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Date Submitted: 04/20/2016 04:38 PM
MBA 614 - - McDonald’s Supply Chain
As of December 31, 2015, there were 36,525 McDonald’s restaurants operating in 119 countries and serves over 69 million customers daily. To support these operations, McDonald’s has a complicated network of indirect and direct suppliers. McDonald’s direct suppliers are generally distribution centers and final processing facilities. The McDonald’s corporate office does not directly produce or sell any of the food or paper products used by restaurants. However, the company negotiates all purchasing contracts for corporate and franchised restaurants and strives to create long-term relationships with their direct suppliers. McDonald’s has also made significant efforts in recent years to improve the traceability of their food products through the global supply chain. McDonald’s strives to maintain a 3-step supply chain where the indirect supplier is typically the slaughterhouse or farm transports batches to either the processing facility or distribution facility, which then ships directly to restaurants.
Over the past few years McDonald’s global supply chain has withstood several large disruptions including the closing of a local meat supplier in China by the government for using expired and contaminated meat. Food inspectors in Russia temporarily forced several McDonald’s restaurants to close due to suspected sanction violations. Also, restaurants in Japan were forced to ration fries after strikes at American ports resulted in the inability to source potatoes. Despite these challenges, Gartner has ranked the McDonald’s supply chain as 2nd for the second year in a row, largely due to the amount of inventory that McDonald’s processes annually. McDonald’s three-step supply chain was lauded by the British government in 2014 for being able to trace their food products during the horse meat scare in 2013.
Harvard Business Review details risks associated with McDonalds supply chain disruptions including transparency and the need...