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Date 21 October

Year 1996

Place Bandra, Mumbai

To Study The Supply Chain Management Process of Mc Donalds

Presented By: Vidya Gawad Natasha Shekhar Sheetal Rane Pooja Sawant Aditi Pai 13 24 43 47 63

History Of McD Supply chain Management (SCM) Benefits of SCM McD Befpre SCM Supplier of McD Distribution Center (DC) Sales Potato Supply Chain SWOT Analysis Future Plans

Who was Ray Kroc.?

In 1954, Ray Kroc was an exclusive distributor for "Multimixer" milkshake machines when he came across the small hamburger of Dick and Mac McDonald in California. He took one look at the rapidly moving line of customers buying bags of hamburgers and French fries and thought, "This will go anyplace. Anyplace! After the McDonald brothers explained that they didn't have the personal desire to oversee the expansion of their concept across the nation, Ray Kroc became their exclusive franchising agent for the entire country. Kroc formed the new franchising company on March 2, 1955 under the name of McDonald's System, Inc. This was the start of McDonald's, as we know it today.

Originated from American culture Beef content (Hamburger) Taboo for Indian culture

Cross Culture
Replacing beef with chicken Procurement of Govt. Certificate for chicken halaal Mc Burger to Mc Aloo Tikki


McDonalds in India is a 50-50 joint venture partnership between McDonalds Corporation [USA] and two Indian businessmen.

Amit Jatias company, Hardcastle Restaurants Private Limited Mr. Amit Jatia owns and manages McDonald's restaurants in the west.

In the north, McDonald's Restaurants are owned and managed by Vikram Bakshis Connaught Plaza Restaurants Private Limited.

There are 56 McDonald's restaurants in India employing around 2,000 Indians.

McDonald's operates over 30,000 restaurants worldwide, employing more than 1.5 million people.
Mr. Vikram Bakshis

Supply Chain Management ?

Supply chain management is a set of approaches used to efficiently integrate suppliers, manufacturers, warehouses, and customers so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time in order to minimize system wide costs while satisfying service-level requirements.

Benefits of Supply Chain Management

To operationalize its globally practiced QSCV (quality, service, cleanliness, and value) principle; To enjoy flexibility in pricing; and To launch a new product when necessary.

McD Before SCM

Nine ingredients required for Burger McD had to deal with 35 suppliers 1988- Foodland started its operations at Mumbai (Thane) No proper storage facilities at Thane 1998- RFPL set up its 2nd Food Service DC at Noida,near Delhi Time Consuming Expensive- Transportation

Oct 2003- RFPL set up their new DC at Kalamboli

Suppliers of Mc Donalds
Agriculture (Talegoan) Supplier of Iceberg Lettuce Pre-cooling room and a large cold room for post harvest handling. Refrigerated truck for transportation.

Vista Processed Foods Pvt. Ltd. (Taloja) Supplier of Chicken Pattice and Vegetable range of products

Capability to produce frozen foods at temperature

as low as -35 Degree Celsius to retain total freshness. International standards, procedures and support services.

Dynamix Diary (Baramati) Supplier of Cheese

Fully automatic international standard processing facility.

Amrit Food Supplier of long life UHT Milk and Milk Products for Frozen Desserts

UHT (Ultra High Temperature) processed milk And milk products. Turnover increase Rs 4 crore to Rs 20 crore. At present, about 30 per cent of its turnover comes from McDonalds.


Bector & Sons (Khopoli ) & Cremica Industries (Punjab)

Supplier of Buns Cremicas turnover has grown to about Rs 200 crore from Rs 20 crore

Mrs. Bectors Foods (Pune) Suppliers of Sauces

Distribution Centre

adhakrishna Foodland odland specializes in handling large volumes, providing the entire range services including procurement, quality inspection, storage, inventory anagement, deliveries, data collection, recording and reporting. The compa nover has increased to about Rs. 250 crore from Rs. 100 crore


