Managing stock to meet customer needs
Introduction
McDonald's has over 30,000 outlets in 119 countries. It is a brand known throughout the world. One
of its majorchallenges is stock control. Outlets need a good balance of stock. They need enough to
meet demand but not so muchthat there is waste. Each manager used to order his/her own stock,
which took a lot of time. Also, it was not veryaccurate. In 2004, McDonald's started a Restaurant
Supply Planning Department. This team forecast likely demand forproducts.
Stock
Stock is dealt with on a FIFO basis i.e. first in, first out. This makes sure that managers are always
using fresh stock.
There are three main types of stock to manage.
* Raw materials. These are the ingredients, such as potatoes and burger buns, and supplies needed
to serve them,such as paper cups and boxes.
* Work in Progress. This is stock that is in the process of being made into finished products.
* Finished products. These are goods that are ready for sale.
Stock Management
This is the process of making sure that there is enough stock when it is needed. Too much stock
means waste. Too littlestock means customers may not be able to have what they want. McDonald's
uses lean stock control. This means thatthey carry as little stock as possible. The central team is
made up of 14 regional planners. Each works with around 80outlets. They speak to them on a
regular basis. Managers inform the planners of any local factors that could affect sales.This helps
planners to make sure that there is enough stock. The forecasting system that planners use is
calledManugistics.
Stock Control Charts
Charts are used to show levels of stock against sales. Sales of products are replaced by new stock.
Manugistics needstwo years' worth of data to produce accurate forecasts. Managers record stock
levels after they close the store. Theyrecord major items daily and all items weekly on the store
computer system. A web tool called Weblog is then used toview and amend orders. It creates a daily
proposed order, which the manager can view and change. Once confirmed, Weblog sends the order
to the distribution centre.
Benefits
All parties gain. Managers gain because outlets run out of stock less often, and there is less
wastebringing costs down which can be passed onto the customers. Also, time is saved so managers
can concentrate on thecustomers who also benefit from fresher food. Factors such as national
promotions are taken into account. Deliveriescan be less frequent because amounts are more
accurate saving money in transportation costs.
Conclusion
Good stock management is vital to the efficiency of a business. McDonald's new system leads to
greater accuracy andless waste. It also makes sure customers can have what they want.