V McDonald·s Corporation: One of the

world·s most well-known and valuable

brands. 30,000 restaurants. 119 countries.
47 million customers every day
McDonald·s India: 54 restaurants. 2,000
employees. Serving 1.5 lakh customers every
Day.
 McDonald's is a fast food chain with restaurants all
over the world. It serves burgers and other fast food
customized to local tastes. Its philosophy has been
'one world, one burger;' which meant that the burger
must be consistent in terms of cost and quality. To
meet such high standards, it was essential to have an
excellent supply chain management system. In India,
McDonald's had a very well orchestrated supply
chain, called the 'Cold Chain'. The case study looks at
McDonald's supply chain management system in
India and discusses in detail its outsourcing
mechanism.
V McDonald's had been working critically on its
supply chain part. Considering, an
international brand trying to make inroads into
the Indian consciousness, its Indian supplier
partners were developed in such a manner that
made them stay with the company from the
beginning. For this purpose, it has developed
local Indian businesses, which can supply them
the highest quality products required for their
Indian operations.
V In the supply chain management, the
distribution centers hold special place for
bringing food right to the outlet counters. For
McDonald's India, the distribution centres
came in the following order: Noida and
Kalamboli (Mumbai) in 1996, Bangalore in
2004, and the latest one in Kolkata (2007).
V McDonald's entered its first distribution
partnership agreement with Radha Krishna
Foodland, a part of the Radha Krishna Group
engaged in food-related service businesses.
Better facilities and infrastructures were
created along with new systems by them to
satisfy McDonald's high demands, which
finally culminated into an agreement with
McDonald's India, for Radha Krishna Foodland
to serve as distribution centres for their
restaurants in Delhi and Mumbai.
V Ks distribution centres, the company was
responsible for procurement, the quality
inspection program, storage, inventory
management, deliveries to the restaurants and
data collection, recording and reporting. Value-
added services like shredding of lettuce, re-
packing of promotional items continued since
then at the centres playing a vital role in
maintaining the integrity of the products
throughout the entire 'cold chain'. The
operations and accounting is totally
transparent and is subject to regular audits.
V McDonald's worked aggressively to attain the
right suppliers and systems that ensured that
90 per cent of yield was indigenous before the
doors were opened to consumers. The only
products that they used to import were oil and
fries, for which they had made arrangements to
manufacture the oil in India. They ensured that
the products developed locally abide by global
McDonald's standards.
V r


 
V Trikaya Kgriculture, a major supplier of
iceberg lettuce to McDonald·s India, is one such
enterprise that is an intrinsic part of the cold
chain. Exposure to better agricultural
management practices and sharing of
advanced agricultural technology by
McDonald·s had made Trikaya Kgriculture
extremely conscious of delivering its products
with utmost care and quality.
V Initially lettuce could only be grown during the
winter months but with McDonald·s expertise
in the area of agriculture, Trikaya Farms in
Talegaon, Maharashtra, are now able to grow
this crop all the year round.
V McDonald·s had provided assistance in the
selection of high quality seeds, exposed the farms
to advanced drip-irrigation technology, and
helped develop a refrigerated transportation
system allowing a small agri-business in
Maharashtra to provide fresh, high-quality
lettuce to McDonald·s urban restaurant locations
thousands of kilometers away.
V ost harvest facilities at Trikaya include a cold chain
consisting of a pre-cooling room to remove field heat,
a large cold room and a refrigerated van for
transportation where the temperature and the
relative humidity of the crop is maintained between
1º C and 4º C and 95% respectively. Vegetables are
moved into the pre-cooling room within half an hour
of harvesting. The pre-cooling room ensures rapid
vacuum cooling to 2º C within 90 minutes. The pack
house, pre-cooling and cold room are located at the
farms itself, ensuring no delay between harvesting,
pre-cooling, packaging and cold storage.
V McDonald·s expertise in packaging, handling
and long-distance transportation had helped
Trikaya to do trial shipments to the Gulf
successfully. In addition to export, McDonald·s
assistance has enabled Trikaya Kgriculture to
supply this crop to a number of star-rated
hotels, clubs, flight kitchens and offshore
catering companies all over India.
V _
  

Vista rocessed Foods vt. Ltd., McDonald·s

suppliers for the chicken and vegetable range
of products, is another important player in this
cold chain. Technical and financial support
extended by OSI Industries Inc., USK and
McDonald·s India rivate Limited had enabled
Vista to set up world-class infrastructure and
support services.
V r



 
 

  
       

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V Îith continued assistance from its international
partners, Vista had installed hi-tech equipments
for both the chicken and vegetable processing
lines, which reflected the latest food processing
technology (de-boning, blending, forming, coating,
frying and freezing). For the vegetable range, the
latest vegetable mixers and blenders were in
operation. Klso, keeping cultural sensitivities in
mind, both processing lines were absolutely
segregated and utmost care was taken to ensure
that the vegetable products did not mix with the
non-vegetarian products.
V Vista is able to provide a very wide range of
frozen and nutritious chicken and vegetable
product. Ongoing R&D, both locally and in the
parent companies, work toward innovation in
taste, nutritional value and convenience.
Today, production of better quality frozen
foods that are both nutritious and fresh has
made Vista rocessed Foods vt. Ltd. K name
to reckon within the industry.
V ü#
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McDonald·s suppliers of cheese, Dynamix

