mcdonald's supply chain management case study

McDonald’s and the Challenges of a Modern Supply Chain

by Steve New

Recently, McDonald’s, the world’s iconic largest food service provider, has been (forgive the cliché) through the grinder. Poor performance has led to the departure of its CEO and plenty of critical attention in the business pages . Part of this story relates to the provenance, or origins, of its products: Chains that provide more upmarket “fast casual” dining such as Panera, Chipotle, and Shake Shack have brands that speak of freshness, health, and trustworthy sourcing.

Partner Center

Breaking Down McDonald’s Supply Chain Strategy: A Recipe for Success

Breaking Down McDonald’s Supply Chain Strategy – DFreight

The food supply chain is the process of getting food from producers to consumers, and it has evolved significantly in the digital age. McDonald’s is a significant player in the food supply chain, leveraging technology through its supply chain strategy to become highly efficient and stay competitive. Through partnerships with digital freight forwarders like DFreight, food companies can coordinate shipments, monitor performance, optimize resources, and monetize data analytics. With the help of digital forwarders, they have streamlined their food supply chain and improved their overall efficiency.

In this blog post, we will delve into the critical components of McDonald’s supply chain strategy and explore how it contributes to the company’s overall success.

Table of Contents

McDonald’s and Supply Chain Strategy

McDonald’s  is one of the world’s largest fast-food chains, with a global presence and millions of customers served daily. Understanding its supply chain strategy is essential to comprehend the company’s ability to deliver quality food and maintain customer satisfaction consistently.

A well-designed supply chain strategy is crucial for any successful business, and McDonald’s is no exception. By effectively managing its supply chain, McDonald’s ensures the timely delivery of ingredients, minimizes costs, and maintains product consistency across its vast network of restaurants.

In the previous blogs, we looked into the supply chains of famous and leading companies, which you can read about each of them in the section below.

Navigating the Complexities of McDonald’s Supply Chain

McDonald’s is one of the world’s largest and most successful fast food companies, and a complex and far-reaching supply chain powers its success. From procurement and supplier management to distribution and logistics, technology and innovation to sustainability and ethical practices, and collaboration and partnerships – managing the complexities of its supply chain is no small feat. In the following, we look at the various elements of McDonald’s supply chain and explore how it ensures consistent success.

Procurement and Supplier Management

McDonalds offers a wide range of food products to customers around the world. The company is committed to selecting high-quality suppliers, setting a rigorous quality control and standards, and maintaining strong relationships with suppliers. By understanding their effective supplier management practices, we can gain insights into McDonalds’ commitment to providing excellent customer satisfaction.

1. Sourcing Ingredients and Products

McDonald’s sources a wide range of ingredients and products to create its diverse menu. The company carefully selects suppliers meeting stringent quality and safety standards, from fresh produce to meat, packaging , and condiments. McDonald’s manages its procurement process to ensure a steady supply of high-quality ingredients aligned with its brand values.

2. Supplier Selection and Evaluation

Maintaining strong relationships with suppliers is critical for McDonald’s supply chain. The company selects and evaluates its suppliers based on reliability, capacity, cost-effectiveness, and adherence to ethical practices. Discovering how McDonald’s fosters collaboration and transparency with its suppliers will shed light on its effective supplier management practices.

3. Quality Control and Standards

Ensuring consistent quality across all its restaurants worldwide is a priority for McDonald’s through the rigorous quality control measures implemented by the company, including regular inspections, audits, and certifications. Understanding how McDonald’s maintains high-quality standards will give insights into its commitment to customer satisfaction.

Distribution and Logistics

McDonald’s supreme success in the fast-food industry is due in part to its effective logistical operations. From centralized distribution models to inventory management and transportation strategies, McDonald’s has perfected its supply chain in order to meet customer demand, prevent stockouts, and maintain efficient delivery networks. By exploring how McDonald’s manages distribution and logistics, we can gain insights into their strategic prowess.

1. Centralized Distribution Model

Efficient distribution and logistics play a vital role in McDonald’s supply chain strategy. The company employs a centralized distribution model, allowing for streamlined operations and reduced costs. Understanding how McDonald’s manages the movement of ingredients and products from suppliers to restaurants will provide valuable insights into their logistical prowess.

2. Inventory Management

Maintaining optimal inventory levels is crucial for a fast-food chain like McDonald’s. McDonald’s utilizes advanced inventory management systems to forecast demand, prevent stockouts, and minimize waste. Discovering their inventory management techniques will showcase their ability to achieve operational efficiency and meet customer demand.

3. Transportation and Delivery

Ensuring timely and efficient transportation is essential to deliver fresh food to McDonald’s restaurants. The company manages transportation and delivery logistics, including using dedicated distribution centers, fleet optimization, and route planning. Understanding their transportation strategies will show their ability to operate on a global scale while maintaining consistency and quality.

Technology and Innovation

McDonald’s is renowned for its commitment to innovation and efficiency in its supply chain operations. By leveraging advanced digital solutions, automation technologies, and data analytics, the company is able to optimize their operations and ensure customer satisfaction at all stages of the supply chain.

1. Digital Supply Chain Solutions

In today’s digital age, technology plays a vital role in supply chain management. McDonald’s leverages digital solutions such as order management systems, real-time tracking, and data analytics to optimize their supply chain. Exploring their use of technology will highlight their commitment to innovation and efficiency.

2. Automation and Robotics

Automation and robotics have revolutionized supply chain operations across industries. McDonald’s is no exception, utilizing automation technologies in various supply chain stages. Automation and robotics enhance efficiency, reduce costs, and ensure food preparation and packaging consistency.

3. Data Analytics and Forecasting

Accurate demand forecasting is critical for McDonald’s to manage inventory, minimize waste, and meet customer expectations. The company utilizes data analytics, machine learning in logistics , and predictive modeling to forecast demand, optimize supply chain operations, and drive business growth. Understanding their data-driven approach will showcase their ability to adapt to changing consumer preferences.

Sustainability and Ethical Practices

McDonald’s has committed to sustainable sourcing, environmental impact reduction, and labor and social responsibility as core principles of its supply chain management strategy. These initiatives demonstrate the company’s commitment to protecting the environment and providing safe and ethical working conditions for those involved in their supply chain.

1. Sustainable Sourcing Initiatives

Sustainability is an increasingly important aspect of supply chain management, and McDonald’s recognizes the significance of minimizing its environmental footprint. The company’s sustainable sourcing initiatives include responsible agricultural practices, support for local farmers, and commitment to certified sustainable ingredients. Discovering McDonald’s efforts toward sustainability will highlight its dedication to protecting the planet.

2. Environmental Impact Reduction

McDonald’s understands the importance of reducing its environmental impact. The company implements measures to minimize waste generation, optimize packaging materials, and promote recycling and energy efficiency across its supply chain. Exploring their environmental initiatives will showcase their commitment to operating in an environmentally responsible manner.

3. Labor and Social Responsibility

McDonald’s supply chain strategy also focuses on labor and social responsibility. The company ensures fair and ethical treatment of workers throughout its supply chain, including supplier factories and farms. Understanding their commitment to labor rights and social responsibility will show their dedication to creating a positive impact beyond just business operations.

Collaboration and Partnerships

McDonald’s has built their successful supply chain on the basis of fostering strong collaborations and partnerships with franchisees, suppliers, stakeholders, and communities. From engaging stakeholders, to working closely with suppliers on production and demand, to working with franchisees to support their success, McDonald’s exemplifies an ideal model of successful collaboration and partnership.

1. Franchisee Relationships

McDonald’s operates on a franchise model, which requires strong collaboration and partnerships with its franchisees. The company fosters franchisee relationships, including supply chain collaboration, training programs, and shared goals. Exploring their collaborative approach will showcase the importance of a cohesive network in executing McDonald’s supply chain strategy.

2. Collaborative Planning with Suppliers

Collaborative planning with suppliers is crucial to McDonald’s supply chain strategy. The company works closely with suppliers to optimize production schedules, manage demand fluctuations, and drive continuous improvement. Understanding their collaborative planning processes will provide insights into their ability to adapt to market dynamics and ensure smooth operations.

3. Engaging Stakeholders

Engaging stakeholders is essential for the success of any supply chain strategy. McDonald’s recognizes the significance of fostering positive relationships with various stakeholders, including suppliers, customers, employees, and communities. The company actively engages stakeholders through transparent communication, social initiatives, and community partnerships. Discovering their stakeholder engagement practices will showcase their commitment to building strong relationships beyond the traditional supply chain.

Challenges and Future Trends

The global supply chain landscape is becoming increasingly complex as companies face new challenges due to changing consumer preferences, geopolitical risks, and technological advancements. McDonald’s is no exception to this complexity and has to navigate these issues while adapting their supply chain strategy to an ever-evolving market.

1 . Global Supply Chain Complexity

Operating a global supply chain comes with its fair share of challenges. McDonald’s faces complexities, including managing diverse regulations, cultural differences, and geopolitical risks. The company tackles these challenges and adapts to the evolving global landscape.

2 . Changing Consumer Preferences

Consumer preferences and trends constantly evolve, presenting challenges and opportunities for McDonald’s supply chain strategy. The company navigates changing consumer demands, including the rise of healthier food options, customization, and digitalization. Understanding their approach to consumer preferences will highlight their agility in adapting to market shifts.

3 . Technological Advancements and Adaptation

The supply chain industry is experiencing rapid technological advancements. We will explore how McDonald’s embraces emerging technologies such as blockchain , the Internet of Things (IoT) , and artificial intelligence (AI) to enhance their supply chain operations. Discovering their technological adaptations will showcase their ability to stay at the forefront of innovation.

Streamline Your Food Supply Chain with DFreight

Harness the power of digital freight forwarder DFreight and its online platform and mobile app to improve overall efficiency, reduce risk, and enhance traceability in your food supply chain. With DFreight, you can quickly access accurate and up-to-date product and shipment information to ensure your food deliveries arrive on time, every time. Unlock the potential of your food supply chain and take the hassle out of transporting food with DFreight today.

What factors should I consider when selecting a food provider for my supply chain?

When selecting a food provider for your supply chain, you should consider the provider’s quality standards, sustainability practices, transportation capabilities, pricing, customer service and availability. Additionally, be sure to evaluate their ability to meet your order requirements in a timely manner.

How can I improve the efficiency of my food supply chain?

You can improve the efficiency of your food supply chain by leveraging digital freight forwarding services to streamline the ordering and delivery process, monitor transportation processes, track inventories, and forge partnerships with suppliers for better food availability. Additionally, digital freight forwarding enables businesses to access lower-cost, more reliable transport options while optimizing supply chain visibility and control.

