AMITY UNIVERSITY

Project Report
On

AN ANALYTICAL STUDY OF SUPPLY CHAINS

MANAGEMENT:-
(A CASE STUDY OF MCDONALD’S INDIA PVT. LTD.)

MANAGEMENT PROGRAMME – Amity University

[In partial fulfillment of MBA PROJECT WORK]

Submitted to
The Co-ordinator (Projects)

Amity University

Submitted by,

STUDENT NAME: Ashima Singh

Enroll. No. : A19201160301

Project Guide: Mr. Vikram Bakshi

Submitted in partial fulfillment of the requirements for qualifying

Master of Business Administration (OPERATION)
 CERTIFICATE OF ORIGINALITY

This is to certify that the project titled AN ANALYTICAL STUDY OF SUPPLY CHAINS
MANAGEMENT:- (A CASE STUDY OF MCDONALD’S INDIA PVT. LTD. is an
original work of the Student and is being submitted Ashima Singh in partial fulfillment for the
award of the “MASTER OF BUSINESS ADMINISTRATION (OPERATION)” degree of
Amity University. This report has not been submitted earlier either to this University or to any
other University/Institution for the fulfillment of the requirement of a course of study.

Vikarm Ashima

SIGNATURE OF SUPERVISOR SIGNATURE OF STUDENT

Place: Gurgaon Place: Gurgaon

Date : : 11 / 09 /2017 Date: 11 / 09 /2017

2
 ACKNOWLEDGEMENT

I express my deep sense of gratitude and indebtedness to Vikram Bakshi for his

valuable guidance, consistent encouragements untiring and continuous

supervision and support at every stage of project.

My sincere thanks to my all teachers for their valuable guidance in successful

completion of my project work. Last but not the least I express my thanks to all

those who directly or indirectly helped us and encouraged us in carrying of this

work.

STUDENT NAME: Ashima Singh

Enroll. No. : A19201160301

3
 DECLARATION
I hereby declare that this project work titled AN ANALYTICAL STUDY OF SUPPLY
CHAINS MANAGEMENT:- (A CASE STUDY OF MCDONALD’S INDIA PVT. LTD.
is my original work and no part of it has been submitted for any other degree purpose or
published in any other from till date.

Ashima Singh
Enroll. No. : A19201160301

4
 TABLE OF CONTENTS

CHAPTER NO. CONTENTS PAGE NO.

Acknowledgement 3

Declaration 4

Title of the project 6

1.0 Introduction to the Study 7

2.0 Company Profile 35

3.0 Review of Literature 40

4.0 Objective of the Study 51

5.0 Research Methodology 52

6.0 Data Analysis and Interpretation 55

7.0 Finding and Observation 66

8.0 Conclusion and Recommendation 68

9.0 Reference 71

10.0 Questionnaire 74

5
AN ANALYTICAL STUDY OF SUPPLY CHAINS
MANAGEMENT:-
(A CASE STUDY OF MCDONALD’S INDIA PVT. LTD.)

6
 CHAPTER – 1

INTRODUCTION TO THE STUDY

Supply chain management (SCM) is the management of a network of interconnected

businesses involved in the ultimate provision of product and service packages

required by end customers (Harland, 1996).[1] Supply chain management spans all

movement and storage of raw materials, work-in-process inventory, and finished

goods from point of origin to point of consumption (supply chain).Another definition

is provided by the APICS Dictionary when it defines SCM as the "design, planning,

execution, control, and monitoring of supply chain activities with the objective of

creating net value, building a competitive infrastructure, leveraging worldwide

logistics, synchronizing supply with demand and measuring performance globally."

In the current competitive scenario supply chain management assumes a significant

importance and calls for serious research attention, as companies are challenged with

finding ways to meet ever-rising customer expectations at a manageable cost. To do

so, businesses must search out which parts of their supply-chain process are not

competitive, understand which customer needs are not being met, establish

improvement goals, and rapidly implement necessary improvements. Previously

manufacturers were the drivers of the supply chain - managing the pace at which

products were manufactured and distributed. Today, customers are calling the shots,

and manufacturers are scrambling to meet customer demands for options/styles/

features, quick order fulfillment, and fast delivery. Manufacturing quality – a long-

time competitive differentiator - is approaching parity across the board, so meeting

customer’s specific demands for product delivery has emerged as the next critical

7
opportunity for competitive advantage. Companies that learn how to improve

management of their supply chain will become the new success stories in the global

market place. Study on Benchmarking shows significant cost differences between

organizations that exhibit best-in-class performance and Traditionally, Supply Chain

Management (SCM) has been amelting pot of various aspects, with influences from

logistics and transportation, operations management and materials and distribution

management, marketing, as well as purchasing and information technology (IT).

Ideally, the allencompassing philosophy of SCM embraces each of these functions to

produce an overall supply chain strategy that ultimately enhances firm performance

(Croom et al. 2000; Wisner and Tan 2000). In actuality, the literature is still very

fragmented and although several studies purport to discuss supply chain issues, most

of the existing research only examines one link of the chain, or most importantly only

focuses on one ingredient in the supply chain performance mix. Six major movements

can be observed in the evolution of supply chain management studies.

