Mcdonalds India Supply Chain Management

all in allow for Chain Management SUPPLY CHAIN ASSIGNMENT ON SUBMITTED TO- MS HARLEEN SAHNI SUBMTTED BY- ANKKIT RAJ McDonalds raft is the worlds stupendousst bowed stringed instrument of ground beef disruptive feed eating places, serving around 68 million customers daily in 119 countries. Headquartered in the coupled States, the ships company began in 1940 as a barbecue restaurant operated byRichard and Maurice McDonald and in 1948 they reorganized their ancestry as a hamburger stand usingproduction lineprinciples. BusinessmanRay Kroccoupled the company as a franchise agent in 1955.He subsequently purchased the chemical chain from the McDonald brothers and all oversaw its worldwide recrudesceth. A McDonalds restaurant is operated by either afranchisee, anaffiliate, or the corporation itself. The corporations revenues deign from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonalds revenues grew 27 percent ove r the three historic period cease in 2007 to $22. 8 billion, and 9 percent growth in operating income to $3. 9 billion. Most stand exclusively McDonalds restaurants offer some(prenominal)counter serviceanddrive-throughservice, with indoor and some sendecadeces outdoor seating.Drive-Thru, Auto-Mac, Pay and Drive, or McDrive as it is cognise in umpteen countries, often has separate stations for placing, paying for, and picking up orders, though the last menti mavind deuce steps argon frequently combined it was head start introduced in Arizona in 1975, sideline the lead of other truehearted- nutrition chains. The first such restaurant in Britain opened atFallowfield,Manchesterin 1986. McDonalds fraternity earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants.Approximately 15% of McDonalds restaurants atomic number 18 owned and operated by McDonalds Corporation unionizely. The remainder is operated by others through a variet y of franchise agreements and joint ventures. The McDonalds Corporations phone line modelis middling distinct from that of most other fast- regimen chains. In addition to ordinaryfranchisefees and grocery line of descenting fees, which be cipher as a percentage of sales, McDonalds may also collectrent, which may also be reckon on the basis of sales.As a condition of some franchise agreements, which vary by contract, age, region, and location, the Corporation may own or lease the properties on which McDonalds franchises ar determined. In most, if not all cases, the franchisee does not own the location of its restaurants. The United Kingdom and Ireland business model is different than the U. S, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonalds trains its franchisees and others atHamburger UniversityinOak Brook,Illinois.In other countries, McDonalds restaurants are operated by joint ventures of McDonalds Co rporation and other, local anesthetic entities or governments. As a matter of policy, McDonalds does not fabricate direct sales of victuals or materials to franchisees, instead organizing the issue of provender and materials to restaurants through approved third troupe logistics operators. McDonalds restaurants are implant in 119 countriesand territories around the world and serve 58 million customers each day. McDonalds operates over 31,000 restaurants worldwide, employing more than 1. million people. The company also operates other restaurantbrands, such as Piles Cafe. cogitate on its core brand, McDonalds begandivestingitself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexi stack Grilluntil October 2006, when McDonalds fully divested from Chipotle through a stock exchange. Until December 2003, it also ownedDonatos Pizza. On August 27, 2007, McDonalds soldBoston MarkettoSun Capital Partners. MCDONALDS INDIA INDIA AS A m arket placeIn 1996, McDonalds opened inIndiafor the first time, a country where the majority of the population was Hindu and ve put warearian, and the cow was sacred. Many saw it as just another example of the relentless spread of Western corporations into ein truth nation, creating a global formation in which wealth was drained out of local economies into the hands of a very few, very fatty elite. McDonalds opened its doors inIndiain October 1996, demonstrating what the McDonalds experience was all about. McDonalds inIndiawas a 50-50 joint venture confederacy between McDonalds Corporation (U.S. A. ) and two Indian businessmen. Amit Jatias company, Hardcastle Restaurants Pvt. Ltd. , owned and operated McDonalds restaurants in WesternIndia, while Connaught Plaza Restaurants Pvt. Ltd. , headed by Vikram Bakshi, owned and operated the North Indian operationsi. These companies signed their joint-venture agreements with McDonalds in April 1995 and a farsighted with their Indian manag ement team instruct in McDonalds restaurants in In makesia and the U. S. A. earlier opening the first McDonalds restaurant inIndia. The entry of McDonalds inIndiawas suddenly timed.The market had begun to open up. The economy of the country was growing stronger. The customer markets were eager to acquire newer products and example newer forms of go. strange