How is McDonald’s supply chain structured?

At the top of McDonald’s supply chain is an international network of strategic partnerships with various suppliers that are responsible for providing raw ingredients such as beef, potatoes, and eggs, as well as other finished products. Products are typically sent to McDonald’s regional distribution centers, which then send the products to franchised locations.

How does McDonald’s ensure food safety in their supply chain?

McDonald’s ensures food safety in its supply chain by evaluating food vendors and partners, maintaining strict food safety protocols and testing, and conducting regular quality and safety inspections. Additionally, the company has a traceability system to guarantee accountability and transparency when sourcing, manufacturing, and preparing foods.

What steps has McDonald’s taken to improve its supply chain strategy?

McDonald’s has taken a number of steps to improve its supply chain strategy, including expanding its use of third-party logistics providers, implementing automated ordering and delivery systems, partnering with suppliers to reduce waste, and leveraging new technologies to optimize operations.

Air transportation is a convenient and fast way to move cargo and is suitable for small and large companies as well as individuals. You Might Also Like

Commodities

Most Popular

The Amazing Supply Chain of McDonald’s: A case study

Most people know Mcdonald’s as a fast food restaurant, but not many people know about the fantastic supply chain managemen t that keeps it running. This blog post will explore how McDonald’s manages its supply chain. You will also learn how this ties in with online management courses offered by IIM Kozhikode . Here are critical strategies behind McDonald’s supply chain and how it contributes to creating one of the world’s most popular fast food chains.

The Strategy Behind McDonald’s Supply Chain Success

McDonald’s has long been hailed as a supply chain management success story. The company’s supply chain is a well-oiled machine that efficiently delivers burgers and fries to its customers around the globe. McDonald’s has achieved this success through careful strategic planning and execution. Here are two critical insights behind their supply chain:

Optimizing Relationships with Suppliers in the Long Term

In order to have a successful business, it is essential to have positive relationships with your suppliers. By optimising these relationships, you can ensure that you are getting the best possible products and services from your vendors, which can, in turn, help improve your bottom line. McDonald’s did this successfully by offering value to its long-term suppliers to ensure that both grow together mutually, making it a staple part of supply chain management . This differs from traditional supply chain models, wherein the two parties exchange values. 

For instance, The Martin-Brower Company has been supplying napkins to McDonald’s restaurants since 1956. What started as a simple partnership with one restaurant in Des Plaines, Iowa, is now a super-beneficial long-term partnership as the company now supplies napkins to over 15,000 McDonald’s restaurants all across North America.

Full Control of Supply Chain via Vertical Integration

McDonald’s has been studied intensively in supply chain management courses and has vertically integrated its supply chain since the early 1990s. By owning more supply chain elements, McDonald’s has more control over its product quality and cost. By owning livestock farms, McDonald’s can better control its beef patties. And by operating its own distribution centres, McDonald’s can deliver food to restaurants faster and at a lower cost.

Vertical integration has helped McDonald’s keep a tight grip on its costs. By controlling more of the supply chain, McDonald’s can reduce waste and inefficiencies. For example, by owning livestock farms, McDonald’s can avoid the volatility of meat prices. 

Therefore, the company is now involved in almost all stages of the supply chain instead of traditional restaurants, wherein the eatery is only the tip of the chain. Looking at its success, it’s no surprise that their case study is an integral part of many online management courses .

Future Supply Chain Plans For McDonald’s

As the world’s largest restaurant chain, McDonald’s constantly innovates its supply chain to keep up with customer demand. The company plans to further streamline its supply chain in the future to provide even faster service and fresher food. Here are two ways the fast-food giant is planning to achieve the same:

Pledging Towards Sustainability

The fast food industry has been under immense pressure to become more sustainable in recent years. One of the most iconic brands in fast food, McDonald’s, has made huge strides in this area in recent years. In 2015, they set a goal to source all their fibre-based packaging from recycled or certified sources by 2025. They’ve also pledged to reduce their greenhouse gas emissions by 2030 as per the 1.5°C climate scenario pathway for their supplier, restaurants and offices. To ensure this, the company has partnered with a few reputable environmental organisations, such as the Forest Stewardship Council (FSC) and the Program for the Endorsement of Forest Certification (PEFC).

Integrating Drive-Thru With AI

In recent years, McDonald’s has been working on integrating artificial intelligence (AI) into its drive-thru experience. The goal is to provide customers with a more personalised experience and increase accuracy and efficiency. McDonald’s promises this innovation by partnering with an Israel-based AI company known as Dynamic Yield. Apart from better automation, AI will also increase the accuracy of real-time suggestions by analyzing the past ordering trends of its customers. McDonald’s is also testing AI-enabled ordering kiosks in the US. So far, McDonald’s has found that AI can help improve orders’ accuracy and reduce waiting times. The company is still working on ways to use AI to further personalize the customer experience.

How Can Advanced Supply Chain Management and Role of Analytics Program Offer Similar Insights?

Advanced supply chain management and analytics program, offered by IIM Kozhikode can offer similar insights into how a company operates. With ever-changing industrial trends, it is vital to remain on top of supply chain management , as it impacts customer satisfaction as well as the profit margins of an organisation. Thus, by using the latest technologies to leverage supply chains, like McDonald’s has done and continues to do, you can take away key insights to boost any organisation’s supply chain. This online management course does this by integrating basics such as what is supply chain management with various analytic tools such as Descriptive Analysis, Cognitive Analysis, Prescriptive Analysis, and more.

The McDonald’s supply chain is indeed a fascinating and well-oiled machine. From the humble beginnings of one man’s fast food restaurant to a global empire supplying millions of customers daily, the supply chain has had to adapt and evolve to meet the demands of a growing business. By joining the Advanced Supply Chain Management and Role of Analytics Program offered by IIM Kozhikode , you can also learn key industrial insights on supply chain management .

Leave a Comment Cancel reply

Save my name, email, and website in this browser for the next time I comment.

Fill the form to get more information.

• I agree to the Terms and Conditions of this website.
• I agree to be contacted by Jaro Education representatives for information about programs and courses.
• I agree for Jaro Education to send me offers and promotional materials.

Popular courses

Admission open.

Chief Product Officer Programme (CPOP) – IIM Indore

• Duration: 8 Months
• Application Closure Date: 31st October 2024

Post Graduate Certificate Programme in General Management – IIM Nagpur

• Duration: 12 Months
• Application Closure Date: 30th October, 2024

• New Age Management Programme for Senior Professionals IIM Kozhikode
• Duration: 10 Months
• Application Closure Date: 30th October 2024

Long Duration Certification Programs

• Professional Certificate Programme in Strategic Management IIM Kozhikode
• Post Graduate Certificate Programme in Digital Strategy and Marketing Analytics - IIM Nagpur
• Professional Certificate Programme in Data Science for Business Decisions – IIM Kozhikode
• Post Graduate Certificate Programme in Banking and Finance - IIM Trichy
• Post Graduate Certificate Programme in General Management - IIM Nagpur
• Post Graduate Certificate Programme in Supply Chain Operations & Analytics (SCOA) - IIM Nagpur
• Accelerated General Management Programme - IIM Ahmedabad
• Executive Post Graduate Certificate Program in General Management - IIM Visakhapatnam
• Post Graduate Certificate Programme in Financial Technologies (FinTech) - IIM Nagpur
• Post Graduate Certificate Programme in Executive General Management (EGMP) - IIM Tiruchirappalli
• PG Certificate Programme in Cyber Security Management and Data Science Programme by - IIM Nagpur

Online Bachelors Degree Programs

• Online BCA - Manipal University, Jaipur
• Online BBA- Manipal University, Jaipur
• Online BBA Degree Program-Dr D. Y. Patil Vidyapeeth Pune
• Online B.Com- Manipal University, Jaipur

Doctoral Programs

• Doctor Of Business Administration (DBA)-Swiss School of Management Switzerland

Online Masters Degree and PG Programs

• Online MBA – Dr. D. Y. Patil Vidyapeeth
• Online MBA – Manipal University, Jaipur
• Online MBA Degree Programme Symbiosis School for Online and Digital Learning (SSODL)
• Online Master of Business Administration Chandigarh University
• Executive MBA Dayananda Sagar University
• Online Master of Science (Data Science) Symbiosis School for Online and Digital Learning (SSODL)
• Online Master of Science (Economics) Symbiosis School for Online and Digital Learning (SSODL)
• Online M.Sc. (Computer Applications) Symbiosis School for Online and Digital Learning (SSODL)
• Online Master of Arts (Mass Communication) Symbiosis School for Online and Digital Learning (SSODL)
• Hybrid PGDM – WeSchool
• Online MCA Programme – Manipal University Jaipur
• Online PGDM Program – Loyola Institute of Business Administration (LIBA)

Trending Programs

• Doctorate & Phd Courses
• Online MBA Courses
• Online PG Programs
• Online UG Programs
• Finance Programs
• International Programs
• Analytics & Data Science Programs
• Management & Leadership Programs

Short Duration Certification Programs

• Certificate Programme in Digital VLSI Design Programme by CEP, IIT Delhi
• Executive Programme in Operations Management and Analytics – IIT Delhi
• Post Graduate Certificate Programme in Applied Data Science & AI - IIT Roorkee
• Professional Certificate Programme in Digital Marketing for Performance & Growth - IIM Kozhikode
• Executive Certificate Programme in Advanced Project Management and Analytics - IIM MUMBAI
• Executive Programme in Business Finance - IIM Ahmedabad

Fulltime Masters and PG Programs

• MBA Program in Real Estate - Niranjan Hiranandani School of Real Estate - HSNC University
• About Jaro Education
• Student Grievance Redressal
• Terms of Use

Trending PG & UG Programs

• Online Mcom
• Online Bcom

In-Demand MBA Courses

• MBA in Finance
• MBA in Marketing
• MBA in Human Resource Management
• MBA in Systems & Operations
• MBA Project Management
• MBA in Business Analytics
• Free Courses
• Free Bootcapms
• Jaro Connect

AI Powered Tool

• ROI Calculator
• Skill Gap Calculator

Discover More

• Our Partners
• Career at Jaro
• Student Help Desk

Copyright © 2022 Jaro Education. All rights reserved.