Inventory inaccuracy is a main issue in businesses dealing with physical assets. The

aim of this research is to examine the relationship between inventory inaccuracy and

performance in a manufacturing supply chain. We simulate a three echelon supply

chain with one product in which end-customer demand is exchanged between the

echelons. In the base model, without alignment of physical inventory and information

system inventory, inventory information becomes inaccurate due to low process

quality, theft, and items becoming unsaleable. In a modified model, these factors that

cause inventory inaccuracy are still present, but physical inventory and information

system inventory are aligned at the end of each period. The results indicate that an

elimination of inventory inaccuracy can reduce supply chain costs as well as the out-

of-stock level. Auto-ID technologies can be one means to achieve inventory accuracy.

8
Inventory control plays an important role in supply chain management. Properly

controlled inventory can satisfy customers' demands, smooth the production plans,

and reduce the operation costs; yet failing to budget the inventory expenses may lead

to serious consequences. The bullwhip effect, observed in many supply chain

management cases, causes excessive inventory due to information distortion, i.e. the

order amount is exaggerated while a minor demand variation occurs, and the

information amplified dramatically as the supply chain moves to the upstream. In this

paper, one of the main causes of bullwhip effect, order batching, is considered. A

simplified two-echelon supply chain system, with one supplier and one retailer that

can choose different replenishment policies, is used as a demonstration. Two types of

inventory replenishment methods are considered: the traditional methods (the event-

triggered and the time-triggered ordering policies), and the statistical process control

(SPC) based replenishment method. The results show that the latter out-performs the

traditional method in the categories of inventory variation, and in the number of

backlog when the fill-rate of the prior model is set to be 99%. This research provides

a different approach to inventory cost-down other than the common methods like:

information sharing, order batch cutting, and lead time reduction. By choosing a

suitable replenishment policy, the number of backorder and the cost of inventory can

be reduced.

The definition one America professional association put forward is that Supply Chain

Management encompasses the planning and management of all activities involved in

sourcing, procurement, conversion, and logistics management activities.

Importantly, it also includes coordination and collaboration with channel partners,

which can be suppliers, intermediaries, third-party service providers, and customers.

9
In essence, Supply Chain Management integrates supply and demand management

within and across companies.

Suppliers Manufacture Distributors Customers

Figure-1 Generic Supply Chain Module

Key Components of Supply Chain Strategy-

Strategy supply chain can be considered as comprising the following key components.

1. Sourcing strategy

2. Distribution strategy

3. Inventory strategy

4. Customer service strategy

5. Integration strategy

10
 Distribution Sourcing Strategy Inventory
Strategy Strategy

Strategic supply chain

Management

Customer Services
Strategy Integration
Strategy

Figure-2 Strategic Supply Chain Module

Sourcing Strategy-

Not many organizations go for in-house manufacturing .They rely on sourcing and

developing vendors with elaborate systems to check and control quality. Even firms

which decide on in- house manufacturing often do not go for manufacturing full range

of products to meet total market demand but decide on partial sourcing. Make-and-

buy decisions make a significant impact on the cost structure of a company’s

products.

11
 Make of Buy

Sourcing
Strategy

Manufacturing Capacity
Management Management

Figure- 3 Elements of Sourcing Strategy

Manufacturing Management –

This functional area decides such issues as to how production should be organized

and managed. Traditionally the production planning and control systems have been

designed to maximize efficiency of labor and utilization of machines. These

considerations are no longer adequate. In a customer focused business world,

production processes have to optimize balance between satisfaction and efficiency.

More-or-Buy Decisions-

Traditional approaches on make-or-buy decision have considered such factors as cost

of in-house manufacturing. Cost of sourced supplies. Labor cost changes (for resons

of buy decision, sometimes in-house labour become idle), recovery of overheads,

underutilized capacity in plant and machinery, transport interruptions,etc. It now also

calls for considerations of faster deliveries, easy access for service, repairs and

replacements, and customer preferences.

12
Capacity Management-

This calls for decision to locate plants for in-house processing and suppliers and to fix

capacities for both plants and suppliers. Traditionally, the decision on location of

plants were taken based on consideration such as cost of land, government subsidies.

Cost of power, availability of labour and other manpower, government concessions on

sales tax and other statutory levies, industrial relations, etc. Many of these

considerations are equally valid today. But more important considerations have

emerged. Proximity to customers, costs of distribution, supply channel infrastructure

availability, access to service facilities, and access to various modes of transport

network, access to IT are the new emerging considerations.

Distribution Strategy-

Evans and Danks (2008) define it as the ‘linkage between the firm’s customers and

the sources of its products or services that the firm provides to the marks place.

Strategy decision is not only important as it involves consideration of distribution cost

which form a significant percentage of total marketing costs. But it also calls for a

long-term commitment to certain type of costs associated with a channel of

distribution. The distribution strategy has three elements.

