Quality Control

A key to McDonald’s value is the customers’ confidence in the ability to experience the same general quality and service at any McDonald’s restaurant. McDonald’s has gone to extraordinary lengths to ensure quality control so that its product and service is consistent wherever the locations are. This control system is achieved in several ways. First is the 600 page operations and training manual that describes company procedures and standards in detail which may be very challenging for prospective franchises and less than one in ten reach the interview phase and less than one in a hundred are accepted for training. All prospective store franchisees must attend a two-week course at Hamburger University at their own expense. The coursework is rigorous and split between lab work in the restaurant and personnel management lectures. Graduates of Hamburger University learn to make sure McDonald’s food is of consistent quality and the store remains in good working order. This extensive time commitment creates high attrition rates, which enables McDonald’s to select only highly motivated and capable franchisees. Consistency is a major factor in the buildings. The architectural design of the interior and the exterior of the restaurant are carefully controlled to the point of exact measurements of virtually every item in the restaurant. Finally, all equipment must be purchased from McDonald’s approved suppliers. Once the store opens, the owner is held by the franchise agreement that details the obligations of both the owner and the corporation. Quality control is maintained by McDonald’s field consultants who periodically inspect restaurants on a 500-item checklist and a standardized 27-page inspection form. Poorly performing franchisees may find their license cancelled at any time that standards fail to be met. McDonalds takes their quality control very seriously and it is definitely shown through the amount of preparation that is needed to open a new location.

Service Process Design

The service process design for McDonalds would definitely start off Physical (service product bundle) because it is considered a restaurant and they are facilitating goods. A fast food restaurant such as McDonalds may be hard to decide whether they are considered a good or a service so they could be considered both, 50% goods 50% service.

With McDonalds, a major impact on their customers is there Face to Face interaction. Whether it be drive thru or dining inside, McDonalds has a huge customer base serving billions a day. Dealing with so many customers McDonalds has to be very flexible, and since no two customers are usually the same, McDonalds has to make sure to please everyone and they do this very efficiently and utilize customized service.

McDonald’s technology is probably the most important feature of the restaurants because it allows them to move so many customers in and out of their buildings every day. From the registers to their microwaves, to fryers and even in newer locations an automatic drink maker. Since McDonalds is a multibillion dollar company they have a huge advantage being able to update their technology constantly. If there’s already a device making your beverages then who knows how long they will have to keep the other employees around.

Process Selection

The Process selection for McDonalds starts with the Product Flow, which my group and I feel would be considered a job shop because it is making products only to a customer order using a process layout. McDonalds products are stocked pre cooked but when a customer makes an order the product is finished and is made to the customers order. Job Shop has a high flexibility which is key to McDonalds success (example: a hamburger with no pickles) and also a high volume of production because of the billions of customers McDonalds serves on a daily basis.

McDonalds classification by type of Customer Order we feel could be considered either a Make to Order or Assemble to Order, because in a MTO process individuals orders can be identified during production and then made to the customer specifications. The MTO process's cycle of production and order fulfillment begins with the customer order and then after receiving the order the design must be completed. The most important part of this process is the length of time it takes to fully deliver the product after the order has been placed, this is called the Lead Time. For restaurants like McDonalds this is definitely the biggest factor because without speed it wouldn’t be called Fast Food.

Assemble to Order could also work because in this process subassemblies are built up in advance of demand and is then put together at the last minute. Since some of McDonalds food is delivered pre cooked this could be considered the subassembly and once the customers order is placed this item is then put together to meet the customers needs. McDonalds subassemblies are also modular because each one of their hamburgers start off with all the same ingredients and everything is exactly the same until a customer changes it.

Inventory

After doing some inventory research on McDonalds we came up with some very useful information:

McDonalds is considered a JIT inventory operation meaning "Just in Time" another company that uses this same technique, is Dell. This means that McDonald's doesn't begin to cook or reheat food until a customer has placed a specific order. This prevents extra food from being used and cuts cost because inventory can still be kept and not thrown out.
There are two major parts to JIT inventory operation
One is lowering the ratio between ordering costs and holding costs, and shortening lead times. The results is an operation with high holding costs, and that ordering very small batches very frequently is the most profitable solution. This allows McDonalds to eliminate average inventory above the safety stock level. Then if lead times begin to decrease safety stock can be decreased. The result is inventory coming "just in time."

The biggest benifit McDonalds sees out of running there inventory this way is better food at a lower cost. They also improve customer service because it allows special orders to be made correctly and it does not cause delays.

McDonalds is obviously a huge company and is run very well. They operate over 31,000 restaurants worldwide, and employ more than 1.5 million people. With these kinds of numbers it becomes even clearer that the McDonalds Franchise is a very succesful one and we personally feel without their inventory running so smoothly this would not be possible.

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