Coming Soon

The Recipe to McDonald’s Supply Chain Success

The McDonald’s franchise is revered as having one of the most successful supply chains in the world, holding top positions in Gartner’s Supply Chain rankings  for several consecutive years. In 2018, the fast-food chain was  inducted into the Gartner’s ‘Masters’ category , which recognizes global leaders in supply chain management, joining other supply chain giants, such as Amazon, P&G, and Apple.

The key to McDonald’s success is its skillful orchestration and execution of processes across a vast network of suppliers, service providers, and franchise owners. This achievement is made all the more impressive considering the fast-food chain caters to approximately 69 million customers daily in over 37,000 restaurants across 100 countries.

While McDonald’s supply chain and logistics management systems have been duplicated by other franchises, no one has been able to knock the fast-food chain out of the top spot. 

The Secret Sauce in McDonald’s Supply Chain

Maximizing long-term supplier relationships.

McDonald’s logistics and supply chain success rely heavily on long-term strategies established by Ray Kroc, one of the pioneers of the fast-food giant. Kroc’s approach, which is still the foundation of McDonald’s operations today, is based on a simple win-win strategy for all parties involved.

This model, which McDonald’s calls the 3-legged stool , is focused on achieving mutual positive outcomes for franchisees, suppliers, and employees. In other words, when the company succeeds, its suppliers succeed. Both McDonald’s and its suppliers help create value for each other rather than simply exchanging value, leading to more beneficial, long-term partnerships.

McDonalds largest distributor, The Martin-Brower Company, for example, began by supplying paper napkins to the company’s Des Plaines, Illinois branch in 1956. Today, the supplier delivers supplies to almost all 15,000 McDonald’s locations in North America.

Responding to Modern Consumer Demands

The demand for fresh foods and transparency is rising among modern consumers.  Research  shows that millennial consumers are willing to pay more for fresh foods that are organic, sustainable, and healthy.

In a move that has been seismic for the fast-food chain, McDonald’s is rolling out fresh, never frozen beef patties , gradually doing away with frozen burgers, and upending a decades-old supply chain in the process.

The transformation comes as part of the company’s plan to revitalize its image. In early 2018, McDonald’s announced that it would be testing the adoption of fresh patties at 300 of its U.S. locations. By July 2019, the fast-food company had recorded a gain in market share for the first time in five years, buoyed by its switch to fresh beef in its signature Quarter Pounder burgers.

Utilizing Effective Vertical Integration

Vertical integration is a manufacturing model in which companies control more than one stage of the supply chain. This approach, if done correctly, can increase supply chain efficiency, reduce product costs, and increase profits.

Unlike most restaurants, which pay higher costs to source ingredients from third-party suppliers, McDonald’s is the source of its products. Through partnerships with contracted producers, McDonald’s processes its own meat, grows its own potatoes, and transports its own materials. Furthermore, the company also owns most of the land on which its restaurants are built, thus reducing or eliminating costs associated with leasing or renting property.  

By taking full control of the component and distribution elements of the supply chain, the company delivers products to its restaurants at a lower cost. The use of these vertical integration techniques is the primary reason why McDonald’s is one of the cheapest fast-food chains in the world.

Looking to the Future of McDonald’s

Environmental sustainability.

81% of global consumers believe that companies should take measures to improve the environment, while 85% of millennials believe that it is ‘extremely’ or ‘very’ important that companies implement programs to do so, according to a  report from Nielson Holdings.

In light of this staggering data, McDonald’s announced that it would be taking steps to implement sustainable packaging in all its restaurants over the next several years. According to the company, by 2025, 100% of the fast-food chain’s guest packaging will be sourced from renewable, recycled, or certified sources.

To achieve this, McDonald’s partnered with environmental organizations, like the Forest Stewardship Council (FSC) and the Program for the Endorsement of Forest Certification (PEFC), to ensure that all raw materials used in its packaging come from well-managed sources.

Another measure taken by the company in its push toward environmental sustainability is the goal to recycle guest packaging in all of its restaurant locations by 2025. The company has pledged to work with its employees, franchise owners, and local government agencies to help support the development of the necessary recycling infrastructure at its restaurants.

Reengineering the Drive-thru

By integrating technology into its operations, McDonald’s seeks to transform a service that it helped popularize – the drive-thru. In March 2019, the company announced that it acquired Dynamic Yield , an Israel-based company focused on personalization and decision logic. Through this acquisition, McDonald’s is planning to use artificial intelligence (AI) to automate its drive-thru menus.

This AI integration is set to take personalization to the next level with automated systems that can make real-time menu recommendations based on consumer trends, ordering habits, and even weather conditions.

In a bid to further automate its drive-thru, McDonald’s also acquired Apprente , a Silicon Valley company founded in 2017. The company will use Apprente’s speech recognition AI to understand drive-thru orders. McDonald’s also plans to use this technology in its self-order kiosks and mobile applications.

According to the company, the use of AI technology will help reduce service times, making the ordering process more efficient and improving the overall customer experience. This technology can also be used to provide the company with valuable analytical data, which it can use to improve supply chain operations and strategic decision-making.

2 From Tree to Pancake: The Maple Syrup Supply Chain

3 Honda Reimagines EV Approach in Ohio Factory Overhaul

4 Nuro Driver: An Advanced AI-Powered Autonomy Platform

5 Siemens Mobility to Open First U.S. High-Speed Rail Production Factory

Don't miss tomorrow's supply chain industry news

Let Supply Chain Dive's free newsletter keep you informed, straight from your inbox.

• Daily Dive M-F
• Operations Weekly Every Tuesday
• Procurement Weekly Every Thursday
• Logistics Weekly Every Wednesday

McDonald's case study shows the virtues of horizontal supply chains

Dive brief:.

• For the sixth year in a row, McDonald's was awarded with a top 10 spot in Gartner's Supply Chain Top 25, securing the second-best spot for the third year in a row. The reason, Supply Chain 247  reports, is the company's horizontal (or "system") model wherein everyone, including suppliers, succeed. 
• One of McDonald's main supply chain tenets is to focus on the end-product, rather than the process of production, meaning that while quality and other standards must be met, the supplier is empowered to determine the methods employed to do so.
• Agreeing on measurable outcomes is another requirement for doing things the McDonald's way.  As one of the three legs of the McDonald's operational stool, suppliers know they're valued as contributors to the system — which emphasizes offering the exact same product worldwide.  

Dive Insight:

As consumer and regulatory standards increase, companies from Nike to CVS are trying to take control of their supply chain to improve oversight and synergies. But the McDonald's case study shows, sometimes, operating a fully horizontal supply chain is more effective, assuming positive relationships with suppliers.

So the merit lies not just with McDonald's as a company, but also with its supply chain partners. A fully horizontal supply chain means supplier-buyer relationships are key, and McDonald's has shown utmost trust in its partners over the years.

An article examining McDonald's supply chain practices reveals the company responded to a wave of negative documentaries, like "Fast Food Nation" and "Super Size Me," by increasing the transparency in its supply chain. By tapping into its close ties with its suppliers, the company was able to weather the storm of poor publicity by revealing the veracity of its products: beef was beef, after all. It also produced a campaign called "Our Food/Your Questions," meant to further promote its certainty in its own products.

Because of the long-standing and close relationships the company establishes, it was able to demonstrate with confidence that its practices were sound and its sources fair and reliable. And while the health aspect of its products remains disputable, the success of its transparency, demonstrated by the confidence it showed in revealing its sources, does not.

Recommended Reading

Supply Chain Dive news delivered to your inbox

Get the free daily newsletter read by industry experts

• Select Newsletter: Daily Dive M-F
• Select Newsletter: Operations Weekly Every Tuesday
• Select Newsletter: Procurement Weekly Every Thursday
• Select Newsletter: Logistics Weekly Every Wednesday
• Select user consent: By signing up to receive our newsletter, you agree to our Terms of Use and Privacy Policy . You can unsubscribe at anytime.

Editors' picks

Bernd von Jutrczenka/Picture-Alliance/DPA/AP

What’s behind the unsettling rise in ocean rates?

A blend of congestion and blank sailings stemming from the Red Sea crisis has created an unpredictable environment for shippers.

Sriracha shortage: Supply chain woes strike Huy Fong Foods again

The popular hot-sauce maker has notified wholesalers of a production halt that will last for months, citing issues with the chile crop this year.

Company Announcements

Walmart beefs up automated grocery distribution network

The retail giant is opening five new high-tech perishable sorting and packaging centers, while upgrading four others and retrofitting another.

Levi Strauss moves away from insourced logistics network

The retailer’s shift to a hybrid model that includes 3PLs intends to cut costs and grow its direct-to-consumer channels.

• Biden-Harris administration takes aim at de minimis exemption By Philip Neuffer
• Biden finalizes China tariff hikes By Kate Magill
• Maple syrup production to ‘bounce back’ after devastating season By Leah Borts-Kuperman
• La-Z-Boy streamlines supply chain with Mexico consolidation By Kelly Stroh

McDonald’s Secret Sauce for Supply Chain Success

Cite this chapter.

• Kate Vitasek ,
• Karl Manrodt &
• Jeanne Kling  

249 Accesses

Last but not least. Governance may be the last of the Vested Five Rules, but it is perhaps the most important. Following the first four rules helps you get to a good agreement—but you have to manage it. If you do not manage it well, the consequences are costly. In fact, leading industry research found that poor governance can erode up to 90 percent of anticipated value. 1

None of us is as good as all of us. —Ray Kroc

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save.

• Get 10 units per month
• Download Article/Chapter or eBook
• 1 Unit = 1 Article or 1 Chapter
• Cancel anytime
• Available as PDF
• Read on any device
• Instant download
• Own it forever
• Durable hardcover edition
• Dispatched in 3 to 5 business days
• Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Unable to display preview.  Download preview PDF.

Ian R. MacNeil, Contracts: Instruments for Social Cooperation (South Hackensack, NJ: F. B. Rothman, 1968).

Google Scholar  

O. E. Williamson, “Outsourcing: Transaction Cost Economics and Supply Chain Management,” Journal of Supply Chain Management 44, no. 2 (2008): 5–16. Blackwell Publishing Inc. Retrieved from http://doi.wiley.com /10.1111/j.1745-493X.2008.00051.x.

Article   Google Scholar  

John F. Love, McDonald’s: Behind the Golden Arches, rev. ed. (New York: Bantam Books, 1995), relates the widespread practice of the chain restaurant business during the 1950s. It concludes: “Having captive licensees as guaranteed buyers, franchisers needed to do little else than sit back and collect money.”

Peter Eisler, Blake Morrison, and Anthony DeBarros, “Fast-Food Standards for Meat Top Those for School Lunches,” USA Today , December 9, 2009, http://www.usatoday.com /news/education/2009-12-08-school-lunch-standards_N.htm.