Distribution Strategy

Supply Chain
Channel Selection Configuration Distribution Planning

Figure -4Factors of Distribution Strategy

13
Channel Selection –

A wide choice of Channels is available. These include dealers, manufacturers,

stockists, wholesalers, distribution, and currently, World Wide Web, etc. Choice of an

appropriate channel depends on the products or services to be marketed, the volume

involved, the geographical locations to be covered and the long term business policy

of the firm in carrying out marketing functions and exercising controls. Choice of a

channel is important as it can directly influence the level of customer service.

Supply Chain Configuration-

A supply chain has a number of participants. Sources of supplies, storage or stocking

stations, and distribution channels till he supplies reach to end-customer constitute

some of the major participants. Decision on alternatives such as number of

participants and their locations have an important bearing on the efficacy of the

organization. Supply chain configuration all for determining numbers and location of

each of the participants.

It calls for specifying the role of each of the participants. The answers to these

questions will take into customers and their geographic locations, cost of

transportation, distribution so that supplies reach the destinations on time.

Distribution Planning-

The supplies can be carried through a wide variety of transportation choices. A faster

transportation not only helps to achieve a higher level of customer satisfaction in

making the supplies available on time but also helps to increase the sales by seizing

business opportunities, when there is a sudden rise in demand. To meet these

14
objectives many corporations tend own their own fleet of transport and major factor in

a supply chain system. This factor, therefore, seeks to establish the transport mode

capacity, location, routing and the schedules of distribution so the supplies reach the

destinations on time.

Inventory Strategy-

This constitutes the core of SCM. The major costs of a supply chain, the level of

customer satisfaction, the business growth (or fall) are largely influenced by the

inventory strategy. There are several issues which are at conflict with each other and

are required to be resolved. Higher inventory at several distribution points may, for

example, helps in making the goods easily available to customers and result in growth

of sales but this will simultaneously increase costs and bring down revenues

.Inventory strategy can be considered as comprising three elements.

Demand Forecasting-

This calls for determination of the demand of the products for the period considered.

Many products in the market have s seasonal demand which is governed by factors

such as festivals, weather (seasons), etc. Many other follow regular cycle. There are

products which find market. When there is scarcity of alternatives. Demand planning

is needed as it enables the company to organize its sourcing and stocking policies.

The economics of a total system can go haywire if demand planning finally finds no

resemblance to the actual market conditions. On the other hand an accurate demand

forecast will result in totally smooth operations. A number of forecasting tools are

available to carry out demand planning in a systematic manner.

15
Demand Forecasting

Inventory
Strategy

Stock Facilities Inventory

Planning Planning

Figure -5Inventory Strategy

Inventory Planning-

Once the demand has been forecast, the organization is called upon to determine

levels of production to develop an inventory policy. The latter includes fixing of

levels of inventory such as minimum stock, maximum levels of stocks, reorder levels,

lead time for procurement order level quantities, etc. Inventory planning also includes

setting up of procedures and fixing time schedules for monitoring the inventories and

exercising controls. Inventory planning is required to be carried at all the channels

(stock points) of the supply chain system. In a supply chain system costs of inventory

constitute a major overhead. Customer satisfaction on the other hand exacts delivery

of goods from ready stock.

16
Planning of Stocking Facilities-

Adequate stocking facilities are needed for keeping stocks at each of the channel

stock stations. The storing facilities should be sufficient to carry the inventory in safe

conditions and should be equipped with handling facilities for easy and quick receipts

and issues. Besides, the storage facilities should be situated close to the rail/road

heads so as to minimize the costs of transportation. Proximity to distribution channels

is also desirable as it will reduce the time to carry stock to the sale counters.

ERP
Orders, Items, Routing….

Scheduler

Manufacturing Orders,
Dispatch Lists….
Completions, Materials, Used, Lots, Hours…

Execution

Figure-6 Supply Chain Scheduling and Execution Model

17
18
 Legacy System

ERP

Inventory,
Materials Bills,
Figure-7 ERP- Backbone For Supply Chain Model

plan, Forecast.
Production Customer
Plan Order

Planner

Constrained
Plan
Latest
Build Schedule

Scheduler

Detailed
Resource
State of Dispatch List
Execution on
the Shop Floor

Execution

SUPPLY CHAIN MANAGEMENTS

19
 As a result of the importance of supply chain management, as discussed,

companies should develop a supply chain strategy. More importantly, the supply

chain strategy must be integrated with the overall business strategy. A challenge to

formulating successful supply chain strategies is the fact that the supply chain

management is a collaborative effort among companies in the entire supply chain.

However, functional integration is necessary first within the organization before

integration can be extended to the entire supply chain. Figure 2 illustrates this

integration and its possible impacts on company and supply chain performance.

