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SUBMITTED BY = Mian Rizwan Ahmad

SUBMITTED TO = Sir Fahad Jawed


BBA-FA09-129 Sec-B



McDonald's Corporation is the world's leading food service Organization. Started out as a small drive-through in 1948 by Two brothers, Dick and Mac McDonald. In 1961 Kroc bought out the McDonald brothers. By 1967 McDonalds expanded its operations to countries outside the U.S.A. (today worldwide, over 31000 restaurants) In addition, McDonald's opens a new restaurant every three Hours. Big Mac, the world's most sold hamburger was developed by Jim Delligutti in 1967 to feed construction workers.


We serve people with good quality food, fast and at low cost. McDonald's vision is to dominate the global food-service industry. Global dominance means setting the performance standard for customer satisfaction and increases market share and profitability through successfully implementing our convenience, value and execution strategies.

TQM Performance objectives Speed Cost Quality Dependability Flexibility

Total Quality Management

McDonalds also practice the strategy of total quality management and tries to enhance its efficiency & affectivity level by working In different areas such as Product Quality-McDonalds works a lot in the quality improvement of its goods by improving ingredients and nutrients of the food stuff. Training -In the next step of TQM, McDonalds puts it attention on its human resources. The objective of training their human resources is to create a balance in the overall working of employees. Thus they try to create a connection between the quality of a product and the ability of the employees.

Continuous Improvement
The quality management strategies of McDonalds for product quality improvement and employee training and development put the company on the road of continuous improvement in all its functions. Continuous improvements fulfill the needs of the

customers according to their desires or requirements and also make its products more competitive.

Customer Satisfaction
The improved quality standards, well trained employees and a continuous learning desire of McDonalds results in increased level of satisfaction of the customers. Like when the quality is improved and the personnel attending the customers is well trained and the overall service environment is improved then there is no room left for customer dis-satisfaction.

Employee Involvement
the McDonalds Legal Department initiated a pro bono program in 2000.Through this program, McDonalds works with numerous public service organizations to provide legal assistance to lowincome individuals and to help elementary and secondary students from diverse backgrounds develop the skills, knowledge and attitudes necessary to serve their communities as active, responsible citizens. In January 2010, McDonalds launched a more formalized corporate volunteer program that includes an online volunteerism management and tracking tool developed in partnership with Volunteer Match, group volunteer activities and incentives such as a monthly raffle for a donation to the winning volunteers charity of choice. Participation rates among Home Office employees continue to rise and currently stand at almost 35% (2011).

Supply Chain Management

These strategies determine what is to be made an d w h a t i s t o b e p u r c h a s e d . S o McDonalds follow these strategies and have a just-in-time inventory system. Which means that the orders are placed as the raw material comes to near finish. McDonalds maintain no inventory levels for perishable goods. Suppliers 1= the major suppliers of McDonalds in Pakistan are as follows: 2= Dawn Breads for Buns 3= Choudhry Dairy Limited for dairy products 4= Walls Ice Cream 5= Coca-Cola Ltd. for drinks 6= Packages for packing Supplier power is high in this industry because there is lesser number of suppliers and customers can not switch to other brands because each brand has created its own image in consumer minds, thats why consumer cannot switch to other brands. On the other hand, McDonald has established long term relations with its suppliers because it purchases in large volume, in this way the supplier power is reduced and McDonald purchases its supplies on the low price basis and it avails the benefits of economies of scale. And the brand offered by the supplier is not differentiated so it makes easy for McDonald to switch to another supplier and decreases the suppliers power. The only factor that gives some power to supplier is the switching costs for McDonald's if it goes to any new supplier it will have to abolish old arrangements and develop new ones.

Measuring performance
The main metrics we use to measure Company performance for determining payouts for our executives include our stock price; earnings per share or EPS; return on total assets; and Brand McDonalds operating income, which is our operating income from all Company-operated and franchised restaurants excluding those not operated under McDonalds brand name. With the exception of stock price and return on total assets, these metrics are expressed in constant currency to exclude the period-to-period effects of currency translation. Management reviews and analyzes business results in constant currencies and bases compensation decisions on these results because we believe results expressed in constant currency better reflect underlying business trends. In evaluating the individual performance of our named executive officers when determining annual base salary, annual cash incentives and annual grants of equity-based compensation, we consider a number of qualitative factors which emphasize sustained levels of strong performance. The primary factor is results achieved (including in years prior to the year of the salary review). We also measure individual performance from various perspectives that include setting and achieving goals that are in line with McDonalds strategic focus. For example, our CEOs performance in 2006 was evaluated taking into account his three performance priorities: sustainable profitable growth; progress in our balanced active lifestyles initiatives; and talent management.

Operations Management in McDonalds

Operation management strategies being implemented by McDonalds: Goods & Service Design Quality Location Selection Layout Design Human Resource Supply Chain Management Maintenance

How is implemented the Quality System

Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Quality Service The Employees The Food The Restaurant Quality Control

How is implemented the Quality System? 1= the Employees

Are at work on time, are neatly dressed, and are clean Must make sure that the customers constantly receive safe Food, which implies that the employees must wash their Hands often to remain clean Must follow certain Standard Operational Procedures, so The customers always receive exceptional quality and Service (like using gloves) Employees rely on teamwork and high energy to get the job done Keep the smile up when serving 2= the Food Meat and fries have to be properly fried Vegetables are thoroughly washed when Used in the food 3= the Restaurant 1-Should be clean 2- Have to be tidy, sparkling and spotlessly clean 3- Food delivers fast, accurate and friendly service

Quality, Service, Cleanliness & Value, (QSC&V), are 4 elements that summarize MD pledge to all our customers. Our commitment to QSC&V represents the quality of our products, employees, suppliers, systems and processes throughout the supply chain. Systems and processes are only part of the quality equation, and dedicated people are the key. Around the world, McDonalds knows how its products are handled and prepared. McDonalds employees are trained to prepare and present meals according to very specific procedures that are strictly enforced. For example, a ten-minute holding time for sandwiches ensures maximum quality and freshness to each customer. McDonalds even designs our restaurants to meet the ultimate in hygiene specifications, including hand-washing procedures. In addition, the staff is also trained to maintain the right procedures, food quality and safety, especially in the preparation and handling of raw and cooked products.