Mcdonald'S Supply Chain Management Case Study

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An article examining Mc Donald's supply chain practices reveals the company responded to a wave of negative documentaries, like "Fast Food Nation" and "Super Size Me," by increasing the transparency in its supply chain.

By tapping into its close ties with its suppliers, the company was able to weather the storm of poor publicity by revealing the veracity of its products: beef was beef, after all.

Rule 5: Govern For Insight, Not Oversight Mc Donald’s and its suppliers do business the old-fashioned way – with a handshake instead of a formal agreement.

When you have a “no contracts” philosophy with suppliers, values matter when it comes to governance, or as Kroc wrote, “The basis for our entire business is that we are ethical, truthful, and dependable.

Rule 1: Focus On Outcomes, Not Transactions Mc Donald’s consciously makes a decision to NOT conduct business with strategic suppliers on a transactional relationship - but instead insists suppliers have long-term relationships that drive business value and achieve Mc Donald’s key business outcomes.

Rule 2: Focus on the What, Not the How One of the ingredients of Kroc’s secret sauce was to know Mc Donald’s core competency versus his suppliers.

But it has nothing to do with condiments and herbs.

The secret sauce of Mc Donald’s success is found within long-term transparent relationships based on the unwavering belief that everyone in the Mc Donald’s “System” can and should win.

But Mc Donald‟s has complete control over its functioning.

The performances of outsourced companies are monitored on Key Performance Indicators (KPIs).


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