Themes: Supply Chain Management
Period : 1996 - 2002
Organization : McDonalds
Pub Date : 2002
Countries : Sweden
Industry : Food, Beverage and Tobacco
- Amit Jetia, managing director, McDonald's India, Mumbai Joint Venture, in 2000.
It was early evening and one of the 25 McDonald's outlets in India was bustling with activity with hungry souls trooping in all the time. No matter what one ordered - a hot Maharaja Mac or an apple pie - the very best was served every time. But did anyone ever wonder as to how this US giant managed the show so perfectly? The answer seemed to lie in a brilliantly articulated food chain, which extended from these outlets right up to farms all across India. |
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Between 1992 and 1996, when McDonald's opened its first outlet in India, it worked frenetically to put the perfect supply chain in place. It trained the local farmers to produce lettuces or potatoes to specifications and worked with a vendor to get the perfect cold chain in place. And explained to the suppliers precisely why only one particular size of peas was acceptable (if they were too large, they would pop out of the patty and get burnt). These efforts paid off in the form of joint ventures between McDonald's India (a 100% wholly-owned subsidiary of McDonald's USA) and Hardcastle Restaurants Pvt. Ltd, (Mumbai) and Connaught Plaza Restaurant (New Delhi).
Few companies appreciate the value of supply chain management and logistics as much as McDonald's does. From its experience in other countries (Refer Exhibit II & III), McDonald's was aware that supply chain management was undoubtedly the most important factor for running its restaurants successfully. Amit Jatia, Managing Director, Hardcastle Restaurants Private Limited said, "A McDonald's restaurant is just the window of a much larger system comprising an extensive food-chain, running right up to the farms". McDonald's worked on the supply chain management well ahead of its formal entry to India. "We spent seven years to develop the supply chain. The first McDonald's team came to India way back in 1989," said S. D. Saravanan (Saravanan), Product Manager, National Supply Chain, McDonald's India.
1] A cold chain refers to the warehousing, transportation and retailing of products under controlled temperatures. Such a chain is necessary for ice creams, frozen vegetables, processed meats, dairy and bakery products. While frozen foods need sub-zero temperatures up to -20°C, products like butter, which require chilling, need about 0-4°C.