McDonald’s India Harvard Case Solution & Analysis

Identification of Issues

The major issue faced by McDonald’s in India was the high inflation rate in India that has been adding huge cost pressures on the company. The manager of the company was worried about eliminating importing fries completely from the supply chain. While India was the third largest producer of potatoes in the world, less than 1% of the potatoes were process grade. To qualify for French Fries production, a potato must have high solids, low sugars, large, rhombus shape, diseases resistance and long dormancy. Further, ideal potato growing and storage locations do not exist in India, and the climate of India allows the growth of potato only in winters. Moreover, the practices and irrigation process used in India for potato production was outdated that in turn limited the yields as well. Typical Indian potatoes have high sugars, low solids and they are smaller in size, which are not a perfect fit for the fries made by McDonald’s.

In addition to that, the farming process was not up to the mark as water, and electricity was wasted in the farming process and there were no facilities on the farm level to store the production. Furthermore, raw materials used in fries such as milk, wheat and potatoes do not meet the quality standards and target specifications by McDonald’s. Other than that, logistics and distribution were other issues as well as roads were very poor, and cold chain hardly existed. There were only 200 refrigerated trucks in the whole India, and the temperature controlled warehouses for potatoes were not available.

Emphasis on Local Management

To make emphasis on local management, McDonald’s had a motto that was based on thinking global and then acting global and this motto was applied in India as well. In order to implement this motto, the company has set-up a joint venture with two industrialists in India. Amit from Mumbai and Vikram from Delhi were selected to run a McDonald’s business in Mumbai and Delhi respectively. Both the entities were very strong in terms of business backgrounds and their successful management. As a result of these two entrepreneurs, success of McDonald’s in India became obvious.

Supply Chain of McDonald’s

Supply Chain Management:

Managing supply chain is one of the most significant aspects for the smooth and proper execution of the company. The basic purpose of supply chain is to analyze the sources for the components that are used in the product. In the process of supply chain management, the most important element to focus is the raw materials used in the product as it is necessary for the main product. In addition to that, the company tries to add value to the product through various steps of supply chain processes. The value can be added by providing efficient services that are not even expected by the customers. Other than raw materials, another important aspect of supply chain is driven by the consumers of the company. Now days, people have so many choices in terms of fast food restaurants and drive is the only way to motivate customers to leave the competitor’s product and make them eat at their restaurants.

McDonalds’s Supply Chain

The supply chain of McDonald’s is known to be one of the most efficient supply chains in the world and is counted as a major factor for the company’s business. The supply chain of the company is multifaceted and wide-ranging as well. It is proficient and well-organized, and that is why it is successful in delivering top quality food at an affordable price with no compromise on quality. Price and quality are not the only prominent factor in the supply chain success; there is more into it. The company is engaged in providing safety, good quality product and availability that can positively make its impact on the overall development in the economy. The company promotes the production in a way that promotes sustainable manufacturing and farming practices. The company works with both direct and indirect suppliers that can deliver the final product directly to McDonald’s, or they can grow products and deliver them to the middle suppliers, which then finally deliver them to McDonald’s................................

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