in Business Case
Inventory Reduction 15% decrease on the Inventory Level
Store Transfers ReductionSimplification of Order Process
ResultsResults
EnablersEnablers One stop shopping concept One stop shopping concept - Central file management- Central file management Inventory management Inventory management - Restaurant simplification- Restaurant simplification
Synchronizing the perishable Supply ChainSynchronizing the perishable Supply Chain Demand forecastingDemand forecasting
Promotional + Continuous SupplyPromotional + Continuous Supply Supplier and DC level Supplier 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 significant Synchronization delivers significant business benefits to both the business benefits to both the customer and the supply chaincustomer and the supply chain
Thank you Thank you very muchvery much for your for your kind kind attentionattention
top related