Quality Management - McDonald's

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QUALITY MANGEMENT OF MACDONALD –

A CASE STUDY

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Quality management is the management of activities and functions which are involved in determination of quality policy and its implementation. It ensures that the relevant organization, product or service is consistent. The four main components of quality management are quality planning, quality control, quality assurance and quality improvement. The aim of quality management is not only to focus on product and service quality, but also pay attention to the different ways to achieve it. The main principals of quality management as defined by International Standard for Quality Management (ISO 9001:2008) and other organizations are following:

  • Customer focus
  • Leadership
  • Process approach
  • Involvement of people
  • Benchmarking
  • Continuous improvement
  • System approach to management
  • Factual approach to decision making
  • Mutually beneficial supplier relationship
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In this work, a details analysis of quality management of Macdonald’s is presented. The report include the history, strategy, quality control and the supplies , logistics and inventory management of the stated company.

MACDONALD’S HISTORY

MacDonald Corporation was established in 1940s (McDonalds, 2014). It was the only fast food industry in the whole world who has started a chain system in global market. The main menu of Macdonald’s includes some of the global world renowned foods like Big Quarter Pounder, French Fries and Chicken Nuggets. In breakfast they serve Sausage McMuffin with egg. Today it is one of the famous and leading food service retailer. IT has more than 35,000 local food chains (restaurants) in more than 100 different countries (McDonalds, 2014). The total employees of MacDonald’s are approximately 1.9 million and it serves more than 70 million customers every day around the world (McDonalds, 2014) (Steve, Dudley, Hazen, 2012). A pictorial description of quick facts of MacDonald’s is shown in Fig. 1. The corporation has distributed sale approach and more than 80% of its restaurants are ran by independent and local distributors. The restaurant was started by only two brothers Dick and McDonalds in 1940, they were beginners but now MacDonald Corporations is one the main stakeholder of fast food industry of today world. The beauty of this chain is that they did not only sale their main products but they also change the product type and its ingredients according to the local country or region requirement. Also every year they introduce new products and schemes to attract their customers. Their recent menu includes a wide range of Burgers & Sandwiches, Chicken & Fish, various Breakfast options, Salads, Snacks & Sides, Beverages, and Desserts & Shakes (McDonalds, 2014). For competing and to be a main stakeholder of today competitive international market, Macdonald is using an operational management system (William, 2008).

Figure 1 Quick overview of MacDonald Corporation

COMPANY STRATEGY

The brand mission of MacDonald is “To be our customer’s favorite place and way to eat and drink” (McDonalds, 2014). The global world operations of MacDonald are aligned around the worldwide strategy called “The Plan to Win”. This strategy is centered on the best exceptional experience for the customers. The organization follows the motive of “People, Products, Place, Price and Promotion” (McDonalds, 2014). McDonalds wants to become the world’s best quick service fast food chain which provides high quality food to its each and every customer every time, in a clean environment with extraordinary service and great values.

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The adopted strategies by MacDonald’s are differentiation and cost leadership strategies (Operations Management in McDonalds, 2014). McDonalds is committed to its people. It provides equal opportunity to each employee. They develop leaders and reward them according to their achievements. This firm believes that a team of well-trained individuals with different background and experiences, working together in a competitive environment with high level of commitment is their key to success.

QUALITY CONTROL

McDonalds has a set of management teams for the inspection of food item quality and their control for the successful business. Quality service and quality control are properly checked by the management team. The quality management team deals with the quality service and quality control as given below.

Quality service

  • The food- The quality of meat, bun, vegetables etc should be good and up to the standard.
  • The Employees- The quality management team has a look at the timing, neat dress and cleanliness of an employee. The team work is always preferred in the McDonalds to get maximum benefits.
  • The Restaurant- The management team looks that the restaurant should be clean, tidy and sparking. While they also tried to provide the fast, accurate and friendly service.

Quality control

The quality management team makes it sure to fulfill the basic criteria set for the operation of McDonalds. They also listen and get feedback from the customer to make their business improve. They also have a relationship with the scientific community to provide best and safe food among the people. They tried to have solutions for special health issues among children, and prepare a hygienic food for them.

There is no compromise on quality and quality control, the one of the reason for the successful development of McDonalds all around the world. The inspection is done on all McDonalds franchise and it is also a part of their strategy. HACCP (Hazard Analysis & Critical Control Point)is the applied system of McDonalds to keep nice and good food items to the customers. The quality management team also looks at the diet contents and nutrition of each food items and is given in Table 1. The health related issues are handled by the quality management team and nutrition is properly controlled.

Table 1 Nutrition of McDonalds food.

