Case Title: McDonalds India : Optimizing the French Fries Supply Chain

Date of Submission: 16th October (11.59 PM)

1. What were the pitfalls of the initial attempts by McDonald’s India to create its’
French fry supply chain? What were the critical factors that enabled McCain’s
success?

Ans

a. Pitfalls
 Lack of process grade potato, less than 1% of total potato production was
suitable for processing
 Lack of ideal climate conditions (soil, seeds, temperature, growing season,
harvesting season etc.), india has a growing season of 90-100 days as
opposed to 120 to 140 days during summers in US and Europe
 Outdated farming and irrigation practices
 Lack of cold storage and special controls for humidity and temperature to
maximize shelf life

JV between Lamb Weston and India-based Tarai Foods

Agricultural practices used by the JV were not successful in developing
the ideal potato that contained the right amount of solids and the desired
size
 The potato produced oily and limp fries
 Apply for the import license of fries, six months process, fries were added
to custom classification but with restriction on quantity (800MT) and high
import duties (56%)
 Long lead time of 60 days, 40 days shipping plus handling and custom
clearance
b. McCain’s success
 Studied the potato agronomy carefully
 Instead of importing potato, they resorted to potato germplasm to develop
the right variety of potato locally
 Cultivated potato seeds in high altitude, as these seeds had high vigor to
have higher yield and larger size
  Access to huge production capacity in partnership with Vista foods to test
other potato products like wedges and patties, gave enough potato
product volume to build up business with farmers
 Conducted experiments to find the ideal growing area, potato seed that
could yield the right variety of potato, management trials to identify the
best growing practices and storage trials to find the best storage protocol
 Real time demonstrations to farmers about the seeds to use, how to
improve yields through better sowing, drip irrigation and better
harvesting
 Potato sprout suppressant in combination with using controlled
temperature storage
 Subsidized drip/sprinkler irrigation system purchases by Gujarat
government

2. How did farmer collaboration and capability building help promote McDonald’s
growth and quality objectives?

Ans

 Collaborating with large number of farmers secured supply as even if one or

two farmers are not able to work, it won’t affect the supply
 Benefits to farmers:
o No more at the mercy of middlemen, mandi where prices could
fluctuate dramatically during harvesting season
o Guaranteed sales of farm output, an increase in yield of 30-40% as
compared to regular potatoes, reduction in operating cost, increased
and predictable farm income, reduction in consumption of natural
resources like water
o Trust
 As more and more French fries began to be processed locally, McD’s fries cost
declined, launched Extra Value meals which helped it improve its position as
an affordable meal destination, thereby increasing customer visits and avg
spend per visit
3. Under McCain’s management, the MacFry supply chain has been effective. What are
the risks of this model? How can McDonald’s address the competitive threats from
other firms moving in and capitalizing on the large investments of time and money
that McDonald’s has made?

 Shorter growing season in India as compared to US and Europe,


 Competitive threats:
o Get potato quality and farming methods patented
o Develop long term contracts with McCain
o

4. What are the options McDonald’s India can pursue to meet the huge growth in
demand that has been predicted in India? Is it better to push for 100% localization
using one supplier or to use a multi supplier strategy by continuing to import some
supply?
5. Would vertical integration strengthen McDonald's ability to have assured supply, or
weaken it?
 Heavy investments required in land, plant and equipment
 Lack of expertise in potato agronomy
 Lack of focus on core competencies
 Less control on business and quality

Case Title: Managing Innovation at Nypro, Inc

Date of Submission: 17th October (11.59 PM)

Case Questions:

1. What is the process employed at Nypro to identify and standardize upon

important innovations?
2. What are some of the basic beliefs of Mr. Lankton which are reflected in the
innovation management process at Nypro?
3. Assess the pros and cons of Nypro’s innovation cycle.
4. Which of the options Lankton should use to roll out the Novaplast technology?
a.