Download references

You can also search for this author in PubMed   Google Scholar

Copyright information

© 2012 Kate Vitasek and Karl Manrodt

About this chapter

Vitasek, K., Manrodt, K., Kling, J. (2012). McDonald’s Secret Sauce for Supply Chain Success. In: Vested. Palgrave Macmillan, New York. https://doi.org/10.1007/978-1-137-51190-4_6

Download citation

DOI : https://doi.org/10.1007/978-1-137-51190-4_6

Publisher Name : Palgrave Macmillan, New York

Print ISBN : 978-0-230-34170-8

Online ISBN : 978-1-137-51190-4

eBook Packages : Palgrave History Collection History (R0)

Share this chapter

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Publish with us

Policies and ethics

• Find a journal
• Track your research

About Stanford GSB

• The Leadership
• Dean’s Updates
• School News & History
• Commencement
• Business, Government & Society
• Centers & Institutes
• Center for Entrepreneurial Studies
• Center for Social Innovation
• Stanford Seed

About the Experience

• Learning at Stanford GSB
• Experiential Learning
• Guest Speakers
• Entrepreneurship
• Social Innovation
• Communication
• Life at Stanford GSB
• Collaborative Environment
• Activities & Organizations
• Student Services
• Housing Options
• International Students

Full-Time Degree Programs

• Why Stanford MBA
• Academic Experience
• Financial Aid
• Why Stanford MSx
• Research Fellows Program
• See All Programs

Non-Degree & Certificate Programs

• Executive Education
• Stanford Executive Program
• Programs for Organizations
• The Difference
• Online Programs
• Stanford LEAD
• Seed Transformation Program
• Aspire Program
• Seed Spark Program
• Faculty Profiles
• Academic Areas
• Awards & Honors
• Conferences

Faculty Research

• Publications
• Working Papers
• Case Studies

Research Hub

• Research Labs & Initiatives
• Business Library
• Data, Analytics & Research Computing
• Behavioral Lab

Research Labs

• Cities, Housing & Society Lab
• Golub Capital Social Impact Lab

Research Initiatives

• Corporate Governance Research Initiative
• Corporations and Society Initiative
• Policy and Innovation Initiative
• Rapid Decarbonization Initiative
• Stanford Latino Entrepreneurship Initiative
• Value Chain Innovation Initiative
• Venture Capital Initiative
• Career & Success
• Climate & Sustainability
• Corporate Governance
• Culture & Society
• Finance & Investing
• Government & Politics
• Leadership & Management
• Markets and Trade
• Operations & Logistics
• Opportunity & Access
• Technology & AI
• Opinion & Analysis
• Email Newsletter

Welcome, Alumni

• Communities
• Digital Communities & Tools
• Regional Chapters
• Women’s Programs
• Identity Chapters
• Find Your Reunion
• Career Resources
• Job Search Resources
• Career & Life Transitions
• Programs & Webinars
• Career Video Library
• Alumni Education
• Research Resources
• Volunteering
• Alumni News
• Class Notes
• Alumni Voices
• Contact Alumni Relations
• Upcoming Events

Admission Events & Information Sessions

• MBA Program
• MSx Program
• PhD Program
• Alumni Events
• All Other Events
• Operations, Information & Technology
• Organizational Behavior
• Political Economy
• Classical Liberalism
• The Eddie Lunch
• Accounting Summer Camp
• California Econometrics Conference
• California Quantitative Marketing PhD Conference
• California School Conference
• China India Insights Conference
• Homo economicus, Evolving
• Political Economics (2023–24)
• Scaling Geologic Storage of CO2 (2023–24)
• A Resilient Pacific: Building Connections, Envisioning Solutions
• Adaptation and Innovation
• Changing Climate
• Civil Society
• Climate Impact Summit
• Climate Science
• Corporate Carbon Disclosures
• Earth’s Seafloor
• Environmental Justice
• Operations and Information Technology
• Organizations
• Sustainability Reporting and Control
• Taking the Pulse of the Planet
• Urban Infrastructure
• Watershed Restoration
• Junior Faculty Workshop on Financial Regulation and Banking
• Ken Singleton Celebration
• Marketing Camp
• Quantitative Marketing PhD Alumni Conference
• Presentations
• Theory and Inference in Accounting Research
• Stanford Closer Look Series
• Quick Guides
• Core Concepts
• Journal Articles
• Glossary of Terms
• Faculty & Staff
• Subscribe to Corporate Governance Emails
• Researchers & Students
• Research Approach
• Charitable Giving
• Financial Health
• Government Services
• Workers & Careers
• Short Course
• Adaptive & Iterative Experimentation
• Incentive Design
• Social Sciences & Behavioral Nudges
• Bandit Experiment Application
• Conferences & Events
• Get Involved
• Reading Materials
• Teaching & Curriculum
• Energy Entrepreneurship
• Faculty & Affiliates
• SOLE Report
• Responsible Supply Chains
• Current Study Usage
• Pre-Registration Information
• Participate in a Study

McDonald's India: Optimizing the French Fries Supply Chain

• See the Current DEI Report
• Supporting Data
• Research & Insights
• Share Your Thoughts
• Search Fund Primer
• Affiliated Faculty
• Faculty Advisors
• Louis W. Foster Resource Center
• Defining Social Innovation
• Impact Compass
• Global Health Innovation Insights
• Faculty Affiliates
• Student Awards & Certificates
• Changemakers
• Dean Jonathan Levin
• Dean Garth Saloner
• Dean Robert Joss
• Dean Michael Spence
• Dean Robert Jaedicke
• Dean Rene McPherson
• Dean Arjay Miller
• Dean Ernest Arbuckle
• Dean Jacob Hugh Jackson
• Dean Willard Hotchkiss
• Faculty in Memoriam
• Stanford GSB Firsts
• Annual Alumni Dinner
• Class of 2024 Candidates
• Certificate & Award Recipients
• Dean’s Remarks
• Keynote Address
• Teaching Approach
• Analysis and Measurement of Impact
• The Corporate Entrepreneur: Startup in a Grown-Up Enterprise
• Data-Driven Impact
• Designing Experiments for Impact
• Digital Marketing
• The Founder’s Right Hand
• Marketing for Measurable Change
• Product Management
• Public Policy Lab: Financial Challenges Facing US Cities
• Public Policy Lab: Homelessness in California
• Lab Features
• Curricular Integration
• View From The Top
• Formation of New Ventures
• Managing Growing Enterprises
• Startup Garage
• Explore Beyond the Classroom
• Stanford Venture Studio
• Summer Program
• Workshops & Events
• The Five Lenses of Entrepreneurship
• Leadership Labs
• Executive Challenge
• Arbuckle Leadership Fellows Program
• Selection Process
• Training Schedule
• Time Commitment
• Learning Expectations
• Post-Training Opportunities
• Who Should Apply
• Introductory T-Groups
• Leadership for Society Program
• Certificate
• 2024 Awardees
• 2023 Awardees
• 2022 Awardees
• 2021 Awardees
• 2020 Awardees
• 2019 Awardees
• 2018 Awardees
• Social Management Immersion Fund
• Stanford Impact Founder Fellowships
• Stanford Impact Leader Prizes
• Social Entrepreneurship
• Stanford GSB Impact Fund
• Economic Development
• Energy & Environment
• Stanford GSB Residences
• Environmental Leadership
• Stanford GSB Artwork
• A Closer Look
• California & the Bay Area
• Voices of Stanford GSB
• Business & Beneficial Technology
• Business & Sustainability
• Business & Free Markets
• Business, Government, and Society Forum
• Second Year
• Global Experiences
• JD/MBA Joint Degree
• MA Education/MBA Joint Degree
• MD/MBA Dual Degree
• MPP/MBA Joint Degree
• MS Computer Science/MBA Joint Degree
• MS Electrical Engineering/MBA Joint Degree
• MS Environment and Resources (E-IPER)/MBA Joint Degree
• Academic Calendar
• Clubs & Activities
• LGBTQ+ Students
• Military Veterans
• Minorities & People of Color
• Partners & Families
• Students with Disabilities
• Student Support
• Residential Life
• Student Voices
• MBA Alumni Voices
• A Week in the Life
• Career Support
• Employment Outcomes
• Cost of Attendance
• Knight-Hennessy Scholars Program
• Yellow Ribbon Program
• BOLD Fellows Fund
• Application Process
• Loan Forgiveness
• Contact the Financial Aid Office
• Evaluation Criteria
• GMAT & GRE
• English Language Proficiency
• Personal Information, Activities & Awards
• Professional Experience
• Letters of Recommendation
• Optional Short Answer Questions
• Application Fee
• Reapplication
• Deferred Enrollment
• Joint & Dual Degrees
• Entering Class Profile
• Event Schedule
• Ambassadors
• New & Noteworthy
• Ask a Question
• See Why Stanford MSx
• Is MSx Right for You?
• MSx Stories
• Leadership Development
• How You Will Learn
• Admission Events
• Personal Information
• GMAT, GRE & EA
• English Proficiency Tests
• Career Change
• Career Advancement
• Career Support and Resources
• Daycare, Schools & Camps
• U.S. Citizens and Permanent Residents
• Requirements
• Requirements: Behavioral
• Requirements: Quantitative
• Requirements: Macro
• Requirements: Micro
• Annual Evaluations
• Field Examination
• Research Activities
• Research Papers
• Dissertation
• Oral Examination
• Current Students
• Education & CV
• International Applicants
• Statement of Purpose
• Reapplicants
• Application Fee Waiver
• Deadline & Decisions
• Job Market Candidates
• Academic Placements
• Stay in Touch
• Faculty Mentors
• Current Fellows
• Standard Track
• Fellowship & Benefits
• Group Enrollment
• Program Formats
• Developing a Program
• Diversity & Inclusion
• Strategic Transformation
• Program Experience
• Contact Client Services
• Campus Experience
• Live Online Experience
• Silicon Valley & Bay Area
• Digital Credentials
• Faculty Spotlights
• Participant Spotlights
• Eligibility
• International Participants
• Stanford Ignite
• Frequently Asked Questions
• Founding Donors
• Program Contacts
• Location Information
• Participant Profile
• Network Membership
• Program Impact
• Collaborators
• Entrepreneur Profiles
• Company Spotlights
• Seed Transformation Network
• Responsibilities
• Current Coaches
• How to Apply
• Meet the Consultants
• Meet the Interns
• Intern Profiles
• Collaborate
• Research Library
• News & Insights
• Databases & Datasets
• Research Guides
• Consultations
• Research Workshops
• Career Research
• Research Data Services
• Course Reserves
• Course Research Guides
• Material Loan Periods
• Fines & Other Charges
• Document Delivery
• Interlibrary Loan
• Equipment Checkout
• Print & Scan
• MBA & MSx Students
• PhD Students
• Other Stanford Students
• Faculty Assistants
• Research Assistants
• Stanford GSB Alumni
• Telling Our Story
• Staff Directory
• Site Registration
• Alumni Directory
• Alumni Email
• Privacy Settings & My Profile
• Event Registration Help
• Success Stories
• The Story of Circles
• Support Women’s Circles
• Stanford Women on Boards Initiative
• Alumnae Spotlights
• Insights & Research
• Industry & Professional
• Entrepreneurial Commitment Group
• Recent Alumni
• Half-Century Club
• Fall Reunions
• Spring Reunions
• MBA 25th Reunion
• Half-Century Club Reunion
• Faculty Lectures
• Ernest C. Arbuckle Award
• Alison Elliott Exceptional Achievement Award
• ENCORE Award
• Excellence in Leadership Award
• John W. Gardner Volunteer Leadership Award
• Robert K. Jaedicke Faculty Award
• Jack McDonald Military Service Appreciation Award
• Jerry I. Porras Latino Leadership Award
• Tapestry Award
• Student & Alumni Events
• Executive Recruiters
• Interviewing
• Land the Perfect Job with LinkedIn
• Negotiating
• Elevator Pitch
• Email Best Practices
• Resumes & Cover Letters
• Self-Assessment
• Whitney Birdwell Ball
• Margaret Brooks
• Bryn Panee Burkhart
• Margaret Chan
• Ricki Frankel
• Peter Gandolfo
• Cindy W. Greig
• Natalie Guillen
• Carly Janson
• Sloan Klein
• Sherri Appel Lassila
• Stuart Meyer
• Tanisha Parrish
• Virginia Roberson
• Philippe Taieb
• Michael Takagawa
• Terra Winston
• Johanna Wise
• Debbie Wolter
• Rebecca Zucker
• Complimentary Coaching
• Changing Careers
• Work-Life Integration
• Career Breaks
• Flexible Work
• Encore Careers
• Join a Board
• D&B Hoovers
• Data Axle (ReferenceUSA)
• EBSCO Business Source
• Global Newsstream
• Market Share Reporter
• ProQuest One Business
• RKMA Market Research Handbook Series
• Student Clubs
• Entrepreneurial Students
• Stanford GSB Trust
• Alumni Community
• How to Volunteer
• Springboard Sessions
• Consulting Projects
• 2020 – 2029
• 2010 – 2019
• 2000 – 2009
• 1990 – 1999
• 1980 – 1989
• 1970 – 1979
• 1960 – 1969
• 1950 – 1959
• 1940 – 1949
• Service Areas
• ACT History
• ACT Awards Celebration
• ACT Governance Structure
• Building Leadership for ACT
• Individual Leadership Positions
• Leadership Role Overview
• Purpose of the ACT Management Board
• Contact ACT
• Business & Nonprofit Communities
• Reunion Volunteers
• Ways to Give
• Fiscal Year Report
• Business School Fund Leadership Council
• Planned Giving Options
• Planned Giving Benefits
• Planned Gifts and Reunions
• Legacy Partners
• Giving News & Stories
• Giving Deadlines
• Development Staff
• Submit Class Notes
• Class Secretaries
• Board of Directors
• Health Care
• Sustainability
• Class Takeaways
• All Else Equal: Making Better Decisions
• If/Then: Business, Leadership, Society
• Grit & Growth
• Think Fast, Talk Smart
• Spring 2022
• Spring 2021
• Autumn 2020
• Summer 2020
• Winter 2020
• In the Media
• For Journalists
• DCI Fellows
• Other Auditors
• Academic Calendar & Deadlines
• Course Materials
• Entrepreneurial Resources
• Campus Drive Grove
• Campus Drive Lawn
• CEMEX Auditorium
• King Community Court
• Seawell Family Boardroom
• Stanford GSB Bowl
• Stanford Investors Common
• Town Square
• Vidalakis Courtyard
• Vidalakis Dining Hall
• Catering Services
• Policies & Guidelines
• Reservations
• Contact Faculty Recruiting
• Lecturer Positions
• Postdoctoral Positions
• Accommodations
• CMC-Managed Interviews
• Recruiter-Managed Interviews
• Virtual Interviews
• Campus & Virtual
• Search for Candidates
• Think Globally
• Recruiting Calendar
• Recruiting Policies
• Full-Time Employment
• Summer Employment
• Entrepreneurial Summer Program
• Global Management Immersion Experience
• Social-Purpose Summer Internships
• Process Overview
• Project Types
• Client Eligibility Criteria
• Client Screening
• ACT Leadership
• Social Innovation & Nonprofit Management Resources
• Develop Your Organization’s Talent
• Centers & Initiatives
• Student Fellowships