brands were valued and perceived to be superior in feeling. According to a report of AC Neilson, among the worlds consumers, Latin Americans and Asians were the biggest supporters of globalisation and the value that it added to the various aspects of their livesii. It was a favourable situation for McDonalds because at the time when they entered,India, the Asian tiger was awakening to the global call.The Indian customer was enthusiastic about the market situation which set asided them with numerous choices to postulate and pick. In a way McDonalds revolutionized the food selling business inIndia. It introduced the India n customers to service standards which were ready(prenominal) in the western world for age. These service standards were visible and noteworthy and hence triggered quick acceptance within the customers. McDonalds positioning inIndiaas a family restaurant further fuelled its victory. DIVERSITY IN THE INDIAN MARKET Indiaas a market was a unique example of diversity.Divided into 28 states and 7 union territories, the vegetation, climate, religion, language, clothing, and food varied from one state to another. With the combination of spices in a unique way, food of these states reflected their traditions and culture. Hence the biggest take exception to any food business inIndiadefinitely was about balancing the diversity and the product offerings. McDonalds got dynamic headroom from Foreign Investment Promotion Board (FIPB) ofIndiain 1991. entirely it was havely after five years of preparation, that the first restaurant became operational in 1996.It make believeed on wear o uting local relationships with local segmentationners to facilitate the lancinating material. Indian companies for their operational convenience had divided the Indian subcontinent into tetrad zones, the progressive West, the powerful North, the traditional and culturally rich, South and East. McDonalds opened their first restaurant in the capital ofIndiawhich is Delhi. The second restaurant was opened in the financial capital ofIndia, Mumbai. McDonald initially concentrated in the West and North regions.Later the company exhibited ambitious plans for enlargement in Eastern and Southern regions. McDonalds real influence had been in establishing organizational placements of complete support at every stage from raw product to factory, from worker to consumer backed by incessant media hype. McDonalds had been a productive global food corporation at refining, co-coordinating, standardizing and developing such subroutinees into a integrality system. It had set up these practi ces in every country it had moved into, and many other companies followed their suit.What Ford Motor Company did for cars, travelling and the urban environment McDonalds had done for food and eating habits. McDonalds expansion was criticized and resisted by trade unionists, local residents, nutritionists and many others in almost every town and country where they planned a new store contempt their highly developed and expensive marketing effort about be a benefit for the community. They were resisted for what they represented, and remained a focus of controversy. CHALLENGES FACED BY MCDONALDS IN INDIA Vegetarianism The major issue was beef.Cow being sacred and worshipped, beef could not be served. Muslims did not eat pork barrel. The challenge was to change the form of the worldwide popular Hamburger to make an entry intoIndia. With 25-30% of the population being lacto vegetarian and a large majority eating meat, an alternative to beef and pork was necessary. Competition from L ocal Food Retailers The competition from the local food retailers was intense. The food retailers had been doing business for years. Their familiarity with the market and the taste of the local taste gave them a competitive edge.There were numerous eating joints which offered snacks and meals with affordable price tags. Target merchandising Operation Excellence Food Innovation Value propositions had to be directed to the right target market to establish a new product. An interesting question was who would eat at McDonalds? In order to develop the marketing strategy, it was important for any company to understand the consumer market. The more one knew and understood about consumers, the more effectively one could communicate and market to them Brand Trust Pricing MCDONALDS SUPPLY CHAINAn effective tag on chain is an intricate network of providers, distributors and customers who share carefully managed information about demand, decision and performance, and who recognize that succes s for one slice of put up chain means success for all. McDonalds is the undivided largest food chainservice retailer in the world. It serves around 45 Million customers everyday in 121 countries. It has 29,000 restaurants worldwide. It is also the single largest real estate owner. In India, McDonalds do its presence felt in the year 1996.It has 30 restaurants in 5 different cities In India. 