McDonalds Analysis of Mc Donald’s Information System Prepared By Ashma Upadhyay Md Ifthakharul Alam Nagendra Koirala Praveen Bisht Overview • World’s largest chain of fast food restaurant, serving more than 58 million customers daily • Australia’s first Mcdonald’s opened in the year 1971 in Yagoona suburb of Sydney • Now, 780 Mcdonald’s in Australia employing 85,000 employee. Organizational Structure Products Business Process and Information systems of Mc Donald’s • Customer relationship/service management • Supply chain management • E-Procurement • Inventory management • Knowledge management • Performance and human resource management Issue Analysis Strength Weaknesses Strong brand value sustains the company’s leadership position Diversified geographic presence provides opportunity to gain from economic buoyancy in emerging markets Large scale of operation compared to peers Legal proceedings affect brand image adversely Product failures such as Arch Deluxe Opportunities Growth of franchisee operated restaurants Positive outlook for out-of-home eating Market can boost top line in long run Growing hot drinks market - another favorable trend to drive top line Threats Rise in the food prices Intense in retail food industries Growing consumer consciousness for healthy food products. E-procurement • E-procurement is the business-to-business or business-toconsumer or Business-to-government purchase and sale of supplies,Work and services through the Internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning Mc Donald’s E-procurement • McDonald’s requires an excellent and fast eProcurement system since its one of the largest and fastest growing fast food chains • eMac digital is the procurement hub that deals with the procurement from the uniforms to the food products in McDonalds. E-procurement Process • In the process of procuring a product, a typical McDonald’s franchise restaurant places an order through E-Mac digital website. • The order is sent to the suppliers. Suppliers order is processed and managed by the logistics. • The logistics sends the order of the products to the franchise restaurants. It is the responsibility of the Emac and logistics that the products are sent to the restaurant. • All the above, steps are handled and executed by the E-MAC digital. Knowledge Magement • “KM is to discover, develop, utilize, deliver, and absorb knowledge inside and outside the organization through an appropriate management process to meet current and future needs.” Ouintas (1997) Structure of Mc Donald’s KM KM process The functions of Mc Donald’s Knowledge management software: • Reduce in-bound customer support • Share company documents and procedures • Eliminate staff training time Advantages of KM at Mc Donald • • • • • • A completely web-based self-help system Categorize information by area, product, etc Built-in feedback loops Customers can store their own favorites list Popular search terms make it easy to find help fast Active Response System integrates into any website form What is CRM? • The process includes collecting customer data, analysing this data to make decision which helps to make new customers and satisfy the existing ones. • CRM software provides an efficient and easy tool for collecting and storing large volumes of customer data that can easily be accessed by various members of an organization. Benefits of CRM Address customers needs when using online or Web based applications. Provide records of works in progress and reporting on customer service functions. Help organization manage customer performance and take steps to improve performance. Enable organizations to forecast customer response rates and retention. Allow managers to collect and organize customer information and disburse to appropriate departments like marketing or sales. Allows organization to create closer and more intimate customer relationships. Three key phases of CRM Acquire: process of attracting the customer for their first purchase. Retain: making customers to buy the product again and again Extend: Keep the potential customer forever. (Source: http://marketingteacher.com CRM in MacDonald CRM systems are used in MacDonald for the top management to provide crucial data, like customer satisfaction and efficiency of service by the frontline crews CRM software’s are used to gather information about the number of customers buying from a particular store per day and to provide important data. CRM is able to gain new customers, retains existing customers and extends the level of existing customers in Macdonald. WHAT IS SUPPLY CHAIN? • Supply chain refers to the flow of materials, information, payments and services from raw material suppliers, through factories and warehouses, to the end customer. MCDONALD’S SUPPLIERS • Some of McDonald’s most significant supply partners in Australia include: – – – – – – – OSI – beef, chicken products and fish; McKey - distribution; Australian Food Corporation – beef; Inghams Enterprises – chicken products; Simplot – fries and hash browns; McCain – fries and hashbrowns; Fresh Start Bakeries – buns, English muffins, hotcakes, McCafe cakes; – Fonterra – cheese, shake and sundae mixes. LOGISTICS AND ITS ROLE IN SUPPLY CHAIN • Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements” PROCESSES IN LOGISTICS MANAGMENT • Various processes involved in logistics management are: – – – – – – – – – Transportation Inventory maintenance Order processing Acquisition Protective packaging Warehousing Material Handling Information Maintenance and Transfer Supply Scheduling MAJOR LOGISTICS PROCESES IN MCDONALD’S • Transportation process – McDonald’s has both the cold and dry storage facilities with the capability to store products up to 22 degree C as well as delivery trucks to transport products at temperatures ranging from room temperatures to frozen state – The specially designed trucks maintain the temperature in the storage chamber throughout the journey. MAJOR LOGISTICS PROCESES IN MCDONALD’S CONTD… • Inventory Maintenance Process – MacDonald’s follow “Just in Time” JIT system of inventory management. – McDonald’s use pre-cook batch of hamburgers and let them sit under heat lamps and cook just in time when it is need as the customer orders for it. MAJOR LOGISTICS PROCESES IN MCDONALD’S CONTD… • Warehousing processes – McDonalds uses eStore Logistics service in Australia for its warehousing logistics needs. – eStore Logistics Pty Ltd (http://estorelogistics.com.au) is an Australian based logistics service provider that has a highly sophisticated warehouse management system (WMS) that can be easily customised for specific business requirements. MAJOR LOGISTICS PROCESES IN MCDONALD’S CONTD… • Transfer processes – Food ingredients are supplied by two categories, Tier-I and Tier-2 suppliers. – Tier-2 suppliers comprise growers and processors who include importantly, lettuce and potato growers, poultry farms and companies which manufacture coating systems that coat the vegetable and chicken patties. – The ingredients are supplied to Tier-I suppliers who process them, for instance, into vegetable and chicken patties — this is done by Vista Processed Foods Pvt. Ltd. — or potato products like French fries, potato wedges and hashbrowns which are expertly churned out by McCain Foods India Pvt. Ltd. Organizational Impact of Recent Systems • Business strategy - collapsing time and distance, enabling electronic commerce • Organization Culture - encouraging the free flow of information • Management Processes - providing support for complex decision making processes • Work - dramatically changing the nature of professional • Faster Check out: Helped to serve the customer quickly • Auto Bag: Helps to run the CRM system. • Mc Internet: A new approach to acquire customer through KM strategy. Overall Analysis analysis of IS The information systems like CRM, SCM, KM and eprocurement support the business functions of marketing, production, accounting, finance, and human resource management through a variety business operational and management practices McDonalds has adopted various business processes and information system long time ago and it upgrades its information system frequently. Information systems use in MacDonald is helping to find, select, organize, disseminate, and transfer important information and expertise necessary for business activities. Conclusion McDonald’s has been known for its excellent set of business processes and information systems. Mc Donald’s operation has changed with the use of the information system. Using the CRM, Knowledge management, SCM and Eprocurement has helped the organization to move forward. Mc Donald’s cultures and business strategies has used the recent systems to capture the all market information. The implemented systems create opportunities and issues that managers need to address in many aspects of their business process.