• Technical Support
• Find My Rep

You are here

The Sage website, including online ordering services, may be unavailable due to system maintenance on September 13th and September 14th between 6:00 pm and 12:30 pm PDT. If you need assistance, please  visit our Contact us page for further information. 

Thank you for your patience and we apologise for the inconvenience.

Supply Chain Management Case Study 2

• Case 2: McDonald’s Reinvents Itself Again

Share this activity with your students by simply copying and pasting the URL for this page into your LMS.   

• Time frame: Approximately 30 Minutes
• Setting : Online or face-to-face
• Source : Chapter 6 Demand Management and Customer Service from  Supply Chain Management   by Ray R. Venkataraman and Ozgun C. Demirag
• Recognize the factors that affect demand management. 
• Discuss the various issues to be addressed in managing consumer demand. 
• Discuss the importance of sustainability in the context of customer service.

Imagine yourself working as a business advisor for McDonalds

McDonald’s has never been content to sit back and wait for consumer tastes to change around it. Rather, the company continues to do what it can to shape the face of fast food and influence the marketplace with new offerings and other changes. In recent years, however, the drive by McDonald’s to reinvent itself has risen to another level in the face of stiff competition from healthier alternatives (Subway) and a general feeling by the public that major fast-food companies are not much different from one another in terms of their prices, quality, service levels, and product offerings. 

When fast food seemed synonymous with “greasy,” “overcooked,” and “fried,” McDonald’s changed things up with their healthy options menu, including wraps, grilled options instead of the production line fried foods, fresh fruit, and yogurt-based smoothies. These menu changes were doubly effective: They allowed McDonald’s to compete directly with other stores that promoted healthy alternatives, like Subway, and they took some of the rhetorical wind out of the sails of their harshest critics, including the San Francisco Board of Supervisors, who, in 2011, banned the inclusion of a toy in McDonald's Happy Meals®, claiming that the “pester power” of children could induce parents to buy these unhealthy lunch choices. McDonald’s response was twofold: Offer healthy options like milk and apple slices in Happy Meals®, and instead of eliminating the toys, McDonald’s charged 10 cents for the addition of a toy, with the proceeds benefiting the Ronald McDonald House. 

McDonald’s continues to set the pace in the fast-food industry. When competitors offer their own healthy menus, they are often seen as simply copying and therefore acknowledging the prescience of McDonald's in staying ahead of the consumer trend curve. The fast-food industry has been the butt of jokes and held up to general disapproval for a number of years due to charges that it offers increasingly poor choices to patrons who don’t know any better. Unlike some competitors who seem content to keep their menus unchanged and their products unhealthy, McDonald’s has been doing what is necessary to change who they are, reinvent themselves, and keep their fingers firmly on the pulse of their international customer base.

Recently, McDonald’s has been focusing on investing in technology to drive sales growth, especially in the area of digital sales. The company has been installing digital self-order kiosks in their restaurants and expanding food delivery. McDonald’s has also been ramping up its tech-focused investments. In 2019 alone, the company acquired Apprente, a Silicon Valley company using artificial intelligence to automate drive-thru orders, and Dynamic Yield, a company that specializes in decision logic technology. CEO Chris Kempczinski emphasizes the importance of technology shaping the company’s strategy in 2020 and beyond: “Digital is transforming global retail, and it will transform McDonald’s.

Share Your Insights

• In your opinion, what is the future of fast food around the world? Are consumer taste changes and concerns about healthy eating likely to diminish the demand for fast food? 
• How would you evaluate the reinvention strategy used by McDonald's? Do the changes represent a fundamental shift in the company’s competitive model, or are they cosmetic? 
• If McDonald’s hired you to advise it with regard to future trends and the changes it should consider, what would you suggest? Defend your suggestions. 
• Research the current state of McDonald’s. What are the areas in which the company plans to reinvent itself in the coming years, particularly in light of the appointment of its new CEO, Chris Kempczinski (November 2019), and the COVID-19 pandemic?

Learn more about Supply Chain Management :

Supply Chain Management

• Case 1: Rising Health Care Costs
• College Publishing Offerings
• Digital Solutions for Your Course
• Research Methods, Statistics, and Evaluation Catalog
• Sign up to receive new content alerts and special offers

• Assess Risk
• Manage Risk
• Get Started

Towards Sustainable Sourcing

• Global Risks
• Our Analysis
• Case Studies

McDonald's

Prioritizing resources and concentrating efforts where they matter most

Prioritizes resources

Reveals risks and sustainability concerns

Identifies opportunities for greatest leverage

Improves engagement with supply chain partners

McDonald’s is making efforts to mainstream sustainability, including through goals to increase the amount of agricultural raw materials for its food and packaging products that come from sustainable sources.

In analyzing the environmental, social, economic and socio-political risks of four key commodities: beef; chicken; coffee; and oils, such as palm and canola, WWF’s Supply Risk Analysis helped identify the hotspots and potential risks to McDonald’s supply chain. While no one was surprised that beef landed at the top of the list, the assessment provided some important revelations if the company was to meet its goals.

One of the biggest was the potential for deforestation or impact on biodiversity associated with oils such as palm oil and feed for livestock.  What was once a minor ingredient  or an upstream issue, seeming out of the company’s concern and influence, suddenly became a part of the equation in managing risk and making progress in sustainable sourcing.

Identifying risks is only the start of the process for a company. Next steps could include joining roundtables, purchasing verified sustainable products, mapping their supply chain or working with their suppliers. McDonald’s, for example, is using its position as a large beef buyer to raise the profile of sustainable beef and is one of the leading champions for the Global Roundtable on Sustainable Beef.