95% of the ingredients/products used by them are sourced topically. McDonalds restaurants in the south and west of India function under Hardcastle Restaurants Private Limited which is a Development Licensee. Amit Jatia is the Vice-Chairman of the company. For the north and eastern hemisphere of India, McDonalds has formed a joint venture with Connaught Plaza Restaurants Private Limited of which Vikram Bakshi is the Managing Director. These two companies monitor, inspect and judicially promote the brand of McDonalds in the country.The main business comes from Delhi, Mumbai, Jaipur, Pune and M athura. McDonalds had been working on its issue chain even before it opened its first joint in the country. McDonalds, an transnational brand which was arduous to make inroads into the country, developed its Indian partners in such a manner that they stayed with the company from the beginning. McDonalds sp death around 6 years in scenery up its supply chain in India. The ism of its supply chain is nothing but partnering with its suppliers, so that a win-win situation can be achieved and both can earn evenue, the summation logistics and other cost can be lowered, expertise of the supplier go out give an ad new wavetage etc. The main factors to focus here are supplier partnering elements shared information, expectations, risk of exposures and payback, long term commitment, periodic reviews, compatible culture and the most important mutual understanding. The success of McDonalds India was achieved by sourcing all its required products from within the country. To get a line t his, McDonalds developed local businesses, which can supply it highest quality products.Today, McDonalds India works with 38 different suppliers on a long term basis and several other stand alone restaurants for its various other requirements. McDonalds scattering centres in India came in the following order Noida and Kalamboli (Mumbai) in 1996, Bangalore in 2004, and the modish one in Kolkata (2007). McDonalds entered its first scattering partnership agreement with Radha Krishna Foodland, a part of the Radha Krishna Group engaged in food-related service businesses. The association goes back to July 1993, when it studied the nuances of McDonalds operations and requirements for the Indian market.As distribution centres, the company was responsible for procurement, the quality inspection programme, storage, inventory management, deliveries to the restaurants and data collection, recording and reporting. Value-added services corresponding shredding of lettuce, re-packing of promoti onal items continued since past at the centres playing a vital role in controling the equity of the products throughout the entire arctic chain. While the supply chain of McDonalds at first glance appears simple, its diverse components are both critical and multi-layered. Food ingredients are supplied by two categories, Tier-I and Tier-2 suppliers.Tier-2 suppliers even off growers and processors who include importantly, lettuce and potato growers, poultry farms and companies which manufacture coating systems that coat the vegetable and chicken patties. The ingredients are supplied to Tier-I suppliers who process them, for instance, into vegetable and chicken patties this is done by facet graceful Foods Pvt. Ltd. or potato products like cut fries, potato wedges and hashbrowns which are expertly churned out by McCain Foods India Pvt. Ltd. The products are then transported in a sanctified fleet of preserve hand trucks to the companys statistical distribution Centers.Multi-te mperature and single temperature trucks then transport the fast food swiftly to the 217 McDonalds restaurants across the country. The supply-chain of McDonalds has also been expertly devised to include the significant aspect of issue logistics. They find a large component of return logistics. The buns are packed in shaping crates to ensure their quality. These crates have to go back to the logistics facility, thats where return logistics comes in. From there they are sent to the bakeries. proviso of Ingredients Special vegetarian sauce Quaker, Cremica, Phillaur, PunjabSesame seeds Ghaziabad, UP Iceberg Lettuce Ferrocoa Farms, Dehradun Buns Shah & Sons,Khopoli,MH & Cremica Industries, Noida Vegetable Patty Kiltran Foods, Taloja, Maharashtra Batter & Breading Cremica Industries, Ludhiana, Punjab Ingredients from across the country DISTRIBUTION CENTRES The fast food chain has four Distribution Centers across the country to serve its 217 restaurants. The DCs have segued seamlessly w ith the vision of the company which has embarked on a period of roller coaster growth, with one McDonalds outlet being launched every ten days in the countryThe company owns DCs in Noida and Mumbai which are primary Distribution Centers. The other two Distribution Centers are in Bengaluru and Kolkata and are housed in leased properties. The supply-chain of the fast food chain is in effect a hub-and-spoke model because the DCs act as hubs. The transportation of McDonalds has been completely outsourced and since 80 percent is refrigerated truck movement, the company has a devote fleet which transports their goods. OUTSOURCING The success of the supply-chain model of McDonalds can be directly attributed to its unique concept