MEMORANDUM
TO: McDonald’s Supply Chain Officer
Cc.
FROM: [Name]
DATE: June 6, 2016
SUBJECT: How to mitigate Supply Chain Disruptions
About the company
McDonald is a UK-based food and beverage oriented company that has a good brand positioning following the ability of its products to stay for long periods without going bad in addition to being tantalizing (New, 2015). Pursuant to the competitive nature of the business world, the company also explores other new environments to capitalize on lower operating cost, affordability of labor, availability of market in addition to utilizing unexploited, which were found in such countries. McDonald’s celebrates being a world leader in the manufacture of fast foods such as hamburger, cheeseburger, chicken McNuggets and sandwiches. In fact, its products are evenly distributed to most parts of the world including the Middle East, therefore; it has a wider customer base both locally and globally.
Problem Statement
McDonald’s Food and Beverage Company just like other companies have been struggling to satisfy the ever-increasing demands of its products (Andre, 2016). However, due to supply chain disruptions, the company found itself in a bad state such that it was not even able to satisfy its present clients. In business operations, such interruptions are not the only nuisance but also affect the financial and the overall reputation of a company. In worst-case scenarios, it can result in organizational changes or even closure of the company. In McDonald’s case, for example, inefficiency processes at the port plus a failure by the supplier to supply the company had caused the disruptions. This resulted in a worldwide concern about food safety, which on the other hand caused a reduction in sales (New, 2015). This trend forced the company to stop operating for some time prior to it opting to transition its leadership by appointing a new CEO in an attempt to revive its impact in the market. However, it is apparent that the problem which the company was facing had been caused by poor supply management (Andre, 2016).
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How the Company can Mitigate the Problem
In order for the company to regain normality in its supply and overall sales, it would be imperative for the procurement team to devise means and ways that would buffer their sourcing strategies. It would be vital for the company to have an extra source of supply for its main products. In this respect, the team ought to identify convincing and reliable suppliers who would be ready to occupy the space of the main supplier in case a disruption occurs. An e-sourcing can be an effective tool for the procurement team to use since it would be integral in establishing the available suppliers, products, and prices that are currently in the market (Bauknight, 2000). This will provide the company with an insight on where to alternatives sources in times of disruptions thereby avoiding the need to restructure its menu.
It would also be essential for McDonald’s company to have suppliers from different geographic regions so that in case there is a shipping problem it can rely on other suppliers from other regions that do not experience that problem at that particular time. Notably, the company needs to divide its orders between the diverse suppliers of core products to its menu in an attempt to ease the burden that the source is likely to face (New, 2015). Such a move will be key to ensuring that the business evades chances of being shut down due to delayed supplies.
Benefits to the Company and Stakeholders
The recommendations herein would help the company to be in a good position to sustain its productivity indefinitely. This move will be important to restoring the brand image of the company since it provides options that would help in mediating the issue of food safety that the company had initially been associated with. On the other hand, adopting an e-sourcing will provide the company with a chance to identify qualified suppliers at their disposal. As aforementioned, it will play a crucial role in ensuring that the company can access cheap and reliable suppliers in addition to gaining an insight on market prices that their products will fetch (New, 2015). In so doing, the stakeholders will make good profits in addition to gaining valuable information that would elevate their company’s competitiveness in the market.
Regards
[Initials]
[Name]
References
Andre, A. J. (2016). McDonalds and the challenges of a modern supply chain . Retrieved From https://www.coursehero.com/file/13823501/Unit-4-Current-Event-Articledoc/
Bauknight, D. N., (2000) the supply chain future in the e-economy. Supply Chain Management Review , 4 (1): 28–35.
New, S. (2015). McDonald’s and the Challenges of a Modern Supply Chain . Retrieved from https://hbr.org/2015/02/mcdonalds-and-the-challenges-of-a-modern-supply-chain