“At McDonald’s, we aim to use our scale, scope and talent to make a positive difference for children, families, communities, and the planet,” says Francesca, McDonald’s Corporate Vice President of Worldwide Supply Chain Management, “WWF’s Supply Risk Analysis Tool has helped us focus our efforts on areas where we can have a real influence.”

• Terms & Privacy

• Corpus ID: 168541405

A Case Study on Mcdonald's Supply-chain in India

• Kshitiz Sharma
• Published 2013
• Asia Pacific Journal Of Marketing and Management Review

Tables from this paper

9 Citations

Global marketing strategies of mcdonald’s corporation (with reference to india and russia), consumer’s perception for various products of mcdonald’s and its supply chain in varanasi district of u.p., a structured-literature-review of the supply chain practices in dairy industry, determination of priority supply chain distribution using dematel method in instant noodle company, analytical review of bullwhip effect in manufacturing and services supply chain: analyzing how workload creates bullwhip in service sector, innovative practices in supply chain management and their contributions to reduce the environmental impact.

• Highly Influenced

Investigating the Factors Causing Price Differences from Country to Country

Troubling muddy waters: problematizing reflective practice in global medical education, applications of big data analytics: a boon for the food industry, 2 references, related papers.

Showing 1 through 3 of 0 Related Papers

McDonald’s Operation Management & Supply Chain

Table of Contents

Introduction

McDonald’s, the world’s leading fast-food chain, is a testament to the pivotal role of operations management in achieving business success. Founded in 1940 by Dick and Mac McDonald and later revolutionized by Ray Kroc, McDonald’s has grown from a single restaurant in California to a global franchise with approximately 30,000 outlets in over 120 countries. This remarkable expansion is largely attributed to McDonald’s strategic approach to operations management, focusing on efficiency, quality, and customer satisfaction. This case study explores McDonald’s operations management, highlighting its supply chain, global business strategy, production processes, commitment to quality, and inventory methodologies.

Supply Chain Excellence

McDonald’s supply chain is intricately designed to ensure the timely delivery of high-quality raw materials at competitive prices. The “three-legged stool” model, comprising the corporation, suppliers, and operators, forms the backbone of McDonald’s supply chain strategy. This model emphasizes close collaboration and mutual success among all parties involved, ensuring that McDonald’s restaurants worldwide receive the necessary ingredients to maintain product consistency and quality.

Strategic Global Business Approach

McDonald’s global business strategy is centered on providing value, enhancing nutritional options, and ensuring customer satisfaction. The company’s competitive edge is maintained through a focus on speed, cost, and nutrition. McDonald’s has successfully adapted its menu to cater to varying tastes and dietary preferences across different regions, demonstrating its commitment to meeting diverse customer needs.

Operational Efficiency and Production Process

The efficiency of McDonald’s operations is evident in its streamlined production process, which utilizes advanced technology for order processing and inventory management. The “Made for You” system, for example, exemplifies McDonald’s dedication to providing fast, accurate, and customized service. Additionally, McDonald’s leverages the internet for marketing, promotions, and enhancing customer interaction, further optimizing its operations.

Unwavering Commitment to Quality

Quality is paramount at McDonald’s. The company’s rigorous quality control measures, including daily food safety checks and periodic corporate inspections, ensure that customers enjoy safe and high-quality meals. McDonald’s also employs the “five Ps” policy (people, product, place, promotion, price) to uphold its standards of excellence in every aspect of its operations.

Innovative Inventory Management

McDonald’s employs a First-In-First-Out (FIFO) inventory management approach, particularly suitable for handling perishable items. This method, coupled with advanced inventory tracking systems, enables McDonald’s to efficiently manage stock levels, reduce waste, and ensure the freshness of its ingredients.

Leadership and Expansion into New Markets

The leadership structure at McDonald’s, with the CEO at the helm, followed by departmental managers, ensures cohesive and effective management across the organization. McDonald’s continuous exploration of new markets, especially in Asia and Europe, is driven by its robust strategy that encompasses financial, customer, learning, and internal process dimensions.

McDonald’s success story is a clear illustration of how effective operations management can propel a company to global leadership in its industry. Through strategic supply chain management, commitment to quality, operational efficiency, and adaptive business strategies, McDonald’s has not only sustained its market dominance but has also set a benchmark for excellence in the fast-food industry. The McDonald’s case underscores the importance of operations management in achieving and maintaining a competitive edge in a dynamic global market.

Reference List

McDonald’s. (2022). Our purpose & impact. McDonald’s. Web.

WBR Insights. (2023). McDonald’s successful rollout of mobile ordering and self-serve kiosks across the US. Future Stories.

Heizer, J. (2022).  Sustainability and supply Chain  (14th ed.). Pearson.

Recent Posts

• Lewis and Clark Expedition Essay
• Abraham Lincoln Against Slavery Essay
• The Three Main Causes of Great Depression Essay
• Virginia colony and the Massachusetts Bay colony Essay
• The 1992 Los Angeles Riots Essay
• The Cold War: US Foreign Policy Essay
• Imperialism vs. Anti-Imperialism in American History Essay
• Analysis of Statue Liberty History and Sense Essay
• Prohibition and the Rise of Organized Crime Essay
• Voices of Freedom Compare & Contrast Essay
• The Progressive Era History Essay
• The Spanish American War Essay
• The Emancipation Proclamation and US Economics Essay
• Industrialization and Imperialism in America Essay
• Decolonization Process Analysis Essay
• The Battle of the Alamo Analytical Essay
• Cause and Effects of The Great Depression Essay
• United States of America Essay
• Effective Questioning in the Classroom Essay
• Seven Learning Styles Explained Research Paper

Popular Posts

• Add or Remove an Instagram Account From Your Facebook Page
• Multi Store Connect
• New Instagram API (by June 29, 2020!)
• How to update your email or password
• Grid View for Soldsie Mobile?
• What is Soldsie?
• Getting Started with Soldsie
• Changing Your Connected Instagram Account
• How to Add and Schedule Posts (Desktop)
• Customizing Your Feed
• Custom UTM Tracking
• Conversion Tracking for Soldsie
• Shopify Integration for Soldsie
• How to Import Products
• Scheduling Video Posts with Soldsie
• How to Customize Your Soldsie URL
• Embedding Your Soldsie Feed On Your Website (Beta)
• Soldsie and Email List Sign Ups
• 4 Examples of The Best Mobile Marketing Campaigns
• 6 Product Photography Tips for Instagram
• Company Analysis
• Entrepreneurship
• Knowledge Center
• Social Issue

Asking the better questions that unlock new answers to the working world's most complex issues.

Trending topics

AI insights

EY podcasts

EY webcasts

Operations leaders

Technology leaders

Marketing and growth leaders

Cybersecurity and privacy leaders

Risk leaders

EY Center for Board Matters

EY helps clients create long-term value for all stakeholders. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate.

• 5||See all Assurance

Artificial Intelligence (AI)

Strategy, transaction and transformation consulting

Technology transformation

Tax function operations

Climate change and sustainability services

EY Ecosystems

Supply chain and operations

EY Partner Ecosystem

Explore Services

We bring together extraordinary people, like you, to build a better working world.

• 1||More about what you can do here
• 2||More about what it's like to work here
• 3||More about how to join us
• 4||More about job search

Experienced professionals

MBA and advanced-degree students

Student and entry level programs

Contract workers

EY-Parthenon careers

Discover how EY insights and services are helping to reframe the future of your industry.

Case studies

How Microsoft built a new mobility model for cross-border talent

14 May 2024 Gerard Osei Bonsu

Private equity

How GenAI is empowering talent at a PE-backed consumer brand

09 May 2024 EY

Strategy transactions

How carve-outs positioned an automotive giant for future growth

12 Apr 2024 EY

At EY, our purpose is building a better working world. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets.

EY congratulates the 23 founders chosen for the EY Entrepreneurial Winning Women™ North America Class of 2024

11 Sep 2024 EY Americas

NASCIO and EY US study reveals majority of states lack data quality programs to support GenAI-ready data

10 Sep 2024 Jennifer Hemmerdinger

EY Mobility Consumer Index shows US less likely to purchase an EV than last year and compared to global consumers

09 Sep 2024 EY Americas

No results have been found

Recent Searches

CIO Survey: will you set the GenAI agenda or follow the leaders?

Get insights on how CIOs will address the challenges and capture the full benefits of GenAI in the 2024 EY CIO Sentiment Survey.

How a flexible supply chain raised the bar for the beverage industry

The client’s goal: better accommodate future growth, predict customer demands, and add agility to inventory and production lines. Learn how we did it.

How can your business go from competitive to cutting edge?

Learn how the EY-Microsoft Alliance delivers AI driven strategies and smart business solutions using cloud technology.

Select your location

Why a reinvented supply chain tastes good to Ajinomoto Foods

Through holistic digital transformation, Ajinomoto Foods North America is saving money and time while getting better results for consumers.

• 1. Better question
• 2. Better answer
• 3. Better working world

How EY can help

The better the question

How can a food producer harvest gains with optimized logistics?

Ajinomoto Foods North America transforms its supply chain through a logistics and operations overhaul.

In today’s rapidly evolving digital world, most executives recognize the importance of embracing digital change; however, new capabilities are often added cautiously and modestly, favoring the enhancement of existing operations over a complete business overhaul.

That has not been the case at Ajinomoto Foods North America (AFNA), which creates and markets foods and spices for consumers under brands such as Ajinomoto, Tai Pei, José Olé and Hondashi. During the COVID-19 pandemic and its aftershocks, executives at AFNA were forced to confront a landscape of disruption: whiplashing consumer preferences, supply chain disruptions, and rising freight and warehousing costs. Understandably, they were initially focused on getting through the crisis — yet instead of trying to achieve “back to normal,” they aspired to transform not just one initiative or one function, but the entire organization.

At the beginning, supply chain consultants with Ernst & Young LLP (EY) conducted “art of the possible” sessions around generating revenue, avoiding costs and saving in supply chain planning. That led to a supply chain assessment that showed great potential for improvement within logistics, adding technology and digital support for greater inventory visibility and optimal deployment, with near-real-time tracking and carrier oversight. New transportation management infrastructure would help build multi-stop and multimodal shipments, auto-select the right carriers, and address cost distribution and invoice verification.

And that was only the beginning of a three-year journey founded on value and trust. Today, AFNA has evolved its supply chain from end to end, making it the standout region for the global Ajinomoto parent company, based in Japan. From planning to logistics, processes have been streamlined and automated wherever possible, digital capabilities have been enabled, and now artificial intelligence (AI) and machine learning are redefining what’s possible, holistically introduced through the lenses of people, process and technology.

