McDonald's Food Chain

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Outsourcing at its Best

McDonald's sourced ingredients from all parts of India. (Refer Table I). The iceberg lettuce was specially developed for India using a new culture farming technique. This variety of lettuce was similar to the lettuce McDonald's used elsewhere in the world. To meet the demand consistently, McDonald's helped Trikaya Agriculture grow the lettuce throughout the year and even in rain-shadow areas. The crop was harvested between 45 days, depending on the climate. The crop was harvested early in the morning and immediately stored in vacuum pre-coolers installed at the farm. The pre-cooler brought down the temperature of the lettuce from 26º to 3º. McDonald's was able to bring technology to its suppliers too. Vista and Kitran Foods was formed through a joint venture between Vista and OSI Industries, US, for chicken products; and between Kitran and Kitchen Range Foods, UK, for vegetable patties. Vista and Kitran's Taloja plant was commissioned in December 1996.

"We have developed a supplier chain to get fresh vegetables and chicken. We test everything that comes into our plant," said Jose Azavedo, CEO, Vista & Kitran. The plant had a Hazard Analysis Critical Control Point (HACCP) system to ensure quality. The ready-to-cook patties, manufactured at the plant, were stored in rooms at -26º c. McDonald's had also applied supply chain technology when setting up Dynamix Dairy Industries Limited. The Dynamix Dairy plant, with technological collaboration from various international firms, including Schreiber International Inc, US, went in for backward integration, by tying up with cooperative organizations at the district level.

The joint venture with Baramati Cooperative Milk Marketing Federation resulted in facilities across Baramati to collect milk. "We did a survey of Baramati and set up 35 bulk cooling stations with 50 tanks where milk can be collected, checked and stored at 3º", said A. R. Sumant, General Manager, Milk Procurement, Dynamix Dairy Industries Limited. "Our aim was to ensure that the milk producer does not travel more than 2.5 km to deliver his product. That ensures longer life for milk," he added. Once collected, the milk was transferred to Dynamix's plant in insulated tankers. Dynamix procured 3.5 lakh litres of milk every day, which was used to make processed cheese exclusively for McDonald's. The product was made according to the multinational's specifications.

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