External Internal
Environment Environment
Opportunities and Threats

Strengths
and
Corporate-Level Weaknesses
Strategies

Suppliers Business-Level Distributors and

Strategies Customers

Functional-Level
Strategies

Operations Marketing Research and Information

Development Systems

Finance Human
Resources

Supply Chain Management

Figure 8 – Supply Chain Management and Strategic Planning

Material Movement

20
 1. Inward Movement 2. Outward Movement

Inward Movement

From Vendor From CDC Consignment Return from

Stock MDC

Outward Movement

To Stores To Warehouses To Vendor

To Home
Deliveries

Figure 9 -Material Movement Model

21
 Coordination Flow

FE SCM

FEC WAREHOUSE

Figure -10 Coordination Flow

 FE SCM / FEC coordinate with the teams till the complete execution of order.

 FEC is responsible for coordination with vendor for material procurement; a

special care must be taken in case of urgent deliveries.

 Warehouse for deliveries form WH.

 All departments must be coordinated with written mail as well as orally

(phone).

 Each one of the above should have full information about each and every

consignment.

 The team leader of each team on field should communicate the progress of

each order phase wise to the concerned / reporting authority.

 At the time of booking order FEC must be consulted for stock availability and

further for promising time of order execution. The lead time must not exceed 3

to 4 days.

22
  As soon as the order is booked, either on the same day or on the next day

teams must be assigned and sent for inspection of site and further planning

work execution.

 Team leader is then responsible to discuss the plan of execution with FEC,

FESCM at store.

 The material must be arranged on pre delivery point one day before.
 Team leader must inform FEC, FESCM for further requirement at site hence
the periodical deliveries could be arranged.

Definition

There seems to be a universal agreement on what a supply chain is. Jayashankar et al.

defines a supply chain to be a network of autonomous or semi-autonomous business

entities collectively responsible for procurement, manufacturing, and distribution

activities associated with one or more families of related products.

Lee and Billington has a similar definition:

A supply chain is a network of facilities that procure raw materials, transform them

into intermediate goods and then final products, and deliver the products to

customers through a distribution system.

And Ganeshan and Harrison has yet another analogous definition:

A supply chain is a network of facilities and distribution options that performs the

functions of procurement of materials, transformation of these materials into

intermediate and finished products, and the distribution of these finished products

to customers.

23
Figure: An Example of a Supply Chain.

Figure shows an example of a supply chain. Materials flow downstream, from raw

material sources through a manufacturing level transforming the raw materials to

intermediate products (also referred to as components or parts). These are assembled

on the next level to form products. The products are shipped to distribution centers

and from there on to manufacturers and customers.

Issues in Supply Chain Management

The classic objective of logistics is to be able to have the right products in the right

quantities (at the right place) at the right moment at minimal cost. Figure translates

this overall objective into four main areas of concern within supply chain

management.

24
Figure: Hierarchy of Objectives.

The two middle boxes in the lower row of Figure delivery reliability, and delivery

times, are both aspects of customer service, which is highly dependent on the first

box, flexibility, and on the last box, inventory.

Decisions on Three Levels

Supply chain management decisions are often said to belong to one of three levels; the

strategic, the tactical, or the operational level. Since there is no well defined and

unified use of these terms, this Section describes the how they are used in this thesis.

figure shows the three level of decisions as a pyramid shaped hierarchy. The decisions

on a higher level in the pyramid will set the conditions under which lower level

decisions are made.

Figure: Hierarchy of Supply Chain Decisions.

25
On the strategic level long term decisions are made. According to Ganeshan and

Harrison], these are related to location, production, inventory, and transportation.

Location decisions are concerned with the size, number, and geographic location of

the supply chain entities, such as plants, inventories, or distribution centers. The

production decisions are meant to determine which products to produce, where to

produce them, which suppliers to use, from which plants to supply distribution

centers, and so on. Inventory decisions are concerned with the way of managing

inventories throughout the supply chain. Transport decisions are made on the modes

of transport to use.

Decisions made on the strategic level are of course interrelated. For example

decisions on mode of transport are influenced by decisions on geographical placement

of plants and warehouses, and inventory policies are influenced by choice of suppliers

and production locations. Modeling and simulation is frequently used for analyzing

these interrelations, and the impact of making strategic level changes in the supply

chain.

On the tactical level medium term decisions are made, such as weekly demand

forecasts, distribution and transportation plan, production planning, and materials

requirement planning. The operational level of supply chain management is

concerned with the very short term decisions made from day to day. The border

between the tactical and operational levels is vague. Often no distinction is made, as

will be the case in this thesis.

26
If your system is not performing up to this potential, be sure you have implemented

each of the following characteristics of good inventory management:

1. Protect your company against theft – Make sure that the only people in your

warehouse belong in your warehouse. Pilferage is a larger problem than most

distributors realize.

2. Establish an approved stock list for each warehouse – Most dead inventory

is "D.O.A" (dead on arrival). Order only the amount of non-stock or special

order items that your customer has committed to buy. Before adding an item to

inventory, try to get a purchase commitment from your customer. If this is not

possible, inform the salesperson who requests the item that he or she is

personally responsible for half the carrying cost of any part of the initial

shipment that isn’t sold within nine months.