“AFNA’s optimized supply chain can now do much more — and do it faster,” said Srini Muthusrinivasan, EY Technology Leader. “EY was pleased to assist AFNA throughout their logistics transformation and believes the savings and efficiencies achieved will resonate for the organization long into the future.”

The better the answer

A digitized supply chain delivers products and service more effectively

AFNA optimizes its logistics with innovative technology to better serve thousands of locations.

As the COVID-19 pandemic abated, AFNA faced increasing freight and warehousing costs, adding urgency to the project. Executives were looking to lower inventory while improving service and reducing the cost to serve. With those goals in mind, EY’s digital efforts with AFNA spanned the entire supply chain , broadly encompassing:

• Inventory optimization, with plans for deployment based on each product, distribution center, weekly forecast, production schedules, inventory policies and consumer requirements
• Planning that responds to production output compared against the plan and deployment recommendations adjusted accordingly, if necessary
• Load building with recommendations for optimal shipments based on parameters such as weight, pallet, volume and inventory position/requirements
• Process improvement centered on inventory management, order management, demand planning, and sales and operation execution design and implementation

EY first signed on to help achieve quick wins in distribution resource planning and develop a roadmap for a long-term transportation transformation. An initial logistics assessment identified opportunities to reduce costs and improve operations through Blue Yonder , an EY alliance partner whose software synchronizes forecasting and planning to warehousing, transportation and order fulfillment. The deployment was significant, involving over 550 finished goods produced at nine plants and over 25 co-packers, to 34 distribution centers that serve about 1,300 ship-to-customer locations.

Blue Yonder, based in the cloud, works seamlessly with AFNA systems while bringing a consumer products sector focus through templates. It helps plan how products should be sent to each distribution center or warehouse to meet consumer demand, and from there, shipments are tracked until they arrive at each grocery store. The EY team’s experience helped fast-track implementations with an eye toward the entire supply chain while standardizing processes.

Along the multiyear journey with AFNA, EY consultants notched quick wins — for instance, by realigning warehouses to customer demand better. And to right-size inventory, our consultants brought in policies we’ve defined based on real-world engagements with some of the world’s biggest companies, including a nine-point segmentation plan.

Success built upon success along the way, and another quick win focused on acquiring and locking in freight rates in softening truckload and intermodal markets. Just within trucking, EY recommendations consolidated the list of carriers AFNA was using from over 100 to 60 for outbound and inbound, a 40% reduction, which streamlined the distribution and receiving process for 9 AFNA plants, across over 1,000 transportation lanes and 20 co-packers.

The most recent logistics transformation achievement for AFNA involved upgrading its transportation management system with an innovative database management platform through which the company could better manage data, plan orders and shipments, audit and pay invoices, and analyze performance with metrics. AFNA had been using emails and PDFs in its logistics, but through an electronic document interface the company gained a seamless, trackable system for internal and vendor communications, and EY helped onboard carriers to the system.

Casting aside its spreadsheet-driven manual processes, AFNA gained a tremendous boost in productivity. Planners received an actionable dashboard of KPIs with one click instead of 20, improving their sales and operations execution, and saving a tremendous amount of time. The team had always been in reaction mode based on two weeks of orders. Now, they are equipped with a system that automatically recommends where to deploy products — based on business-defined rules, prioritized by customer orders and accounting for forecast demand — with complete visibility into customer preference changes and recommendations. Creating deployment orders now require just one quick approval click.

“Packing recommendations and load consolidations no longer rely on guesswork, because automation accounts for physical dimensions and weight,” said one logistics coordinator. “Building my loads today took me 3.5 hours instead of 2 days; that’s a lot of time saved in my day I can use to pack more loads and boost my productivity.”

Today, warehouse recurring fees and costs to redeploy products to other distribution centers have been slashed by up to 50%. Inventory write-offs have dropped by up to 40%, while on-time delivery performance has climbed. AFNA is now more likely to have the right product, at the right place, at the right time, which ultimately helps the organization serve their valuable consumers even better.

The better the world works

Empowered employees carry AFNA into the future of sustainable foods

Cost savings can be put toward new innovations to create lasting change for customers.

To date, EY has helped AFNA save about $40 million, with an additional $23 million estimated through April 2026, across every functional area touching the supply chain, from planning to logistics.

To sustain the change in ANFA’s newly modernized logistics infrastructure, EY hosted train-the-trainers and created employee playbooks so that employees across the organization adopted the new technology platform and ways of working. Thousands participated, which drove alignment from the bottom up and further enabled AFNA to optimize their operations across freight, delivery and sales — all through the power of their people.

“While technology played a key role, it is to AFNA leadership’s credit that they recognized how people, process and technology interplayed, and how advancements in one domain can be carried forward into another,” said Oksana Chausova, the EY Coordinating Partner for AFNA. “Their supply chain is on its way to becoming best in class thanks to their improved systems and empowered employees, and the global Ajinomoto organization is seeing improvements that could be replicated across their other regions.”

The evolution for AFNA continues. The organization’s upgraded transportation management system (TMS) can now better manage data, orders, shipments, tracking and payment, which has freed up resources for AFNA to invest in new AI innovations and capabilities , which will help the company become even more self-sufficient in areas such as route optimization, metrics tracking, food production and processing.

“Thanks to our logistics transformation with EY, AFNA is now better prepared for the future because we have digitized our planning and operating model so we can effectively get our sustainable products to market,” said Gema Verdin, Ajinomoto Foods Global VP of Supply Chain Management Planning. “Our newly modernized supply chain brings us one step closer to achieving our mission to help customers ‘eat well and live well.’”

Sustainability and ESG

Sustainability is everybody’s business. Explore EY insights to see how your business can reframe sustainability to protect and create new sources of value.

EY Supply Chain Transformation solution

Discover how EY's Supply Chain Transformation solution can help your business move towards fully autonomous, connected supply chains that drive business growth.

Ashutosh Dekhne

Gaurav Malhotra

Explore our case study library

EY Consulting case studies are a window into how we work alongside our clients to deliver strategic, sustainable growth.

• Connect with us
• Our locations
• Do Not Sell or Share My Personal Information
• Legal and privacy
• Accessibility
• Open Facebook profile
• Open X profile
• Open LinkedIn profile
• Open Youtube profile

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

Digitala Vetenskapliga Arkivet

• Supply chain management in practice: a case study of McDonald’s Sweden
• CSV all metadata
• CSV all metadata version 2
• modern-language-association-8th-edition
• Other style
• Other locale

Fristedt, Mårten

Hansson, andreas, huge-brodin, maria, rehme, jakob, sandberg, erik, abstract [en].

Although much discussed in theory, supply chain management (SCM) is often problematic to carry out in practice. One exception is McDonald’s Sweden, which since its establishment has worked with suppliers and restaurants (franchisees) in a way that reminds of what SCM literature recommends. The purpose of this report is to describe and analyse the supply chain of McDonald’s Sweden from suppliers to franchisees.

Based on interviews with McDonald’s Sweden, suppliers and franchisees, McDonald’s supply chain is described and analysed according to SCM literature. Cooper and Ellram’s (1993) framework of SCM characteristics is used complemented with several other writers.

The study describes a supply chain where its members to a large extent collaborate as described in SCM literature. The report identifies and describes how significant SCM characteristics, such as information sharing, joint planning, and the sharing of risks and rewards are managed in the case. Finally, the report identifies market saturation and the search for economies of scale outside the primary supply chain as a challenge for future SCM practices. The case constitutes an interesting showcase where the ways in which the studied features are managed can inspire others businesses in succeeding in SCM.

Abstract [sv]

Trots att supply chain management (SCM) är väl diskuterat i teorin så är det ofta problematiskt att genomföra i praktiken. Ett undantag är McDonalds Sverige, som sedan starten arbetat med leverantörer och restauranger (franchisetagare) på ett sätt som påminner om vad litteratur inom SCM rekommenderar. Syftet med denna rapport är att beskriva och analysera McDonalds Sveriges supply chain från leverantörer till franchisetagare.

Baserat på intervjuer med McDonalds Sverige, leverantörer och franchisetagare är McDonalds försörjningskedja beskriven och analyserad utifrån SCM-litteratur. Cooper och Ellrams (1993) teorier inom SCM och dess olika egenskaper används kompletterat med flera andra författare.

Studien beskriver en försörjningskedja där medlemmarna i stor utsträckning samarbetar enligt SCM-litteraturen. I rapporten identifieras och beskrivs hur viktiga egenskaper inom SCM, såsom utbyte av information, gemensam planering och riskdelning hanteras. Slutligen identifierar rapporten marknadsmättnad och sökandet efter stordriftsfördelar utanför den primära försörjningskedjan som en utmaning för framtida SCM-praxis. Studien hur SCM fungerar i praktiken och kan inspirera andra företag i att lyckas inom området.

Place, publisher, year, edition, pages

Keywords [en], national category, identifiers, open access in diva, file information, other links, search in diva, by author/editor, by organisation, on the subject, search outside of diva, altmetric score.

Pardon Our Interruption

As you were browsing something about your browser made us think you were a bot. There are a few reasons this might happen:

• You've disabled JavaScript in your web browser.
• You're a power user moving through this website with super-human speed.
• You've disabled cookies in your web browser.
• A third-party browser plugin, such as Ghostery or NoScript, is preventing JavaScript from running. Additional information is available in this support article .

To regain access, please make sure that cookies and JavaScript are enabled before reloading the page.

How PwC Unlocked End-to-End Supply Chain Value for Halcor

Operating on a global scale, PwC is recognised as one of the world’s Big Four consulting firms, specialising in audit and assurance, tax and advisory. 

It’s in the latter realm that PwC Greece – part of the organisation’s global network – was primed and ready to carry out end-to-end supply chain diagnostics for Halcor, the copper and alloys extrusion division of ElvalHalcor.

Having outlined areas in which Halcor’s supply chain had potential to transform, PwC has continued to work on a variety of different projects and engagements.

Explaining the partnership’s evolution, Mata Chatzicharalampous, Director Supply Chain at PwC, says: “It started with diagnostics for a problem that Halcor couldn’t quantify. They asked us to provide some insights, data and expertise in certain domains across the supply chain spectrum. 

“Every time we touched on a specific area, there was another step to take. We’ve covered the entire supply chain: planning, production, shop floor, proliferation of the portfolio, uniqueness of the market – and there’s more to come.”