of outsourcing work.Unlike other corporate heavies, the company has a 100 percent outsourced supply chain. McDonalds believes that they should outsource everything to a company who are experts in their subject matter and then monitor their performance in a proper fashion so that Key Performance Indicators (KPIs) are not affected at all. This is how McDonalds operates not just in India, but everywhere. Underlying the suppleness of its supply-chain are three principles to which the company adheres unwaveringly, the principles of trust and collaboration between the brand, the owners or operators, and the suppliers. Its like a three-legged stool. Each leg (principle) has to be equally strong so that theres no collapsing foundation. McDonalds also believes in a culture of partnership and hydrofoil with its suppliers. They have 100 percent transparency in everything that they do which is very critical for them when they work with their suppliers. McDonalds has 14 core suppliers who supply directly to the fast food chain and they are known as Tier-I suppliers. Examples of Tier-I suppliers are Vista graceful Foods Pvt. Ltd. , the Dynamix Group, Mrs Bectors, etc.The other suppliers forward ingredients to the Tier-I suppliers first and they are term ed Tier-2 suppliers. The fast food chain has a total of 40 suppliers from whom it sources its ingredients. Most of the suppliers are local, but some are world-widely storied foreign brands like McCain Foods India which set up shop in India when McDonalds ventured into the fast food business in the country. For a McDonalds supplier the terms of work are rigorous. A companys stellar credentials are not enough the suppliers job does not end when the product leaves his premises, rather it ends sole(prenominal) when the customer consumes it.McDonalds expects its suppliers to personally ensure the quality of their products to skirt the risk factor. Suppliers like Coca Cola which is McDonalds beverage partner also, for instance, take water management classes in its restaurants to ensure potable quality of drinking water. Sole Distribution Partner McDonalds products are distributed by Radhakrishna Foodland Pvt. Ltd which is the hardly distribution partner of the fast food chain. RK Food land manages the four DCs and since it has a transport division, handles the truck movement in the supply-chain right through the country.McDonalds expects its distribution partner to meet its standards of refrigerant, clean and on-time delivery . RK Foodland expertly manages the unremarkable day-to-day activities of the fast food chain like raising purchase orders to suppliers, invoicing, keeping an astute centre of attention on working capital management, timely delivery, payments, etc. They are like a one-stop shop for the restaurants. Anything that is required, from a bulb that indispensabilitys to be changed in a restaurant to training material, is sourced directly from RK.There are only two products, buns and Cokes, which are sent directly to the restaurants. Buns have a limited ledge life, hence they are sent directly to the outlets, while Coca Cola has a well-oiled distribution system which ensures quick dispatch of its products. As with its suppliers, McDonalds has no l egally documented Service Level Agreements (SLAs) with RK Foodland. The fast food chain carefully calibrates the performance of its distribution partner, measuring it against its own KPIs to ensure its performance does not dip below its own exacting standards.The DCs are assessed on several factors like administration efficiency, the total number of cases managed per man hour, warehouse efficiency, overtime as a percentage of the total number of hours worked and in the case of transportation, the number of cases handled per trip, truck utilization, etc. McDonalds constantly scrutinizes the performance of RK Foodland against these KPIs if its distribution partner is uneffective to meet certain benchmarks, together they devise solutions which would enable them to achieve set goals. COLD CHAINA marked brag of McDonalds supply-chain is that the entire network consists of movement of goods through a chilly chain. In effect, the suppliers are also a part of this cold chain and in certa in cases, for instance, the lettuce growers, the cold chain begins with the Tier-2 suppliers. McDonalds have the largest refrigerated movement of products in India. An interesting and innovative feature of this cold chain is that the same truck can carry products at different temperatures, ranging from quick-frozen products at -18C to -25C, chilled products from 1C-4C and dry products at ambient temperatures.Apparently, McDonalds is the only company whose supply-chain network is characterized by this successful experimentation. The inbound supply chain of McDonalds now consists of dedicated reefer trucks supported by dedicated and trained manpower. As the store numbers and distances increased, they decided to come out with a design of multi-temperature vehicles which could carry all three temperature products. They are installed with automatic temperature controller. Truck