3. Assign and use bin locations – Assign primary and surplus bin locations for

every stocked item. All picking and receiving documents should list the

27
 primary bin location (in either characters or a bar code). With correct bin

locations on documents, order picking is probably the least complicated job in

your warehouse. Assign inexperienced people to this task and your most

experienced warehouse workers to receiving inventory and stock management.

4. Record all material leaving your warehouse – There should be appropriate

paperwork for every type of stock withdrawal. Under no circumstances should

material leave the warehouse without being entered in the computer. Eliminate

"no charge/no paperwork" material swaps. Product samples should be charged

to a salesperson’s account until they are either returned to stock or charged to

the customer.

5. Process paperwork in a timely manner – All printed picking documents

should be filled by the end of the day. Stock receipts should be put away and

entered in the computer system within 24 hours of arrival.

6. Set appropriate objectives for your buyers – Buyers should be judged and

rewarded based on the customer service level, inventory turns, and return on

investment for the product lines for which they are responsible.

7. Make sure every employee is aware of the cost of bad inventory

management – Inventory loss through theft, breakage, or loss must be paid

for with net profit dollars. If your net profit before taxes is 4%, it takes $2,500

in new sales to make up for a $100 merchandise loss!

8. Ensure that stock balances are accurate and will remain accurate –

Implement a comprehensive cycle counting program. A good cycle counting

program can replace your traditional year-end physical inventory.

9. Determine the most advantageous replenishment path for each item in

each warehouse – Assign one of these "paths" to each item in each

warehouse:

28
 a. Distributive purchasing – The warehouse replenishes stock with a

purchase order issued directly to the vendor

b. Central Warehousing – The stock of one warehouse is replenished with

a stock transfer from a central warehouse

c. Cooperative Purchasing – Several branches "pool" their needs and

issue one vendor purchase order in order to meet the vendor minimum

order within a reasonable amount of time

10. Specify guidelines for setting the reorder method another purchasing

parameters to maximize inventory turns and minimize stockouts:

a. Minimum/Maximum quantities

b. Economic order quantities

c. Order up to a specific stock level

d. Safety stock quantities

e. Preseason buys

29
ABOUT LOGISTICS
Logistics is the art and science of managing and controlling the flow of goods, energy,

information and other resources like products, services, and people, from the source

of production to the marketplace. It is difficult to accomplish any marketing or

manufacturing without logistical support. It involves the integration of information,

transportation, inventory, warehousing, material handling, and packaging. The

operating responsibility of logistics is the geographical repositioning of raw materials,

work in process, and finished inventories where required at the lowest cost possible.

Logistics and Supply Chain services are provided by a wide range of 3rd party

suppliers

Components of Logistical System-

Five components combine to form a logistical system. These are:

1. Facility structure,
2. Transportation,
3. Inventory,
4. Communication and IT, and
5. Warehousing and Packaging

SWOT Analysis for Micro-Level Components-

Facility Structure-

Strengths Weakness Opportunities Threats

Vast geographical Inadequate facilities Need to develop a Clustering of facilities
area for design of total system network
distribution network
Land cost generally Facilities location Optimal location of Congestion pollution
not high decisions are not facilities
professionally taken

30
Inventory Control-
Strengths Weakness Opportunities Threats
Indigenous supply of Excessive lead time Lead time Shortages
material possible of Reduction
most case
Materials cost a Uncertain Vendors Source development Black-marketing
major factor

Knowledge base Excess variety Vendor rating

exists
Too much dead stock
Low inventory
turnover ratio
Demand
uncertainties Record
keeping poor quality
– assurance problems
inflationary
pressures.

Warehousing and Packaging-

Strengths Weakness Opportunities Threats

Technology base Package poor Value analysis in Hazards
packaging
mechanization
Manufacturing base Excessive packaging Automation Pilferage
Cost
Manpower base Insufficient storage Store layout Budget constraint for
with excessive planning AS/RS
retrieval time
Lot of challenge for Poor house keeping, Improved work Maintenance of
improvement low technology environment mechanized system
Damage during
Storage

31
WAREHOUSING

Warehouse is the location to or from which the inventory is transported. Warehouses

are the key driver of supply chain performance in terms of responsiveness and

efficiency. Before deciding the location of Warehouses we must consider the

following points:

 Location of our stores

 Rent of the location

 Format of our retailing

Now a day’s warehouse is treated as switching facilities rather than storage place and

companies to move stock from the warehouse as soon as possible to reduce the

inventory handling cost, for higher inventory turnover and for shorter cycle time. It is

a major cost center, many customer problem are the direct result of improper

warehousing management.

INVENTORY MANAGEMENT

Inventory management is primarily about specifying the size and placement of

stocked goods. Inventory management is required at different locations within a

facility or within multiple locations of a supply network to protect the regular and

planned course of production against the random disturbance of running out of

materials or goods. The scope of inventory management also concerns the fine lines

between replenishment lead time, carrying costs of inventory, asset management,

inventory forecasting, inventory valuation, inventory visibility, future inventory price

forecasting, physical inventory, available physical space for inventory, quality

management, replenishment, returns and defective goods and demand forecasting.