SWOT ANALYSIS

The pictorial description of SWOT is shown in Figure 2. On the basis of environmental analysis of McDonald's, the structural analysis of fast food industry, and the assessment of internal resources of the company, following strengths, weaknesses, opportunities and threats are there for McDonald's:

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Figure 3 SWOT description

Strengths

  • McDonald’s holds a very strong brand name worldwide.
  • They have large partnerships with other companies that provide them with their desired products; this increases the goodwill of the company.
  • McDonald’s is one of the most reputed firms who are socially responsible.
  • Self-service criteria save a lot of cost.
  • Loyal employees & management & customer are their biggest strength.
  • McDonald’s makes sure that cultural & regional barriers are kept in mind while providing food to different countries.
  • Clean environment and play areas for children where they can enjoy their time.

Weakness

  • The weakness that hits the list of employee turnover rate. Every year many of their employees are fired out of the restaurant.
  • McDonalds mostly advertises products and food items that targets children.
  • Health conscious people often complain that they do not provide us with the organic and healthy food. This becomes their weakness when they get in the complaints.
  • They also face quality issue at times. This affects the business as they are running the outlet worldwide, if one franchise gets affected others also get a bad name.

Opportunities

  • It can open up online services for their customers so that they can easily order their desired meals sitting at home.
  • Discounts given on every food item may help them gain more customers.
  • They can go for a joint venture with the retailers they work with.
  • They can introduce healthy hamburgers and healthy drinks for the people who are health conscious.
  • In order to be environment friendly, they can use packing material which can be recycled later or material that does not create pollution.

Threats

  • Emerging competition of similar outlets is becoming a problem for McDonalds.
  • Health issue also becomes a problem when it comes to food.
  • As it is a multinational food outlet, fluctuations in the currency of other countries becomes a problem for such companies.
  • Recession in any country would definitely affect the whole outlet worldwide.
  • People facing heart problems and obesity accuse McDonalds for not providing them with the healthy food.
  • They have a threat of local food outlets in different countries.
  • McDonalds is operating in a fully-fledged economy where competition is increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession.

Recommendations

Reduction of employee training spending (lowering employee turnover).

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In order to reduce of employee training spending and to lower turnover, I would like to suggest:

  • To give the job just for highly motivated people. Itmeans, that they are going to be loyal and not to leave job so fast;
  • New employees would be trained by employees, who are working longer. In this way, company reduces training spending, new employees are trained by the people, who are working inside the company and do the same things every day.
  • To motivate employees and always take care about their expectations. It can be money premiums for good working in the end of the month (or year), some employees parties, ’’Employee of the week (month)’’ competition.
  • To make a line of organic food in their menu and take a look what is more popular and healthy for their customers. If it is going more popular than usual menu food, it is more worth to make all food in organic way, even it is more expensive. First of all, people like what is natural, and then they are interested in the price.
  • To make big advertisement companies declaring organic food pluses and make it more popular in such way. Many people loves McDonald’s food, so it has an authority and can show good example of necessity of organic food in people life and compare how organic and usual McDonald’s food effect customers’ health and all the nature about them.

Advantage of human health problems (improvement of products)

McDonald’s is big food supplying company, and all of us know, how food affects our health. It is one of the main factors, what built our body and strength our brains. Knowing that, McDonald’s should:

  • Suggest just high quality, improved products, which is full of vitamins and minerals. So, it means that the company must improve their products, all the food must be certificated and fit for all healthy food standards.
  • Be in a contact with suppliers, who supply products for McDonald’s food and always check if the products is natural, high standard and healthy for all of age customers.
  • Contact with doctors, scientist and improve their products to fit for all of age customers, even they have some problems with their stomach. It means to make measures and find what the best is for all possible customers.

More Healthy Choices

McDonalds should develop menu choices that are healthy and socially acceptable.

It is possible to develop a menu that people will enjoy and that also fits into the original “Speedy Service” model the company introduced in the 1950’s.

Use local food sources where possible.

Using local sources decreases the time to market, and also decreases the use of fuel to transport goods.

Increase presence in Asian countries

  • McDonald's has most certainly had a profound effect on China.
  • When the first McDonalds opened in Beijing more than a dozen years ago, 40,000 people lined up to observe a Big Mac and get their picture taken with the infamous Ronald McDonald.
  • McDonald's is growing faster in China than in the United States.
  • McDonalds owns & operates more than 600 stores across 105 cities in China.
  • More than 100 more McDonald's stores will be added annually to Chinese cities within the coming years.

CONCLUSIONS

McDonalds is operating in Pakistan as very profitable organization. In this project we struggled to study the management behaviour of McDonalds starting from its history to its vision and mission statements in which explained the historical of McDonalds of how it entered Pakistan’s market and the expansion of its business in various cities. Moreover we also explained about its and services which are offered in Pakistan by McDonalds as their revenue generating products and services. I addition to that we researched all their product line.

We also explained the organizational structure of McDonalds. In that we explained the hierarchal structure of McDonalds. As a gigantic organization of the world need to build their strong organizational structure so does McDonalds. Its works on the basis of vertical and horizontal coordination. All the executives from up to the lower management on making it a successful organization.