McDonalds E-Procurement,

Logistics and Supply Chain

Management

Supply Chain
Management
by M. Ali Khan

McDonalds Supply
Chain, E Procurement
and Logistics

 Supply chain management is network of

interconnected business in the ultimate provision

of product and services require by end customer
Scm span all movement and storage of raw
material, work in process, finishes goods from
point of origin to point of consumption.

Mc Donald's scm integration

Successful scm require a change from managing

individual function integrating activities into supply

chain process.
Supply chain process integration involves
collaboration work between buyers suppliers,
common system and shared information.

Customer relationship management

Customer service management
Demand management
Order fulfillment
Manufacturing flow management
Supplier relation ship management
Product development and commercialization
Returns management
Procurement
Physical distribution
Out sourcing
Performance measurement

Supply chain strategies

Two types
Push strategy
Pull strategy

Push strategy
Communication between buyer and seller
Interactive and non interactive

Pull strategy
Ina pull strategy the customer request the product

and pulls through a delivery channel.

McDonalds E-Procurement
WHAT IS E-PROCUREMENT
BY
JAHANZAIB DILAWER
(MBE-SP08-13)

E-Procurement
E-procurement (electronic procurement,

sometimes also known as supplier exchange) is the

business-to-business or business-to-consumer or
Business-to-government purchase and sale of
supplies, Work and services through the Internet as
well as other information and networking systems,
such as Electronic Data Interchange and Enterprise
Resource Planning.

How E-Procurement Works

e-procurement is a Web sites that allows qualified

and registered users to look for buyers or sellers of

goods and services.
Buyers or sellers may specify costs or invite bids
online.
Customers can Qualify for volume discounts or
special offers on the web.

 It also allows automated buying and selling using e-

procurement software.

Ariba Buyer
Softwares of E-procurement System
Other softwares in E-Procurement System.
Coupa.
Mikrofax.

Types of E-Procurement
Web-based ERP

e-MRO
e-sourcing

e-tendering
e-reverse auctioning

e-informing
e-market sites

 There are seven types in E-Procurement:

Web-based ERP (Enterprise Resource

Planning):
(Creating and approving purchasing
requisitions, placing purchase orders and receiving
goods and services by using a software system
based on Internet technology.)
e-MRO (Maintenance, Repair and Overhaul).
(Only for maintenance and repairing concerns)
e-sourcing

(Identifying new suppliers for a specific category

of purchasing requirements using Internet
technology).
e-tendering:
(Sending requests for information and prices to
suppliers and receiving the responses of suppliers
using Internet technology).
e-reverse auctioning:

(Using Internet technology to buy goods and

services from a number of known or unknown
suppliers).
e-informing:
(Gathering and distributing purchasing
information)
e-market sites:
(Web-based ERP to open up value chains).

McDonalds E-Procurement System

McDonalds E-Procurement System is basically a

main reason for their successful supply chain

management.
It is so efficient that it provides the backbone not

only to all the logistics but the whole McDonalds

supply chain management.

How McDonalds Uses E-procurement Systems

Emac Digital:

(Internet procurement site designed for

McDonald's Corporation's 27,000 franchises )
Emac Digital Company is E-Procurement website

which is jointly owned by McDonalds and Accel-KKR

Internet Co.

 It is a procurement hub launched in 2001 allow all of

McDonald's franchises across the globe to buy

everything needed to run their restaurants.
From
uniform to HamBurger

 Aside from being faster and more convenient for

franchisees, the procurement site also allow business

owners to buy supplies and materials at a discounted
price, ultimately reducing costs for McDonald's.
E-Procurement allows 85% cut in costs according to

McDonalds supply chief Edwards.

Benefits For the Suppliers

McDonalds works with two types of suppliers.