Balancing these competing requirements leads to optimal inventory levels, which is

an on-going process as the business needs shift and react to the wider environment.

32
Inventory management involves a retailer seeking to acquire and maintain a proper

merchandise assortment while ordering, shipping, handling, and related costs are kept

in check. Systems and processes that identify inventory requirements, set targets,

provide replenishment techniques and report actual and projected inventory status.

Handles all functions related to the tracking and management of material. This would

include the monitoring of material moved into and out of stockroom locations and the

reconciling of the inventory balances. Also may include ABC analysis, lot tracking,

cycle counting support etc. Management of the inventories, with the primary objective

of determining/controlling stock levels within the physical distribution function to

balance the need for product availability against the need for minimizing stock

holding and handling costs. Operations management focuses on carefully managing

the processes to produce and distribute products and services. Major, overall activities

often include product creation, development, production and distribution. (These

activities are also associated with Product and Service Management.) Related

activities include managing purchases, inventory control, quality control, storage,

logistics and evaluations of processes. A great deal of focus is on efficiency and

effectiveness of processes. Therefore, operations management often includes

substantial measurement and analysis of internal processes. Ultimately, the nature of

how operations management is carried out in an organization depends very much on

the nature of the products or services in the organization, for example, on retail,

manufacturing or wholesale.

Companies spend millions wringing every bit of inefficiency from supply chains. But,

there is a hidden trove of efficiency and value that leading companies are just

beginning to consider. Supply chain migration from lean and functional to agile and

customised. Improving supply-chain management to gain a competitive edge. A

33
misaligned supply chain can lead to higher costs, lower quality and poor customer

service. An Investigative Study in Small and Medium Enterprises. It appears that the

notions on supply chain management may only be indirectly associated with the

issues surrounding consumer behaviors toward maintaining and/or otherwise pushing

customer satisfaction. The forces of globalisation and ever flattening world are

exerting renewed pressure on global supply chains. It is time that organisations

counter supply chain disruptions by building solid 'sense and respond' capabilities.

Four cardinal principles for maximizing payback from supply chain technology

investments. This paper examines the impact of e-business on supply chain

integration on four critical impact of e-business on supply chain integration on four

critical dimensions.

The complexities of getting material ordered, manufactured and delivered overload

most supply chain management (SCM) systems. Eradicating the "high-inventory-

poor-service-level" problem. Unlocking Value from E-Supply Management. Despite

the "e," e-supply management is about much more than technology. Five steps can

help businesses make the most of their efforts. A few farsighted finance executives

are managing their supply chain as a virtual corporation, finding innovative ways to

reduce costs and increase earnings. Flow Manufacturing is Essential to Competitive

Supply Chain Management. Many companies are not aware of how their supply

chains are performing or even what supply chain they're in. Specific assessment

criteria based on the Six Levels of Supply Chain Excellence and a strategic

assessment methodology can help them determine how their supply chain is

performing and thus plot a course for improvement. Major shifts in global business

conditions are radically altering input costs and risk. In response, companies must

realign their supply chains, including: rethinking product formulation and packaging,

34
restructuring the supply chain network and footprint, and realigning the role of

suppliers and third parties. Now that Supply Chain Management has entered the

consciousness of manufacturing managers, we are experiencing the inevitable rush to

apply a software solution to implementation of a fully integrated chain of activities

from the top to the bottom of the materials flow. But supply chain management is

much more than software

35
[

CHAPTER – 2

COMPANY PROFILE

COMPANY OVERVIEW:

McDonald's™ is the leading global food service retailer with more than 32,000 local
restaurants serving more than 58 million people in around 130 countries each day. 70
percent of our restaurants worldwide are owned and operated by independent, local
businessmen and businesswomen.

In India, the brand is managed by two business entities...

 Connaught Plaza Restaurants Private Limited, led by Mr. Vikram Bakshi, JV
Partner and Managing Director, North & East India
 Hardcastle Restaurants Private Limited, led by Ms. Smita Jatia, Managing
Director, South & West India

McDonald's™ philosophy of QSCV (Quality, Service, Cleanliness and Value) is the

guiding force behind its service to the customers in India. Following its philosophy of
being sensitive to local food and cultural preferences, India was the first country in
the McDonald's™ system where it served non-beef and non-pork products. More than
70 percent of the menu in India has been locally developed with complete segregation
of vegetarian and non-vegetarian products right from the food processing plants to the
point of serving the customers.

McDonald's™ commitment to its Indian customers is evident even in development of

special sauces that use local spices and chillies. The mayonnaise and all other sauces
are egg-less. McDonald's™ also pioneered the establishment of Cold Chain across
India which helps maintain freshness and nutrition in every product.
McDonald's™ regular scrumptious menu includes wide range of products like
McAloo Tikki™, Filet-O-Fish™, Spicy Range, Chicken McGrill™, McVeggie™,
Veg Pizz a McPuff™, Chicken Mcnuggets®, Fries, Wraps, an assortment of Sundaes,
Soft Serve and refreshing beverages such as Ice Tea & Cold Coffee with outstanding

36
service in a vibrant and lively ambience, for which McDonald's™ is known
worldwide.

