Operational Management at Mcdonald Essay
Operational Management at Mcdonald
One aspect of facilities layout for McDonald’s is that when customers come into the building, they line up in one of several lines and wait to be served. In contrast, customers at Wendy’s are asked to stand in one line that snakes around the front of the counter and to wait for a server to become available.
a) What is the rationale for each approach?
b) Which approach do you favour from (1) a customer’s perspective and (2) management’s perspective? Explain.
Rationale for McDonald approach
McDonald’s success had been built on four pillars: limited menu, fresh food, fast service and affordable price. Intense competition and demands for a wider menu drive-through and sit-down meals – encouraged the fast food giant to customize product variety without hampering the efficacy of its supply chain. McDonalds use assembly line procedures in their kitchen for mass production so as to keep prices low. Speed, service and cleanliness is one of the critical success factors of the business. Lining up in one of the several lines tied into McDonald’s capability statement on speedy service, efficiency and good customer service.
Each staff at McDonald is trained to change roles within shifts and this makes resource management during peak and off peak hours manageable. At all times there is enough staff on hand to take care of business and overall effectiveness is improved Drawback to this approach includes huge rental space to accommodate large operational facility. It could also become very costly on staff training. Workforce productivity are not usually related to the number of staff working on a task, and productivity variance may tilt negatively for McDonalds on this. Operating cost are very high and unless this is well managed, it may not necessarily be profitable. Rational for Wendy’s approach
The rationale for Wendy’s “old fashioned” hamburgers could be traced to the history of unsuccessful attempts to outperform the competition which created the low profile structure. Wendy’s headquarters shifted to Dublin after a merger with Triac, Arby’s parent company and the very conservative style of European business. Structure of business is very simple and easier to manage; it does not envisage much growth and cater mainly for the bottom line. It will require less space and resources to manage. Also less inventory and therefore less operating cost, however this will also impact on profitability. Drawback to this approach includes disorganized premises during peak hours, unsatisfied customers due to longer wait times for service. Wendy at some point was also suspect for cleanliness and this approach would add more to the problem.
The two approaches shows different business and strategic objectives. McDonald approach depicts a growth oriented organisation that wants to create market dominance in the sector. Wendy concentrates on its core traditional product, so that those who appreciate the product will be kept in the customer chain. The McDonalds style will require acquisition of new business skills and technology while Wendy traditional styles will require less technology. Looking at the management styles, McDonalds is poised to remain the leader in the food chain industry with concentration on their supply chain system and product differentiation methods. McDonalds work with farmers to ensure that produce are sized right and grow to specification, while Wendy concentrates mostly on the beef. With these different styles, McDonalds will be my preference for growth and bottom line. Wendy cannot compare to Mac in the business because more and more happy customers are trooping to Mac for what they see as 21 century improvements.