containers were made with two side doors in addition to the rear door.The side doors are used to unload produc ts without deplorable the products in the other temperature zones. The delivery window is +/-2 days. The products are of three types i. e. frozen products, chilled products and dry products. The frozen products need the temperature from -15 to -25 deg C, the chilled products from 1 to 4 deg C and the dry foods from 24 to 30 deg C. This finesse and attention to detail has helped McDonalds achieve its own USP of quality, standards of service, cleanliness and value. McDonalds efficiency and effectiveness are also payable to the fact that it has a pull-supply chain. The restaurant issues orders to the Distribution Center which, in turn, routes the order to the supplier and only then does the supplier produce it. The supplier thus maintains barely any extra stocks only if there is a contingency, like the overhaul or servicing of machinery, will the supplier produce surplus stocks. Cold Chain was one of the unique concepts of McDonalds supply chain in India, on which it had spent more t han six years to get the system into place.This system brought about a veritable revolution, immensely benefiting the husbandmans at one end and enabling customers at retail counters get the highest quality food products, absolutely fresh and at great value. Through its unique cold chain, McDonalds has been able to both cut down on its operational wastage, as well as maintain the glow and nutritional value of raw and processed food products. This has involved procurement, warehousing, transportation and retailing of putrescible food products, all under controlled temperatures.The following list of suppliers, who build up the major supply chain of McDonalds, reveal how this Cold Chain works and contributes towards the efficiency of McDonalds. * Dynamix Dairy Industries (Supplier of Cheese) Dynamix has brought immense benefits to farmers in Baramati, Maharashtra by setting up a network of milk collection centres equipped with bulk coolers. Easy accessibility has enabled farmers ca st up their income by finding a new market for surplus milk.The factory has * Fully automatic international standard treat facility * Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanized baby food. * Stringent quality control measures and continuous Research & Development From farm two degrees Celsius in 90 minutes is the first step to quality. For example, the Rs 262-crore Dynamix Dairy Industries, located in Baramati in Pune district of Maharashtra, manufactures cheese slices for McDonalds at 10 metric tonnes per month.Dynamix has helped set up 15 bulk chill centres throughout the district from which it purchases milk. Each cooling centre, which is equipped with modern measuring and testing equipment and a large cooling tank, is not more than a few kilometers away from local dairy farms. A farmer can deliver milk even twice a day on his bicycle and get a printed receipt on the spot, which also lists the quality of the milk supplied by him as per fat content, wring and solids content. If the milk is sub-standard or adulterated, it is rejected on the spot. A batch of milk can vary from one litre to 10 litres, or more.Each batch is mixed in one large stainless steel cooler and chilled immediately to two degrees Celsius to stop bacterial growth and preserve freshness. From this point onwards, until just before the burger is actually served in a McDonalds restaurant hundreds of kilometers away, the temperature is never allowed to increase. When the refrigerated milk arrives at the Dynamix graft at Baramati, the milk in every single tanker is thoroughly tested and rejected if found sub-standard, adulterated or contaminated. The sophisticated testing lab can check fat content with an trueness of 0. 1 per cent.It can even detect minute traces of pesticides or antibiotics administered to cows. This instant feedback and the rejection of the entire tanker-load forces farmers to follow the outmatc h practices in terms of animal husbandry, use proper feeds, cut down on the indiscriminate use of pesticides and animal medicines and completely stop even the slightest attempts at adulteration. * Trikaya Agriculture (Supplier of Iceberg Lettuce) Implementation of advanced unsophisticated practices has enabled Trikaya to successfully grow specialty crops like iceberg lettuce, special herbs and many oriental vegetables.Farm infrastructure features * A specialized nursery with a team of agricultural experts. * Drip and sprinkler irrigation in raised farm beds with plant food mixing plant. * Pre-cooling room and a large cold room for post harvest handling. Refrigerated truck for transportation. Trikaya Agriculture, a major supplier of iceberg lettuce to McDonalds India, is one such enterprise that is an intrinsic part of the cold chain. Exposure to better agricultural management practices and sharing of advanced agricultural technology by McDonalds has made Trikaya Agriculture extrem ely conscious of delivering its products with tip care and quality.Initially lettuce could only be big during the winter months but with McDonalds expertise in the area of agriculture, Trikaya Farms in Talegaon, Maharashtra, is now able to grow this crop all the year round. McDonalds has provided assistance in the selection of high quality seeds, undecided the farms to advanced drip-irrigation technology, and helped develop a refrigerated transportation system allowing a small agri-business in Maharashtra to provide fresh, high-quality lettuce to McDonalds urban restaurant locations thousands of kilometers away.Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room to remove field heat, a large cold room and a refrigerated van for transportation where the temperature and the relative humidity of the crop is maintained between 1? C and 4? C and 95% respectively. Vegetables are moved into the pre-cooling room within half an hour of harvesting. The pre-cooling room ensures rapid make clean cooling to 2? C within 90 minutes. The pack house, pre-cooling and cold room are located at the farms itself, ensuring no delay between harvesting, pre-cooling, packaging and cold storage.With this cold chain infrastructure in place, Trikaya Agriculture has also a plan to export this high value product to other international markets, especially to McDonalds Middle East and Asia Pacific operations. McDonalds expertise in packaging, handling and long-distance call transportation has helped Trikaya to do trial shipments to the Gulf successfully. In addition to export, McDonalds assistance has enabled Trikaya Agriculture to supply this crop to a number of star-rated hotels, clubs, flight kitchens and offshore catering companies all over India. * Vista urbane Foods Pvt.Ltd. (Supplier of Chicken and Vegetable range of products including Fruit Pies) A joint venture with OSI Industries Inc. , USA, McDonalds India Pvt. Ltd. and Vista Processed Foo ds Pvt. Ltd. , produces a range of frozen chicken and vegetable foods. A world class infrastructure at their plant at Taloja, Maharashtra, has * Separate treat lines for chicken and vegetable foods. * Capability to produce frozen foods at temperature as low as -35 spirit level Cel. to retain total freshness. * International standards, procedures and support services. Vista Processed Foods Pvt. Ltd. McDonalds suppliers for the chicken and vegetable range of products, is another important player in this cold chain. skilful and financial support extended by OSI Industries Inc. , USA and McDonalds India Private Limited have enabled Vista to set up world-class infrastructure and support services. This includes hi-tech refrigeration plants for manufacture of frozen food at temperatures as low as 35 C. This is vital to ensure that the frozen food retains it freshness for a long time and the cold chain is maintained. The frozen product is immediately moved to cold storage rooms.With con tinued assistance from its international partners, Vista has installed hi-tech equipment for both the chicken and vegetable processing lines, which reflect the latest food processing technology (de-boning, blending, forming, coating, frying and freezing). For the vegetable range, the latest vegetable mixers and blenders are in operation. Also, keeping cultural sensitivities in mind, both processing lines are absolutely segregated and utmost care is taken to ensure that the vegetable products do not mix with the non-vegetarian products.Now, at Vista, a very wide range of frozen and nutritious chicken and vegetable products is available. Ongoing R&D, both locally and in the parent companies, work towards innovation in taste, nutritional value and convenience. These products, besides being supplied to McDonalds, are also offered to institutions like star-rated hotels, hospitals, project sites, caterers, corporate canteens, schools and colleges, restaurants, food service establishments and coffee shops. Today, production of better quality frozen foods that are both nutritious and fresh has made Vista Processed Foods Pvt.Ltd. a foretell to reckon within the industry. * Radhakrishna Foodland (Distribution Centres for Delhi and Mumbai) An integral part of the Radhakrishna Group, Foodland specializes in handling large volumes, providing the entire range of services including procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting. Salient strengths are * A one-stop shop for all distribution management services. * Dry and cold storage facility to store and transport perishable products at temperatures upto -22 Degree Celius. Effective process control for minimum distribution cost. McDonalds local supply networks through Radhakrishna Foodland, which operates distribution centres (DCs) for McDonalds restaurants in Mumbai and Delhi. The DCs have focused all their resources to meet McDonalds expectation of Cold, Clean, and On-Time Delivery and plays a very vital role in maintaining the integrity of the products throughout the entire cold chain. Ranging from silver-tongued products coming from Punjab to lettuce from Pune, 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 McDonalds restaurants on the basis of their requirements. 