McDonald's™ had further reinforced the branded affordability mantra via the
introduction of the Happy Price Menu which starts at Rs 25 only.

Keeping pace with the customer evolving needs McDonald's™ also functions on
models that drive convenience and create unique differentiation like McDelivery,
Drive thru, Breakfast Menu, high ways and extended hours. (Currently, available in
select cities).

At present, there are 300 McDonald's™ restaurants in India. McDonald's India Pvt.
Ltd. operates as a chain of restaurants. The company’s products include burgers,
pizza, sandwich sauces, vegetable and non vegetable items, fries, potato wedges,
beverages, and frozen desserts. It also provides real estate and property services. It
operates restaurants in Mumbai, Pune, Ahmedabad, Bangalore, Indore, Baroda, Surat,
Nasik, and Hyderabad, India. The company was incorporated in 1993 and is based in
Mumbai, India. McDonald's India Pvt. Ltd. operates as a subsidiary of McDonald's
Corp.

Our Ambition
Our purpose goes beyond what we sell. We’re using our
reach to be a positive force. For our customers. Our
people. Our communities. Our world.

GOOD FOOD
We promote choices. Real ingredients. Great taste. Transparency.

GOOD PEOPLE
We create opportunity. Encourage diversity. Offer training. Facilitate teamwork.
Reward achievement.

GOOD NEIGHBOR

37
We champion happy, healthy kids. Keep families together through Ronald McDonald
House Charities. Commit to reducing our footprint. Using less energy. And recycling
more.

We’re proud of everything we do. And we’re dedicated

to doing more. Evolving alongside our customers.
Building memories that last a lifetime. And goodwill
that lasts forever.

Our Business Model

The power of our franchisees, suppliers and employees working together toward a
common goal is what makes McDonald’s the world’s leading quick-service restaurant
brand.
 Franchisees bring the spirit of entrepreneurship and commitment to
communities.
 Suppliers are dedicated to highest levels of quality and safety.
 The company facilitates learning and sharing across McDonald’s more than
36,000 restaurants.

A COLLECTION OF SMALL BUSINESSES

While a global Brand, the vast majority of McDonald’s restaurants – more than 80%
worldwide and nearly 90% in the U.S. – are owned and operated by approximately
5,000 independent, small- and mid-sized businessmen and women. Franchisees often
live in the communities they serve and are committed to making a positive impact
locally – from providing good food, customer service and job opportunities, to
supporting local charities and other ways of giving back.

FREEDOM WITHIN A FRAMEWORK

We pay special attention to how our customers are alike – and how they are different
too. For that reason, markets and countries have latitude when it comes to menu,
marketing, community involvement and local business management

38
 CHAPTER – 3

REVIEW OF LITERATURE

The following paper The literature for review to be collected from secondary sources

such as magazines, articles, reports, budgets, news paper etc to highlight the problems

and findings of the study done by many research and business professionals to

understand the significance of the materials management of the companies. The

objectives of the proposed topic have to be formulated based on the previous study by

the many research professionals. Approximately ten to fifteen reviews has to be

collected and presented in my project report.

SCM has been interpreted by various researchers. Based on the relatively recent

development of the supply chain literature, it is not surprising that there has been

much debate as to a specific SCM definition. Ganeshan and Harrison (1995) has

defined SCM as a network of facilities and distribution options that performs the

functions of procurement of materials, transformation of these materials into

intermediate and finished products, and the distribution of these finished products to

customers. Lee & Corey (1995) stated that SCM consists of the integration activities

taking place among a network of facilities that procure raw material, transform them

into intermediate goods and then final products, & deliver products to customers

through a distribution system. Christopher (1998) defined the supply chain as the

network of organizations that are involved, through upstream and downstream

linkages, in the different processes and activities that produce value in the form of

products and services in the hands of the ultimate customer. SCM is the " strategic

and systematic coordination of the traditional business functions and the tactics across

39
these business functions within a particular firm and across businesses within a supply

chain, for the purposes of improving the long-term performance of the individual

companies and the supply chain as a whole"

Carter and Ellram (2003) surveyed the articles published in the Journal of Supply

Chain Management for the total period of 35 years since its launching i.e. for 1965 to

1999. Their objective was to offer a greater understanding of the evolution of

purchasing and supply research over the first 35 years of the Journal of Supply

Chain’s existence, and to provide guidance and prescriptions for future supply

management research. They observed that nearly 90% of the journal articles under

study consisted of normative literature, methodology reviews, and exploratory studies.

They further noted that the use of hypothesis testing had increased significantly over

the past 10 years of their review (1989-1999), yet they consider that a greater use of

hypothesis testing and the scientific method is recommended as the Supply

Management discipline continued to mature. Carter & Ellram (2003) further

recommended more literature reviews leading to the introduction of theoretical

frameworks of supply management, and the use of more sophisticated research

modeling techniques such as MANOVA/ discriminant analysis and inferential

statistical techniques.

