Managing stock to meet customer needs
A McDonald's Restaurants case study

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Page 4: Stock control charts

a forecast of the productA stock control chart shows the balance of orders for new stocks against sales. The system is dependent on figures for expected sales. For example, if sales of burgers are going out of the system, then stocks of beef patties need to be coming into the system.

Manugistics uses two years' worth of product mix history to produce forecasts for each restaurant. This uses time series analysis. The planner will apply a causal factor (the blue blocks in the example) to the time series for the start and end date of this promotion. Using complex calculations, the graph then produces a forecast - seen below circled red.

Entering data

Any system is only as good as the data that is provided. Therefore, McDonald's Restaurant Managers need to ensure that the data they enter into the system is as accurate as possible. For example, each day, Restaurant Managers record opening and closing stocks of key food items. They record all other items weekly. The store computer system identifies any stock count deviations from the last stock count so managers can investigate. For example, the manager may have missed off a box of organic milk whilst counting them earlier on in the shift.

Buffer stock

Restaurants hold a small buffer stock. This is an extra quantity of stock held to meet unexpected higher demand. It is also the point at which more goods are ordered the re-order level.


stock ordering

McDonald's store managers use a simple web-based communication tool called 'WebLog' to view and amend store Order Proposals. Every day WebLog creates a proposed order for the manager to analyse and amend if necessary. WebLog enables managers and central planners to see what quantities have been ordered, what the current stock levels are and exactly how much stock is due to be delivered at a particular time.

In the past, managers would have had to check their delivery for any shortages and input every item they had received. The system now automatically generates a delivery note that gives the exact quantities and descriptions of the delivery. All managers need to do is simply click 'confirm' on WebLog. This saves valuable time and makes the process more cost-effective.

McDonald's Restaurants | Managing stock to meet customer needs