McDonald's Value Chain

ABNGSSTRAMANKDNPL
Zamudio, Ira Gayll C.

Salvador, Gem
Madlangsakay, Ephraim
Jamilarin, Paolo
Magcanlas, Don
1. Draw the Value Chain of a Quick Service restaurant.
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
& Sales
Firm Infrastructure
Human Resources
Technological Development
Procurement
Services
Primary
Activiti
es
Secondar
y
Activities
2. How would you go about identifying McDonalds systemic bottleneck?

In the evaluation of a value chain, the throughput is important. One will be able to identify a companys systemic bottleneck by
analyzing the capacity and processes in a particular activity, especially one of a primary. If the capacity in one activity is the least among
the activities, the bottleneck occurs there. That means that the throughput is limited to the capacity of that one particular activity. If
outbound logistics for example can process 5 million units of patties, while the services can process 5.5 million, the 0.5 million excess
capacity of the services is wasted by the inability of outbound logistics to catch up. In this instance, measures must be taken to increase
the capacity of the outbound logistics (i.e. scheduling, ordering and delivering enough patties, 5.5 million, to the restaurant).
Notes on the Primary and Secondary Activities of McDonalds

Primary Activities
1. Inbound Logistics:
a. This is the logistics of getting the raw materials into the headquarters,
where it will be managed to be redistributed to the different McDonalds
restaurants. McDonalds has to consider freight trucks, timing and
packaging.
b. They use JIT order and delivery to ensure freshness of the ingredients
c. Supply chain control
2. Operations:
a. This refers to the overall operations of the company: employment,
information systems, research and development, franchising, etc.
b. Corporate guidelines and supply management is imposed on franchisees.
3. Outbound Logistics:
a. This is logistics that pertain to the delivery of the product from the
centralized distribution system to the customer.
b. Distribution is important here, therefore freight trucks, timing and audits
are key. McDonalds uses JIT order and delivery to ensure freshness.
c. Information systems are important for the assembly line, order fulfillment
and transaction recording at the cashier.
d. Packaging quality reinforces freshness and ensures warm food.
e. Traditional dining hours were extended to accommodate late eaters and
the changing consumer lifestyles, eating in all hours of the day.
f. In response to high-traffic locations, double drive-thru lanes were added to
increase the number of customers served.
4. Marketing & Sales:
a. This primary activity determines the public perception of the company and
its products.
b. Health and wellness campaigns and consumer and market research are
important to improve the image of the product.
c. Prices are on the lower-end without sacrificing productquality, attracting a
majority of the masses, especially during times when the economy is poor.
d. McDonalds menu has been expanded to include new products that are
healthier and trending in different localities.
5. Services
a. This is the actual person-to-person delivery of the product to the customer,
from the grill to the seat of the customer.
b. McDonalds takes pride in its fast food service, order accuracy and friendly
customer service.
Secondary Activities
1. Firm Infrastructure
a. This activity ensures the viability of the restaurants as places for
consumption of food, with right ambiance. The company has refurbished
its interiors and exteriors to make its restaurants better for both its
employees and customers.
b. McDonalds opened its first corporate pilot green restaurant that received
a LEED Gold certification in 2009.
c. They also have to be built in accessible areas, and according to standard
designs of the McDonalds brand.
2. Human Resources
a. This ensures that the company is equipped with well-trained staffs that will
create and deliver quality products, and be managed accordingly.
b. McDonalds is the 2nd largest employer in the United States, which means
that there is a big burden on the Human Resources Department.
c. They place particular emphasis on employee training by making
institutions such as Hamburger University and McDonalds Leadership
Institute that develop its managers into competent ones.
3. Technology Development
a. This is a focus on modernization programs and making all parts of its
value chain more technologically apt, proficient and effective.
b. It entered into a 5-year IT support deal with Fujitsu to improve its
modernization program.
4. Procurement
a. This activity ensures that the ingredients and other materials that it
purchases will be of the best cost and best quality for the requirements of
the company.
b. McDonalds has created an E-procurement system that has become the
main reason for their successful supply chain management.
References:
Garuda Indonesia Cargo. (2012). Value Chain and Competitive Advantage of
McDonalds.
Retrieved
November
5,
2013
from
http://fagansusanto.wordpress.com/2012/11/22/value-chain-and-competitiveadvantage-of-mcdonalds/.
n.n. (n.d.). McDonalds Value Chain Analysis. Retrieved November 5, 2013 from
http://faculty.txwes.edu/trdanderson/course1/documents/McDonaldsValueChainA
nalysis_001.pdf

McDonald's Value Chain

Uploaded by

Copyright:

Available Formats

McDonald's Value Chain

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

McDonald's Value Chain

Uploaded by

Copyright:

Available Formats

ABNGSSTRAMANKDNPL

Zamudio, Ira Gayll C.

2. How would you go about identifying McDonalds systemic bottleneck?

Notes on the Primary and Secondary Activities of McDonalds

You might also like