Major Suppliers
Small Suppliers

Major
Supplier

Small
Suppliers

Emac
Digital

McDonalds E-Procurement Model

Global
Franchises
Supply Received

Place Orders

Emac Digital

Supplier
s

Logistics

 IP (Internet protocol) technology:

An IP connection would also open up a host of

options for McDonald's to collect data from its

consumers. Internet connections for kids at store
locations would not be out of the question. The
quicker connection would also allow McDonald's to
track purchases and offer customer loyalty programs.

 it will connect headquarters with stores.

Replacing traditional and old Dial-up Networking.

McDonald's can collect data much faster

 Working on SRM (suppliers relationship

Management) with Oak Brook.

Developing Next generation e-procurement software

POS.
So, McDonalds e-procurement system is benchmark

while provide final service to the customers form

suppliers to customers dish.

Ahmed Ishtiaque

McDonalds Logistics Standards

Distributor Quality Management Process

Operations and Customer Relations

Quality Control (HACCP/QIP)
Cold Chain Standards

Hygiene Regulations
Product Handling Standards
Emergency and contigency plan

McDonalds Logistics Standards

Risk and Crisis management
Continuous unannounced internal and 3rd party

audits for DCs result in superior quality scores

regularly

INFORMATION
Efficiency
Responsiveness

Transportation
The DCs have focused all their resources to meet

McDonald's expectation of 'Cold, Clean, and OnTime Delivery' and plays a very vital role in
maintaining the integrity of the products
throughout the entire 'cold chain'.

Transportation
The DC receives items from different parts of the

country.
These items are stored in rooms with different
temperature zones and are finally dispatched to the
McDonald's restaurants on the basis of their
requirements.

Transportation
The company has both cold and dry storage

facilities with capability to store products up to 22 C as well as delivery trucks to transport

products at temperatures ranging from room
temperature to frozen state.
The specially designed trucks maintained the
temperature in the storage chamber throughout
the journey.

McDonalds Distribution systems

McDonald uses three types of Distribution strategy
Franchising
Licensing
Joint ventures
I will discuss them briefly

McDonalds Distribution systems

Franchising
McDonald require franchising from countries on conditions like this
The entrepreneur should be trained.
45000$ in franchise fees which is higher than other fast-food companies
Total investment would range from 1 million to 1.8 million
After setting the entrepreneur will have to pay 12.5 % as royalty tax
Contract wll be for 20 years
Cash liquidity should be around 250000

McDonalds Distribution systems

Licensing
The Lakson Group of Companies is one of the largest and most well-

diversified companies in Pakistan with a range of foreign affiliated partners

that include Tetley Tea, Colgate-Palmolive, McDonalds, Kraft Foods and
Phillip Morris International.
Colgate-Palmolive Inc.:
30% equity ownership in Colgate- Palmolive (Pakistan) Limited
McDonalds Corporation:
Siza foods (Pvt.) Limited holds an exclusive Country Development License
for Pakistan.
Kraft Foods:
Holds an exclusive licensing exclusive Country Development License for
Pakistan.
Tetley Overseas Holdings Ltd:
50% equity ownership in Tetley Clover

McDonalds Distribution systems

Samsung Corby Crave Hit McDonalds: Samsung Electronics

Company Limited, as a joint promotion with McDonalds

Pakistan, has introduced the latest Samsung Corby Series mobile
phones at McDonalds outlets across Pakistan. McDonalds
customers are provided with a chance to win this fabulous
cellular product through participation.
The youth oriented series is focused on interactivity and is laced
with exciting features such as video, images, sound, music and
data sharing. The joint promotion aims to generate excitement
among the youth and providing them a feel of the touch phones
and boosting their comprehension.
Other than this McDonalds have license on Airports, Railways
etc.

waqar saleem pashah

McDonalds Distribution systems

Joint venture
GAM Corp (Private) Ltd is a joint venture company of McDonalds

Corporation USA. Mc Donalds is worlds leading Fast Food chain

having over 30,000 restaurants world wide. Total strength of staff in
Pakistan is 1800 person. It has successfully opened 14 restaurants in
Punjab.
Other than this TOYS R US is another joint venture

Thank you