MCDONALDS OPERATIONS

MANAGEMENT, QUALITY AND

BUSINESS COMPETITIVE
ADVANTAGE

CASE STUDY: MCDONALD

Design of Goods and Services

McDonalds goal in this strategic decision area of operations
management is to provide affordable products. As such, the serving
sizes and prices of its products are based on the most popular
consumer expectations. However, some McDonalds products are
minimized in size to make them more affordable.

Quality Management
The company aims to maximize product quality within constraints,
such as costs and price limits. McDonalds uses a production line
method to maintain product quality consistency. Consistency satisfies
consumers expectations about McDonalds and its brand in this
strategic decision area of operations management.

Process and Capacity Design

McDonalds process and capacity design is centered on efficiency for
cost-minimization that supports the companys strategies. This
strategic decision area of operations management focuses on
maintaining process efficiency and adequate capacity to fulfill market
demand. At McDonalds, the production line method maximizes
efficiency and capacity utilization.

Location Strategy
McDonalds goal in this strategic decision area of operations
management is to establish locations for maximum market reach.
McDonalds marketing mix includes restaurants, kiosks, and the
companys website and mobile app as venues. Through these
locations/venues, McDonalds reaches customers in traditional and
online ways.

Layout Design and Strategy

McDonalds uses practicality for this decision area of operations
management. The strategy involves maximizing space utilization in
restaurants and kiosks, rather than focusing on comfort and
spaciousness.
LOCATION STORE PIC PLEASE HD

Job Design and Human

Resources
McDonalds human resource strategies involve training for skills
needed in the production line in restaurant kitchens or production
areas. For this decision area of operations management, individual
and organizational learning are also emphasized to support
McDonalds organizational culture.
EVIDENCE CULTURE (EXPLAIN AND PIC)

Supply Chain Management

The firms global supply chain supports its various locations around
the world. McDonalds has a strategy of supply chain diversification
for this decision area of operations management. Such strategy
involves getting more suppliers from different regions to reduce
McDonalds supply chain risks.

Inventory Management
McDonalds goal for this strategic decision area of operations
management is to minimize inventory costs while supporting
restaurant operations. The company does not directly sell products
and ingredients to its restaurants. Instead, local and regional
intermediaries and distributors coordinate with McDonalds restaurant
managers to manage their inventory.

Scheduling
McDonalds uses corporate conventions for scheduling, based on local
market conditions and laws, as well as supply chain needs. For
example, the companys strategy involves regular and seasonal
schedules to address fluctuations in local market demand. Thus, in
this decision area of operations management, McDonalds is flexible
and adapts to local market conditions.

Maintenance
McDonalds lets restaurant managers or franchisees select
maintenance service providers. However, for kitchen/production
equipment, McDonalds Corporation also has certified/approved
maintenance providers. Thus, the company addresses this strategic
decision area of operations management through local and corporate
control.

Productivity at McDonalds
In the 10 strategic decisions of operations management, McDonalds
works toward maximum productivity in all of its business areas. The
following are some notable productivity measures or criteria used in
McDonalds business:
Order fulfillment rate (McDonalds restaurant productivity)
Stockout rate (Intermediary/distributor productivity)
Timely delivery rate (McDonalds delivery productivity)

References
Lawrence, K. D., & Weindling, J. I. (1980). Multiple goal operations management planning and decision
making in a quality control department. In Multiple Criteria Decision Making Theory and Application (pp.
203-217). Springer.
Liu, S., & Jiang, M. (2011). Providing Efficient Decision Support for Green Operations Management: An
Integrated Perspective. INTECH.
McDonalds Corporation Form 10-K 2014.
Najdawi, M. K., Chung, Q. B., & Salaheldin, S. I. (2008). Expert systems for strategic planning in operations
management: a framework for executive decisions. International Journal of Management and Decision
Making, 9(3), 310-327.
Schrunder, C. P., Galletly, J. E., & Bicheno, J. R. (1994). A fuzzy, knowledgebased decision support tool for
production operations management. Expert Systems, 11(1), 3-11.
Verdaasdonk, P. (1999). Defining an information structure to analyse resource spending changes of
operations management decisions. Production Planning & Control, 10(2), 162-174.
Wild, R. (1983). Decision-making in operations management. Management Decision, 21(1), 9-21.

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