A key performance measure is a metric that is used to identify or indicate how an organization is performing concerning the objectives that they had set. Key performance measures are very instrumental in an organization as they motivate change and influence the ultimate outcomes. Most key performance measures are termed financial indicators (for example Net Profit Value) of the organization, but there exists other noticeable key performance measures, which concentrate on clients (for instance, how many visits?). In the end, they will be assessing a specific aspect of the value chain. Thus, it is encouraged that the fundamental performance measures become measurable, accessible, appropriate, valuable, and suitable for the time (Parmenter, 2015). A value chain could be described as an organization’s series of activities that are maximized to provide something valuable, whether for marketing or production, and many more (Epstein, 2018). This paper will analyze the key performance measures within McDonald’s company and determine if these measures are aligned with the company's strategy as well as traditional and supply chain measures that could be supported to enhance value-added activities within McDonald’s Company and among other things.
The first key performance measure that can be evaluated in McDonalds Company is contractor bids. This measure is connected to the business units within the company. The markets of McDonalds are segmented into four: Europe, Pacific or Asia, Africa, Middle East, U.S. and other nations (Parmenter, 2015). For several food supplies and services, there are contractors that must schedule a bid that will indicate the food products and services they are willing to offer and the allocated amounts for the same (Zhang, Lawrence, & Anderson, 2015) . This measure can be examined for tracing the pending bids, and the meetings or projections linked with such supplies.
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The second key performance measure has to do with the inventory of the company linked to those subcontracted to supply raw products or offer services. This measure is also linked to the business units within McDonald’s Company. Many subcontractors are hired to offer their services or deliver products to the stores. Being a subcontractor entails maintenance of inventory of materials, office supplies and products used so that the company does not run shot of any (Zhang et al., 2015) . The presence of excess unwarranted inventory implies that the cash for such is removed from the circulation. Therefore, it is significant to maintain inventory records for comparison of purchases made and the timing of the same.
The third key performance measure has to do with quality control. Most products by the company need quality control. This measure is related to McDonald’s business units, as there are internal quality assurance teams. The materials received from the communities must be subjected to consistent and exhaustive checks to ascertain their quality (Parmenter, 2015). Even the products that are directed towards the customers should be verified for quality to retain a good reputation in the market (Zhang et al., 2015) . The quality assurance teams must assess the qualities and watch out for any compromises and whether the procedures are followed. The scores and recommendations of the quality checks are communicated with the management of McDonald’s Company, as a key indicator of their performance.
The measures are aligned to with McDonald’s strategy as they have always determined productivity and shareholder value. Unfortunately, the traditional measures are not sufficient to dictate effectively the operations of the company. Through the measures, McDonald’s have quickly managed to have a quick view of the general performance of their organization (Epstein, 2018). The measures are aligned to company’s strategy in the sense that they offer real-time data regarding the progress and health of the organization. The measures are also deliberate considering the organization’s vision and mission. With the key performance measures, the management of McDonald’s and employees are aware of their action plan to attain their crucial success aspects.
McDonald's can modify its supply chain concentration and reform itself through embracing a number of innovative initiatives as it relates to changing needs of the customers today. This can be done by engaging internally with suppliers as well as clients, eliminating traditional measures such as price promotions and streamlining logistics and consistent renewal programs (Zhang et al., 2015) . However, traditional strategies entails like in-store sales and price promotions in most McDonald's stores can promote a shift in product and service demands. Organizational benchmarking that McDonalds promotes involves the study of other successful competitors in the food industry. According to Epstein (2018), the company is keen on their manufacturing potentials, inventories, warehousing as well as logistics potential. The employees are involved in creating partnerships with these competitors to meet the demand of their customers. The employees are also involved aggressively in monitoring the changing business needs and requirements in the food industry.
In conclusion, key performance measures are significant for not only McDonald’s company but also other organizations. They can be quickly maximized to check on the profitability and shareholder value. Sticking to traditional strategies may not be effective to control the changing business environments today especially with the shift of demands of the customers. It is also vital to respond to the business requirements that are affected by the dynamism of the business environment today. Key performance measures are intrinsically connected to McDonald’s strategic goals and are very instrumental for managers to examine whether they are missing the target or they are in the right direction of pursuing their goals. As revealed in this paper, McDonald’s have been successful in the key performance measures that they identified to assess their success in light of their goals and targets. This reflects in their consistent productivity and shareholder value that is making them rise above their competitors.
References
Epstein, M. J. (2018). Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts . Routledge.
Parmenter, D. (2015). Key performance indicators: developing, implementing, and using winning KPIs . John Wiley & Sons.
Zhang, J. J., Lawrence, B., & Anderson, C. K. (2015). An agency perspective on service triads: Linking operational and financial performance. Journal of Operations Management , 35 , 56-66.
