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

Page 1: Introduction

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McDonald's is one of only a handful of brands that command instant recognition in virtually every country in the world. It has more than 30,000 restaurants in over 119 countries, serving around 50 million people every day. All businesses face challenges every day. One of the major challenges facing McDonald's is managing stock. Stock management involves creating a balance between meeting...
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Page 2: Types of stock

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[audio= of stock]

Stock is the physical product a company buys, creates or sells. Every business has three main types of stock: Raw materials The raw materials are the ingredients that will go into producing the finished product. For McDonald's, these will include the buns, beef patties, paper cups, salad ingredients and packaging. These are delivered to the restaurants between 3 and 5 times a week. The raw...
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Page 3: Stock management

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[audio= management]

Holding too much stock carries costs, so McDonald's runs a lean stock control to save money. Stock management is the process of making sure there is enough stock at all times to meet customer demands whilst minimising expensive waste. Planning and managing supply Ongoing communication between the central Restaurant Supply Planning team and individual restaurants helps to manage the stock...
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Page 4: Stock control charts

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[audio= control charts]

A 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...
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Page 5: Benefits to customers and restaurants

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[audio= to customers and restaurants]

The centralised stock management system generates many benefits. Many of these are for restaurants and Restaurant Managers. However, customers also benefit through improved customer experience customers can eat a quality product, in a clean environment, when they want it. Benefits include: Restaurants avoid running out of stock. As a result, customers can always receive what they order. The...
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Page 6: Conclusion

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Because McDonald's has taken much of the hard work out of stock management, Restaurant Managers are able to spend more time focusing on delivering McDonald's high standards of Quality, Service and Cleanliness. Customers are happy because they can be sure the item they want is on the menu that day. Efficient stock management is essential to any business. It enables the business to operate in a...
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