Dairy, too, recognizing the need for quality
milk to make quality cheese, had set up a
dedicated quality program for milk
procurement. They made significant
investments in setting up bulk coolers at all
milk collection centres in the Baramati area,
where they are based.
V Efforts had been made to see that the bulk
cooling centres were located in a way that
farmers do not have to travel more than an
hour from their farms to reach the collection
centre. This has drastically reduced the time
from milking to refrigeration, which is critical,
especially since the lack of proper refrigeration
can greatly impact the quality of milk. On
receipt, the milk is immediately stored in the
bulk coolers at the collection centres, to prevent
growth of bacteria in the milk and preserve its
freshness ² thus, maintaining the ¶cold chain·
V  
% 


Cremica Industries was started in 1980 as small ice-cream

unit in Ludhiana. However after its initial success
Cremica added buns and biscuits to its product line and
in 1996 McDonald's selected Cremica to be its supplier
for buns, liquid condiments, batter and breading in
collaboration with its international partners. Cremica
Industries worked with another McDonald's supplier
from Europe to develop technology and expertise that
allowed the company to expand it business from baking
to providing breading and batters to McDonald's India
and other companies as well.
V 


Kmrit Foods, a division of Kmrit Banaspati,

has been associated with McDonald's India as a
supplier of Dairy Mixes, Soft Serve Mix and
Milk Shake Mix for over a decade now
V Suppliers are proclaimed to be the backbone of
any good business as they are the individual
units that build supply chain. On them
depends the health of the overall business
cycle.
V Benefit in McDonald·s favor was its expertise
in the areas of agriculture, which allowed it,
along with its suppliers, to work with farmers
in Ooty, une, Dehradun and other regions to
cultivate high quality iceberg lettuce
V There was substantial effort on sharing
advanced agricultural technology and expertise
with farmers/suppliers like utilization of drip
irrigation systems (for less water
consumption), better seeds and agricultural
management practices for greater yields.
V McDonald's incorporated state-of-the-art food
processing technology along with its
international suppliers to pioneering Indian
entrepreneurs.
V They had imparted technical training to all their
suppliers on operation the imported machineries,
educated them on the McDonald's philosophy of
Quality, Service, Cleanliness and Value (QSCV) in
order to provide standardized food to our customers.
V The 'cold chain', on which the McDonald·s
India had spent more than six years for setting
up the same in India, had brought about a
veritable revolution, immensely benefiting the
farmers at one end and enabling customers at
retail counters. McDonald's finding the factor
of cold room being vital ensured that even
before vegetables from farms entered the
refrigerated zones, they were locked in a pre-
cooling room to remove field heat. Vegetables
were placed in the pre-cooling room within
half an hour of harvesting where rapid cooling
decreased the field temperature of vegetables
to 2ºC within 90 minutes.
V Then a large cold room (a refrigerated van) was
used for transportation to the distribution
centers. In the van, the temperature and
relative humidity of crop was maintained at
1-4ºC and 95 per cent, respectively and the
flavors and freshness are locked at -35°C.
V Kt the suppliers' level, care was taken to guard
against any possible contamination or
interruption in the cold chain that can break the
link and have a detrimental effect on the
quality of our product.
V The iceberg lettuce from Ooty, mutton patties
from Hyderabad and sesame seed buns from
unjab were all delivered to Radhakrishna
Foodland rivate Limited (RFL) distribution
centre (cold storage) in its refrigerated vans.
RFL stored the products in controlled
conditions in Mumbai and New Delhi and
supplied them to McDonald's outlets on a daily
basis.
V By transporting the semi-finished products at a
particular temperature, the cold chain ensured
freshness and adequate moisture content of the
food. The specially designed trucks maintained
the temperature in the storage chamber
throughout the journey. Drivers were
instructed specifically not to switch off the
chilling system to save electricity, even in the
event of traffic jam.
 r&' ()*r' +*,r%r&

National inbound Suppliers to Distribution 20 vehicles

Center

Outbound North Distribution Center to 13 vehicles

restaurant

Outbound Îest Distribution Center to 11 vehicles

restaurant

Outbound South Distribution Center to 1 Vehicle

restaurant
Îhile India is viewed as a tough market with
limited scale (McDonald·s is opening 150 stores
a year in China against 15- 20 in India), India·s
outlook is positive and is considered a growth
market. Currently,McDonald·s has 54 outlets in
more than 10 cities in India. The company
plans to add 15 outlets a year at an investment
of US$ 8.7 million (per 15 outlets)
V McDonald·s is planning tie-ups with oil marketing
companies for setting up McDonald·s outlets at gas
stations. Currently, there is one McDonald·s outlet
at a BCL gas station and it is aiming at more such
outlets with alliances with other companies as well.
McDonald·s is also eager to set up more outlets at
places like railway stations, and is working on new
product offerings like a fruit drink and desserts.
V Kll these suppliers shared McDonald's commitment
and dedication for satisfying customers by supplying
them the highest quality products. They worked
cohesively to ensure that the final product reached
the customer consistently each time and every time.
Kt their level, every care is taken to guard against
any interruptions in the cold chain which can break
the link and have a detrimental effect on the quality
of the product. Knd more products reaching the
market fresher and quicker not only benefit the
economy but also help the farmer earn more.