Distribution Center
Radhakrishna Foodland Trikaya Agriculture Vista & Kitran

Amrit Food

Dynamix Diary

Shah Bector & Sons & Cremica Industries

Mrs. Bectors Foods

Local farms in Kalamboli and others

Transportation from farm

Delivery to Foodland and quality checks

Quality Check Happy Customers

Transportation in temperature controlled vehicles

Warehousing and temperature controlled storage

Sesame Seeds from Ghaziabad, Uttar Pradesh

Special Vegetarian (eggless) Sauce from Quaker Cremica, Phillaur, Punjab

Fresh Iceberg Lettuce from Trikaya Agriculture, Talegacon, Maharashtra, Ooty Farms, Ootacarmund, Tamil Nada, Meena Agritech, Delhi, Ferrocoa Farms, Dehradun & Breading Batter

from Cremica EBI, Ludhiana, Punjab

Buns from Shah Bector & Sons, Khopoli, Maharashtra & Cremica, Ludhiana

Cheddar Cheese from Dynamix Dairy, Baramati, Maharashtra

Vegetable Patty (made from fresh peas, carrots, green beans, red capsicum, potatoes, and rice) from Kitran Foods, Taloja, Maltarashtra

Bandra - Appx. 2 Lacs sale per day Weekend the sales is 2.5 Lacs for a day Andheri - Appx. 1 Lacs sales per day
Weekend 2 Lacs sales per day New restaurant opened in east, in very 1st day the sale was Appx. 3 Lacs


Appx. 1 Lacs sales per day Weekend 1,25,000 sales per day


New restaurant opened so, in very 1st day the sale was Appx. 3 Lacs

Hyderabad -

Opened 2 months back, in very 1st day the sale was Appx. 3 Lacs

Per day Order at Colaba outlet

Approx. Sales-

1 Lac
ITEMS Order from DC 200-250 150 100 170-180 280

McAloo Tikki McVeggie Veg Pizza McPuff Mc Chicken Pattie Chicken McGrill

McD orders twice a week i.e. Tuesday & Saturday Delivery Time: 1 a.m. (within 30 minutes )

Potato Supply Chain

How did it start?

McCain Foods India Ltd. was established in 1997 to import Canada-based McCain food products (French fries, potato wedges etc.) and supply to McDonalds and other restaurants

* Growing the potato locally can increase the

market share as it may lower the price at least 25% below the current price

* McCain began to check out the potential for

growing and supplying locally

Key Constraints
Single Variety and poor quality Did not match the requirement Lack of proper infrastructure for storage and transportation Lack of technology and machinery Low yield per hectare

McCains Approach
Invested $ 5 million in identifying the best potato growing area Worked closely with farmers in selected areas (Gujarat and Maharashtra) to develop process-grade potato varieties Set up a distribution chain (institutional buyers, retail outlets with deep freeze facilities) Demonstrated good practices: techniques like irrigation system, sowing seed treatments, planting methods, fertilizer and better storage methods Recently constructed a potato processing plant that has a capacity to process 30,000 tons of potato annually in Gujarat

Interim Findings
Average 40 tons of hectare (average Indian yield for potatoes is 18 tones per hectare) More profit for farmers as they sell directly to McCain Foods India Environmental friendly farming by using the sprinkler or drip irrigation method Gujarat potatoes utilized to make McDonalds French fries & potato wedges.

SWOT Analysis
Strong Brand Equity (Globally recognized brand) Strong Distribution Network Quick Services Customer Satisfaction

Meager sales during festival season Limited menu Mc Donalds has been around for a long time therefore it is important to keep innovating

Tie up with Retail Mall Innovations in the menu (More choice )

Rising Raw Materials prices Changing customer lifestyles Threats from existing competitorsKFC

We have an obligation to give back to the community that gives us so much Ray Kroc Founder McDonalds Corporation ... and this belief has guided McDonalds in each of the 118 countries in which it is present. A principle that was put in to practice in India even before our first restaurant opened

English Learning Resource Centre for the students of the Anjuman-I-Islam Girls High School in Bandra McDonalds joined hands with The Nalanda Foundation to support education for the girlchild for a period of 5 years. In 2003, the fund-raising activity had the McDonalds French fries as the focus . From November 14 20, for every medium and large fries sold whether a la carte or as part of Value Meals McDonalds donated Re.1/- for the cause. Additionally, Ronald McDonald House Charities also contributed 4 lakh rupees for the McDonalds Blue Dot initiative

Future Plans

Over the next three years, Mc D project that this investment will touch Rs. 750 crores which will go into development of the supply chain as well as the opening of new restaurants. The expansion will also reflect in the direct employment generation of an additional 3500, taking total employment to 6500 people The prices will be increased from today i.e 09/10/06 due to inflation

Vote of Thanks
Mr. H. Shriram (V.P of RFPL) Mr. Mann Singh (Facility Manager RFPL) Mr. Anujit (Manager McD- Colaba) Prof. Shailesh Kale