Why select PwC?

PwC competed with numerous other consulting firms in Greece to win Halcor’s business. 

What enabled the company to stand out was its deep expertise and wide range of capabilities within the supply chain domain, while offering a competitive price. 

“One concern Halcor had is that consulting firms have a tendency to strategise without going into detail,” explains Athanasios Spanos, Partner at PwC specialising in supply chain.

“The synthesis within our team meant we could be very pragmatic in our approach, offering tangible benefits with a clear roadmap as to how to achieve and unlock value.”

What also stood out from the get-go was PwC Greece’s use of data analytics, with Athanasios taking responsibility for the firm’s data analytics and AI hub. 

“It’s something that, as a supply chain capability, differentiates us – especially in Greece,” continues Eleni Papandreou, Project Manager for Supply Chain at PwC. “This was another enabler for us to deliver a high-quality service.”

She adds: “Our approach was very hands-on but holistic. We studied Halcor’s supply chain end to end, from production and logistics all the way through to commercial and customer-service departments, taking all parameters into consideration.”

Host of benefits for Halcor

PwC Greece’s approach when starting a supply chain consultancy project is to identify quick wins that can be implemented while more strategic recommendations are being designed. 

Among a host of immediate benefits being enjoyed by Halcor is the fostering of a continuous improvement culture, a reduction in dispatching lead times and increased readiness for future projects thanks to value stream mapping. 

In the long-term, PwC is providing recommendations aimed at enhancing operational efficiencies, such as fine-tuning changeovers within the plant operation to increase machine hours. 

“We covered the whole spectrum, from strategic thinking as to where you want to go with your supply chain and what you will gain, all the way to a tactical level – how to achieve those benefits on a day-to-day basis,” says Athanasios. 

Looking ahead, Mata concludes: “Next, we want to capitalise on our work with Halcor to make sure we see long-term value from our partnership. In that sense we will come together as one team and work towards the same goal.”

Read the full report HERE.

**************

Make sure you check out the latest edition of Supply Chain Digital Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE 2024

Supply Chain Digital is a BizClik brand ​​​​​​​

• How PwC Unlocked End-to-End Supply Chain Value for Halcor Digital Supply Chain
• How is GM Integrating Sustainability into its Supply Chain? Sustainability
• SAP’s Darcy MacClaren: How AI will impact 2024 Technology
• Sanofi and Marken transform the healthcare supply chain

Featured Articles

Deutsche bahn to sell db schenker to dsv in us$15.8bn deal.

DSV's agreement to buy DB Schenker from Deutsche Bahn forms part of its ambitious plans to create a global market leader in transport and logistics …

P&SC LIVE: The Must-Attend Industry Event- 2 Weeks to Go

Join the leading global summit in London for a comprehensive exploration of procurement and supply chain innovations, strategies, and technologies …

Uber Freight’s Bid to Advance End-to-End Logistics

Uber Freight's latest advancements include a strategic integration with Uber Direct, modular TMS functionality and flexible procurement software …

INVERTO: Red Sea Crisis Forces Christmas Retail Rethink

Major procurement & supply chain speakers at p&sc live.

• Exciting Additions to Procurement & Supply Chain LIVE
• Bayer: Modernising its End-to-End Global Logistics Operation
• P&SC LIVE: Only Four Weeks to go
• Procurement & Supply Chain LIVE London – CPD Accredited
• Analysing Transit Time Delays Along Key Global Trade Routes

Sustainable Packaging in Logistics and Supply Chains

At the heart of the supply chain , the quest for sustainable solutions has become imperative. Sustainable packaging has become one of the most important factors for consideration.

What is sustainable packaging and how can it truly transform your supply chain ?

This article will guide you step by step. Discover all the information related to sustainable packaging and the positive impacts its use can have on your supply chain.

I. What is sustainable packaging?

Sustainable packaging is designed with the environment in mind.

Eco-design is a design approach that integrates environmental considerations throughout the product development process.

This method aims to minimise the product’s environmental impact , from its design to its end of life, taking into account the different stages of the product life cycle (manufacturing, distribution, consumption, recycling, etc.).

Sustainable packaging allows:

• Optimisation of resources;
• Minimisation of greenhouse gas emissions;
• Reduction of energy consumption;
• Limitation of waste production.

Eco-design is an approach that also integrates social concerns, such as the health and safety of workers involved in the project.

As you may have gathered, sustainable packaging fulfils user needs while also reducing its environmental footprint!

II. The different types of sustainable packaging for your supply chain

A. reusable packaging.

Sustainable packaging can be reusable.

This refers to all packaging that can be repaired, cleaned, and used multiple times.

To use sustainable packaging, you must implement an effective maintenance system within your supply chain for the inspection and cleaning of your packaging, unless you choose to collaborate with a supplier who takes care of the maintenance of your packaging as part of their service.

Some examples:

• Wooden pallets offer unparalleled properties of robustness and repairability. LPR is committed to responsible and sustainable wood sourcing, with PEFC certification . At LPR, pallets collected at the end of the chain are reintegrated into the fleet, then maintained and repaired. They undergo multiple rotations and are used until the end of their life cycle. Pallet pooling like this reduces the environmental impact of the supply chain.
• Reusable plastic or metal crates and containers , which can be cleaned and used multiple times, thereby reducing the use of single-use packaging.

To learn more: 4 expert tips for optimising the management of reusable packaging

B. Recyclable packaging

Not all packaging can necessarily be reused. However, some can be recycled and used for other purposes. This includes:

• Cardboard Packaging : Cardboard is widely used in the logistics sector and is found in various types of packaging. Both durable and lightweight, it can withstand a relatively heavy load, and it is easily recyclable. Made from wood fibres, cardboard is biodegradable.
• Kraft Packaging : Kraft is one of the most eco-friendly materials. It is frequently used to replace plastic bags in retail outlets. Made from water and wood, kraft is a biodegradable material that can withstand up to 7 kilograms.
• Plastic Packaging : Although not all types of plastic are recyclable, those made of PET are. A lightweight material that, once recycled, can be found in various everyday items
• Wooden Packaging : At LPR, pallets that are no longer repairable are recycled for other purposes. For example, pallets can be transformed into wood chips and converted into energy.

C. Smart packaging

Technologies such as sensors or RFID chips can be placed on packaging to enable their monitoring. These technologies help minimise the need for over-packaging by reducing the risks of damage and loss of packaging during transport.

Smart features like these can make packaging sustainable by improving their reusability.

——-

Now that you’re aware of all the sustainable packaging solutions at your disposal for you and your supply chain, make sure to consider:

• the specific characteristics of the goods you transport (weight, storage conditions);
• the logistical constraints of your supply chain (are your handling tools automated?);
• the sustainability goals set by your company (not all packaging solutions are equal in terms of reducing greenhouse gas emissions!).

III. How can sustainable packaging revolutionise your supply chain?

Beyond their ecological and responsible impact, sustainable packaging can bring other benefits to your supply chain.

By using sustainable packaging, you can:

A. Reduce the costs of your supply chain

By opting for reusable packaging, the purchase of single-use packaging is eliminated!

Through efficient management of maintenance and collection, the use of sustainable packaging allows you to achieve significant cost savings for your supply chain.

Used for managing all flows of goods, pallets are essential for the smooth operation of the supply chain.

By opting for a pallet rental and management system , you no longer need to invest in purchasing transport packaging.

At LPR – La Palette Rouge, our pallets have a lifespan of at least 7 years, and we manage them until the end of their life.

B. Enhance the performance of your supply chain

With sustainable packaging, you significantly reduce the waste generated by your supply chain and decrease your greenhouse gas emissions as a result.

This brings both ecological and strategic advantages: you no longer have to manage the procurement and disposal of your transportation and handling packaging.

C. Stand out from your competitors!

In recent years, sustainable packaging has been gaining more importance within companies’ supply chains.

This change is strongly influenced by increasingly numerous and strict regulations , but it is still far from being the norm.

Ecological packaging is an effective way to differentiate yourself from your competitors and to convince potential suppliers and clients who share your vision to collaborate with you.

In fact, common values are a vital step towards establishing a commercial relationship based on trust and loyalty, and they can sometimes make all the difference in a collaboration.

IV. Case study: red pallets, sustainable packaging

A. why are red pallets sustainable packaging.

At LPR, our pallets are sustainable packaging :

• Eco-designed pallets: LPR is committed to a responsible wood sourcing policy. 74% of the wood used for our pallets comes from sustainably managed forests. LPR’s approach is also PEFC certified.
• Reusable pallets: After use, our pallets are collected, inspected, cleaned, and repaired if necessary, before being reintroduced. Thanks to this circular process, our pallets have a lifespan of at least 7 years, significantly reducing the environmental impact associated with pallet production.
• Recyclable pallets: In cases where pallets can no longer be repaired and reused, they are recycled into sustainable energy. Even at the end of their cycle, our pallets make a positive contribution to the environment.

In comparison with normal pallet consumption outside of the pooling system, the pallet pooling model makes the supply chain more efficient and environmentally friendly!

B. The advantages of LPR pallet pooling

As you will have seen, at LPR, our pallets are not for sale.

• To fight against the purchase of single-use pallets and the waste of natural resources.
• To prevent pallets from being lost and damaged during the supply chain.
• To provide a quality, 100% outsourced service to players in the distribution and FMCG sectors.

Our method allows you to:

• Reduce or even eliminate the hidden costs of your supply chain, thanks to the elimination of investments in pallet purchases and the reduction in the management costs of used pallets.
• Optimise the management of your supply chain: No more dedicated storage space for dormant pallets, no more pallet collection and maintenance. Our European logistics network with our 32,000 collection points and our 135 service centres allows us to maintain proximity to all your sites, ensuring great responsiveness.
• Avoid interruptions in your supply chain: All pallets in our range are adapted to your automated handling systems, ensuring continuity in your logistics operations.

LPR also commits to optimising transport flows, working closely with our clients and partners to reduce empty kilometres. This approach is an integral part of our pooling services and contributes to its sustainability.

In conclusion, sustainable packaging is not only a response to environmental challenges, but it can also transform your supply chain!

LPR’s approach, with its eco-designed, reusable, and recyclable red pallets, demonstrates how a sustainable packaging policy can be effectively implemented.

Through pallet pooling, companies reduce their carbon footprint while improving the performance of their supply chain as a whole. They also achieve significant cost savings too.

Get in touch with LPR for support in managing your supply chain!

Ready to transform your supply chain with LPR - La Palette Rouge?

Let us help you find the best solution for your business.