Supply chain management has become the subject of interest in these past few years, particularly in business management, academics, and consultancy. Most companies today will not improve their profitability and cost efficiency by sacrificing their partners in the supply chain; rather, companies should ensure that its supply chain remains competitive. Furthermore, the value of the supply chain management depends on its capacity to help gain an understanding of the actions of the flow of materials around the chain, providing a ground for further development of the supply chain process (Croom et al 2000).
Supply chain management centers on how companies use the procedure, ability, and technology of their suppliers to strengthen their advantages in the competition. This approach considers all organizations within the value chain as a collective ‘virtual business’ entity. It is emphasized that supply chain definition refers to the procedure of the process of supply throughout the value chain here a practical method to the supply chain management is to take into account only the supplier that is strategically significant in the value chain (Tan 2001). The concept of supply management is considered by most researchers as associated with the desire id the producer to source their planetary inputs and globalization of production where management is required to employ approaches of profitability in regulating the flows of output and input internationally. The primary focus of the competition in the market in this condition is not among the goods of the companies, but in the delivery of goods throughout the supply chains (Mbang et al 2012).
McDonalds is a company that is well known for its supply chain management and is one of the world’s leading fast food restaurants. McDonalds is now operating in 118 countries and has more than 33,000 restaurants. It serves millions of customers each day. In this regard, supply chain management can be defined as a wide range of activities of corporations. The supply chain of McDonalds is multi-layered and crucial. It includes the total cost; risk sharing and the sharing of rewards, operations speed, plans for joint venture, the supplier base, the amount of the coordination, and the management of inventory. The supply chains of McDonalds have two categories – Tier 1 and Tier 2. Tier 1 is more on the processed food, and Tier 2 is more on the growers as well as the food processes that provide poultry, potato, lettuce, cabbage, coating system, and vegetable patties. McDonalds’ successful use of the effective supply chain model obviously came from its distinct concept of outsourcing. The McDonalds’ supply chain has been contracted out 100 percent, which is not commonly practiced by large industries. The stakeholders that are involved in the supply chain management are categorized into three primary characteristics. The members of the supply chain should consider the supply chain as one and should have a system approach, with the emphasis on the value of the customer. This ensures customer satisfaction and strategic orientation where the supply chain members’ coordination efforts will work together and incorporate the operational as well as the strategic capacity into a collective whole (Sharma 2013; Fristedtett al. n.d).
References Page
Croom S.; Romano, P.; Giannakis, M., 2000. Supply Chain Management: An Analytical
Framework for Critical Literature Review. European Journal of Purchasing & Supply Management, 6, pp. 67-83
Fristedt, M.; Hansson, A.; Brodin, M.H; Rehme, J.; Sandberg, E., n.d. Supply Chain
Management in Practice: A Case Study of McDonald’s Sweden. [pdf]. HandelnsUtvecklingsrad. Available at: http://www.hur.nu/wp-content/uploads/2010/08/2012-Supply-Chain-Management-in-practice-A-Case-study-of-McDonalds-Sweden.pdf [Accessed on 15 January 2016]
Mbang, A.; James, J., 2012. A New Introduction to Supply Chains and Supply Chain
Management: Definitions and Theories Perspective, International Business Research, 5(1), pp. 194 – 207
Sharma, K., 2013. A Case Study on McDonald’s Supply Chain in India. Asia Pacific Journal of
Marketing & Management Review, 2(1), pp. 112 -120
Tan, K.C. (2001). A Framework of Supply Chain Management Literature. European Journal of
Purchasing & Supply Management 7, pp. 39 - 48
