Introduction
Organizations can improve their fortunes by developing efficient and effective supply chain management (SCM) system. SCM is an active process that governs supply chain activities. Properly designed supply chain activities (SCAs) would help customers to get value for money and businesses to gain a competitive advantage in the market. SCAs comprise a broad range of activities including sourcing, logistics, and product development among others (Mentzer et al., 2001) . A disruption of these activities would influence a business negatively as it was evidenced at McDonald's. In that regard, this article will discuss why McDonald's need to improve its supply chain activities.
About McDonalds
McDonald's is a food and beverage company that has its parent plant located in America. The firm is widely known for its ability to manufacture food products that do not go bad quickly. The products are made in different tastes to meet the ever-changing needs of the consumers. McDonald Company understands that the business world has become more competitive in recent times. As a result, the firm has located its operation facilities in other states to take advantage of unexploited resources, lower production costs, ready market, and cheap labor among others. In the food and beverage industry, McDonald Company is a leader in manufacturing fast foods like McNuggets, hamburger, chicken, sandwiches, and cheeseburger (McDonalds.com, 2017). All these products are available in many states throughout the world such as the Middle East nations.
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Why McDonald Company was Chosen
Businesses have a primary role in ensuring that the ever-changing customer needs are satisfied. In order to meet such needs, companies are required to have well-developed supply chain systems. McDonald is not different. The company needs a robust supply chain system. However, in recent times, the company has been experiencing difficulties in its supply chain system. The interruptions were caused by inefficiencies that were experienced at the port. Moreover, one of the suppliers failed to provide the firm with some inputs (Foodlogistics.com, 2015). Consequentially, the food and beverage company could not satisfy its customers. Traditionally, a business that is unable to meet customer demands would not generate good profits in the market. It will lose consumer loyalty and its competitive ability in the market would decline. Apparently, this was the case for the company. Concerns about food safety started emerging, and that led to a sales reduction. The reputation of the company was also affected negatively. It even forced the company to close at some point because it was unable to operate profitably.
Why Supply Chain Improvement is Imperative for McDonalds Company
The problems McDonald Company was experiencing were primarily caused by a weak supply chain system. In that regard, for McDonald to boost its productivity again, it should improve its supply chain. Typically, the supply chain is built on two main pillars namely information and physical flows. Physical flows refer to the perceptible part of the supply chain that involves product transformation, logistics, and storage. Information flow involves the movement of data between various parties involved in the supply chain. Researchers have established that information flow is the most critical part of the supply chain since it helps in planning for future events. Improving information flow would help McDonald Company to establish when a supply crisis is likely to occur. In response, the firm can improve its physical flow by contacting other potential suppliers before a crisis sets in.
In conclusion, supply chain activities influence the profitability of a firm. Companies can be able to satisfy their customers and gain a competitive advantage in the market if they develop efficient SCM systems. Therefore, McDonald Company needs to improve its supply chain to restore its brand image in the market.
References
Foodlogistics.com (2015). Supply chain disruptions; what McDonald’s supplier closure can teach us. Retrieved on 1 July 2017 from http://www.foodlogistics.com/news/12045536/supply-chain-disruptions-what-mcdonalds-supplier-closure-can-teach-us.
Mcdonalds.com (2017). McDonalds. Retrieved on 1 July 2017 from http://corporate.mcdonalds.com/mcd/our_company.html.
Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining supply chain management. Journal of Business Logistics , 22 (2), 1-25.