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. * Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts) Amrit Food, an ISO 9000 company, manufactures widely popular brands Gagan Milk and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh.The factory has * State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene. * Installe d capacity of 6000 ltrs/hr for producing homogenized UHT (Ultra High Temperature) processed milk and milk products. * Strict quality control supported by a fully equipped quality control laboratory. All suppliers adhere to Indian government regulations on food, health and hygiene while continuously maintaining McDonalds recognized standards.As the ingredients move from farms to processing plants to the restaurant, McDonalds Quality Inspection Programme (QIP) carries out quality checks at over 20 different points in the Cold Chain system. Setting up of the Cold Chain has also enabled it to cut down on operational wastage Hazard Analysis Critical Control Point (HACCP) is a systematic near to food safety that emphasizes prevention within its suppliers facility and restaurants rather than detection through inspection of malady or presence of microbiological data.Based on HACCP guidelines, control points and critical control points for all McDonalds major food processing plants and res taurants in India have been identified. The limits have been established for those followed by monitoring, recording and correcting any deviations. The HACCP verification is done at least twice in a year and certified. The relationship between McDonalds and its Indian suppliers is mutually beneficial. As McDonalds expands in India, the supplier gets the opportunity to expand his business, have access to the latest in food technology, exposure to advanced agricultural practices and the ability to grow or to export.There are many cases of local suppliers operating out of small towns who have benefited from their association with McDonalds India. Pictorial Description McDonalds India sources its ingredients from local suppliers who are an integral part of the cold chain. Refrigerated trucks with multi temperature facility divided into 3 zones freezer, chiller and ambient to ferry product demanding varying temperature from suppliers location to the distribution centre.Distribution centr e is also divided into multi-temperature zones like trucks with freezer at 0 degree F to 33 degree F. Restaurants have in-built cold storage units subdivided into same aforesaid zones- freezer, chiller and ambient. IN A NUTSHELL Forecasting Demand Equally eye-popping is the accuracy of the demand bets. The restaurants give a three-day to one-week forecast to the Distribution Center. The DC, in turn, has a three-month rolling forecast with the suppliers which enable them to plan their production schedules meticulously.For extensive long-term planning, McDonalds has devised the 31Q system3 stands for the three years that the fast food chain will keep checking its plans, 1 represents the detailed forecast of the next year and Q symbolizes the quarterly monitoring of these forecasts. While preparing the annual budget, they include their suppliers in the budgeting process, briefing them on the new products and restaurants to be launched. Using this information, the suppliers roll out t heir production schedules. The schedule for the next year is carefully fixed and then stringently monitored.Once the forecasts are closed and the budgets fixed, the plan schedules and performances are monitored every quarter, also to ensure that there is no dip in performance. With 217 restaurants scattered across the country, lead times for delivery assume critical importance. But McDonalds supply-chain network is everything it is supposed to be to ensure spot on distribution. Every restaurant manager knows the exact time of arrival of each product which enables the supply chain team to work backwards to ensure timely distribution. They have fixed locations of suppliers and restaurants and their own fleet of dedicated trucks and cleaners.They can predict the amount of time it takes for a product to reach from an X location to a Y location. If a truck takes four or five days to travel between a suppliers premises in Taloja, Maharashtra, to Noida in the National Capital Region, dedic ated McDonalds trucks will accomplish it in two days due to non-stop running of the fleet. This ensures that the lead times for their trucks and deliveries are pretty much predictable. With a maximum inventory of ten days in its system, McDonalds maintains an efficient inventory turn ratio of 36.Tech Prowess The supply-chain network of McDonalds, which appears to work effortlessly, is powered by various IT systems which enhance its effectiveness. Vista Processed Foods Pvt. Ltd use SAP, Tier-1 supplier of the chain. Distribution Centers of RK Foodland are on RAMCO Marshall ERP with Cobra software. These systems are used to directly upload store orders. At the restaurant level, the fast food chain has in-house developed technologies which track day-to-day sales, enables restaurants to schedule staff and send forecast orders to DCs.