Process Planning at Mcdonald
This Case Study discusses how precise process planning helps McDonald’s to achieve operational excellence. It is concerning Production Process.
Table of Content
About McDonald Company
McDonald’s was founded in 1940 as a barbecue restaurant in San Bernardino, California. It is an American hamburger and fast food restaurant chain that was started by Richard and Maurice McDonald. Using the production line principle, Richard and Maurice McDonald, reorganized their business as a hamburger stand, in 1948.
In 1953, using the arches logo, the first McDonald’s franchise opened in Phoenix, Arizona. The company was subsequently purchased by the businessman Ray Kroc who joined the company as a franchise agent in 1955.
McDonald’s is considered to be the world’s largest restaurant chain in recent times, serving approximately 68 million customers daily across 120 countries. The company is known to have approximately 36,900 outlets in 2016.
The McDonald’s menu generally contains hamburgers, chicken products, French fries, breakfast items, wraps, cheeseburgers, soft drinks, milkshakes, and desserts. The company has also added many items to its menu that include salads, smoothies, fish, and fruit in response to changing consumer tastes and after it was criticized for serving food of unhealthy nature.
In a McDonald’s model, the restaurant is operated either by a franchisee, an affiliate, or the company itself. The source of revenue for the corporation is the revenues generated from the rent, royalty, and fees received from the paid franchisees, and sales from the company-operated restaurants.
As per a BBC report published in 2012, McDonald’s was positioned as the world’s second-largest private employer second to Walmart with nearly 1.9 million employees, with 1.5 million employed by the franchises. Currently headquartered in Oak Brook, Illinois, McDonald’s plans to relocate its global headquarters to Chicago by early 2018.
Mcdonald’s Process Planning
McDonald’s is considered to have the best processes and systems that leave nothing unplanned. From operations, purchasing, finance, sales, and marketing to product innovation, all activities take place as a part of precise process planning. Even though their food menu is not rated five stars, the business processes, operation, and business strategy are considered to be of a five-star level by experts. High-level policies regarding process planning and implementation seem to have contributed largely to the company’s success.
Though the front face of a McDonald’s outlet may be just some burger chute, drink dispensers, fries bank, and a couple of other things along with an impeccably friendly service suggestive of some very slick selling techniques, the secret to McDonald’s is actually what goes on backstage.
A very noticeable activity in McDonald’s outlets is burger chutes generally placed behind order counters where burgers are dispensed from the kitchen. The important aspect here is that the making of the burgers follows a standard operating protocol and is then dispensed in the chutes.
The chutes are designated for McDonald’s ‘Runner’ products i.e. the products that are predictable in high frequency and volume. Usually, runner products are Big Macs, Quarter Pounders, hamburgers, etc. The company has incorporated its high-level policy of operational excellence in the way runner products are produced with absolute precision.
It is believed that the management of runner products contributes largely to McDonald’s profits. Since McDonald’s focuses on high volume precision so every employee behind the chute is trained on McDonald’s specific way of making products as per their protocols. Hence managers are aware of the hourly output per employee. As the business depends on the successful execution of the processes, the company seems to have ingrained it in its employees.
Another strategic feature of process planning is that, in the chute, a burger is made in advance and placed in a buffer in the front end of the chute that helps to fulfill customer requirements. As a result, the customer does not have to wait for his/her order for longer.
Responsive process planning has helped McDonald’s in the:
- Enhancing service delivery by immediately addressing customer requirements. This further helps in achieving a positive customer experience.
- Acting as an indication of a gap for backend operators, that they need to fill. Thus, it also helps in controlled production, preventing wastage, and achieving operational excellence.
Operational Excellence in Burger Making Process
The burgers at McDonald’s restaurants are prepared by two people, splitting the process into two halves. This is to ensure that the gap in the burger chute gets filled as soon as possible. The packaging of the burger is done by a third person, making it similar to an assembly line in manufacturing. The process further enhances operational excellence and quality adherence.
In a case where there is a deviation from their regular requirements, for example, a customer asking for a regular hamburger without gherkins, the requirement would be placed under the category of a “stranger product”.
Such products are considered unimportant for their operational efficiency policy that shall not follow the chute process. In such cases, the focus is on service delivery instead, where the customer is asked to wait while the order is prepared and it is delivered to the customer’s seat.
The point here is that a balance is maintained by increasing efficiency in another standard if one of the standards gets compromised. This does indicate an increase in the cots but the same gets absorbed due to the relatively smaller percentage of such requirements.
Another factor that has contributed to the success of McDonald’s is its stringent hygiene standards. The outlets never compromise on these standards that they feel are important to their service delivery policy. McDonald’s has been able to sustain its business practices with huge efforts in their product research and sales and marketing processes.
Focus on High-Quality Service Delivery Process
Apart from making products in a precise process format, the service delivery process is also managed in a manner that helps McDonald’s in achieving high service quality and customer satisfaction. The total waiting time gets split between queuing time and service delivery time. Once a customer has made the payment, they are asked to move to the side lane while their order gets prepared, so that the next customer’s order can be taken.
This gives a perception of continuity and flows to the customer, even though the total service time remains the same. Another advantage of this process is that it reduces idle time at the billing counter thereby, decreasing the number of counters and staff requirements. This helps in improving the effectiveness of the overall process.
At the time of order preparation, a printed copy of the order is attached to the tray that serves as a checklist for the attending staff to ensure 100% accuracy in order delivery thereby adhering to the principles of “right first time, right every time”. This is in conformance with their quality policy.
A well-planned and well-executed process planning is the main ingredient behind the success of McDonald’s. The company has involved certain best practices in its operational processes that have helped it in:
- decreasing labor costs
- decreasing idle time at order counters
- maintaining continuous order processing
- increasing productivity
- eliminating wastage on all fronts
- providing high service delivery experience to customers
- maintaining consistent customer experience across all restaurants
- adhering to standard operating protocols to ensure consistency, leading to high-quality processes.