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Before getting to the customers, the product usually goes a long way the supply chain, which includes various components. It affects the organizations profitability and is sensitive to multiple influence factors. McDonalds is one of the worlds most famous fast-food restaurant chains, which is a sign of careful supply work. Despite McDonalds long-running success, the company also faces supply challenges that demand new solutions.
The supply chain and possible irregularities affect the final product, its price, and the companys success. For example, McDonalds operating expenses have increased over the past year due to the rise in prices for meat and packaging materials ( McDonalds, 2022). Higher expenses mean an increase in the cost of the product and, accordingly, a growth in prices. The availability of raw materials impacts the ability to provide a product, and in cases of crisis, it is vital to be ahead of competitors. In 2017 the UK faced a shortage of iceberg lettuces, which the component of one of the best-selling products in McDonalds Big Mac (Jacobs, 2018). If competitors had more influence over lettuce producers than McDonalds, the company would not be able to supply one of its essential products and lose profits. Reliable relationships with suppliers, particularly the promise of long-term cooperation, helped the company solve the problem (Jacobs, 2018). Such a measure to retain manufacturers continues to support McDonalds success.
The companys supply is also greatly affected by the shortage of labor, which, among other things, violates logistics and creates a delay. For instance, McDonalds faced a lack of truck drivers, which led to the unavailability of milkshakes for buyers ( Never mind, 2021). External forces, like a pandemic or politics, also significantly impact the supply chain. Government support in the form of subsidies allows greater production. The ability to produce profitability in the form of competent investment in various chain parts also affects supply. For example, an initiative supported by McDonalds to plant trees at a chicken walking site has contributed to a better egg supply (Jacobs, 2018). Thus, the strategies applied by the company in the past will also be effective in the future to react to changes. McDonalds builds a strong relationship with its partners and adapts to transformations. The company identifies vulnerabilities and opportunities for improvement by analyzing the supply chain.
References
Jacobs, K. (2018). Efficient, bold and sustainable: McDonalds supply chain secrets. Chartered Institute of Procurement & Supply. Web.
McDonalds: Supply chain bottlenecks take a bite out of restaurant groups profits. (2022). Sky News. Web.
Never mind McDonalds, supply chain issues are getting worse. (2021). SME. Web.
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