They classified the articles based on a modification of the categories used by ISM,

and proposed 32 categories for clear and unambiguous classification, which has

proved to be a milestone and has been used in subsequent literature reviews by several

researchers. The authors conclude that purchasing and supply management, as a

scientific discipline, is maturing. It is interesting to note that the authors have

consistently used the terms ‘purchasing’ and ‘supply’ management, which speaks a lot

40
about the stage of development of the discipline of ‘Supply Chain Management’ till

1999.

show how sharing demand and inventory data can improve the supplier’s order

quantity decisions in models with known and stationary retailer demand: Bourland et

al. (2006), Chen (2008), Campbell Soup Company gave us ordering data from several

manufacturers before and after the implementation of information technology.

In the “before” data we saw that manufacturers often purchased in multiple pallet

quantities because, according to our contacts at Campbell Soup Company, they did

not want to bother with the hassle of placing orders frequently. In the “after” data it is

clear tha each products’ minimum batch size was no greater than one pallet, and in

some cases Campbell Soup Company was willing to deliver in half-pallet increments.

In addition, the lead time for deliveries to the manufacturers was reduced from about

one week to two to three days, primarily resulting from the reduction in the order

processing time.

Gavirneni et al. (2009), and Aviv and Federgruen (2008). Lee et al. (2000) use

shared information to improve the supplier’s order quantity decisions in a serial

system with a known autoregressive demand process. Liljenberg (2006) studies how

to use shared information to improve the supplier’s allocation of inventory among the

manufacturers. In our model shared information is exploited for both uses: better

supplier replenishments and better allocations to the manufacturers.

We focus on sharing demand and inventory data,but there are other data that can be

shared in a supply chain. Gavirneni et al. (2009) measure the benefit of sharing the

parameters of the retailer’s ordering policy with the supplier. Aviv (2008) explores

41
the benefits of sharing forecasts for future demand.In our model, as in the other

studies mentioned, it is assumed that information is always shared truthfully.Cachon

and Lariviere (2007) study forecast sharing when the forecast provider has an

incentive to provide an overly optimistic forecast of demand.Both Lee et al. (2000)

and Gavirneni et al. (2009) assume there exists a perfectly reliable exogenous source

of inventory; information sharing has no impact on the retailer because its orders are

always received in full after a fixed number of periods. In the other papers, as in our

model, the supplier is the only source of inventory. Therefore, information sharing

may impact the manufacturers by changing the supplier’s order quantities or

allocations.Gavirneni et al. (2009) and Aviv and Federgruen(2008) allow for limited

supplier capacity, whereascapacity is unrestricted in our model and in the other

papers.

The reported benefits of information sharing vary considerably. Liljenberg (2006)

finds that better allocation lowers supply chain costs by 0% to 3.9%. Chen (2008)

finds that supply chain costs are lowered up to 9%, and on average by 1.8%. Aviv and

Federgruen (2008) report benefits of 0%–5%. In contrast, Lee et al.(2000) find that

information sharing lowered supply chain costs by about 23% in their scenario with

the highest demand non stationarity. However, Graves (2009) studies a similar model,

with the exception that there is no outside inventory source, and concludes that

information sharing provides no benefit to the supply chain. Gavirneni et al. (2009)

report that sharing the retailer’s demand data reduced the supplier’s cost by 1%–

35%.2 The impact on the supply chain’s cost would be lower because information

sharing in their model has no impact on the retailer’s costs.

There is other research related to our work. Lee et al(2007) find that sharing

information reduces the supplier’s demand variance, which should benefit the supply

42
chain, but they do not quantitatively measure this benefit. There are many studies that

investigate a supply chain model with one supplier, N manufacturers, stochastic

consumer demand, and batch ordering.Some of them assume traditional information.

Axsater 2003, Cachon 2005, Chen and Samroengraja 2006, Lee and Moinzadeh 1986,

Svoronos and Zipkin 1988), while others assume full information (e.g., Chen and

Zheng 2007, Graves 2006, McGavin et al. 2003).Because of different assumptions

and test problems, it is not possible to meaningfully compare supply chain costs

across those two sets of studies. Several researchers study allocation rules, but none

addresses the issue of information sharing (see Cachon 2005, Chen and Samroengraja

2006, and Graves 2006). Anand and Mendelson (2007) study a one-period model in

which manufacturers possess some local information that cannot be shared with either

a central agent or other manufacturers. In our full information model all relevant

information can be shared with the central agent (i.e., the supplier).Chen and Zheng

(1994) develop a lower bound over all feasible policies for a multiple retailer model.

They show that a full information policy is reasonably close to optimal, but they do

not compare this policy with a

John B. Houlihan said in 2003:-

In the world of the logistics manager ten years ago—another era altogether in terms of

business economics—the mission, while perhaps not always readily achieved, was at

least clear: balancing inventories between both production capacity and the demands

of customer service. While the manager might have understood intellectually that

assets should be employed to make the most of both factors, it was also accepted that

hidden costs were bound to creep into even the best-managed system—and that these

could be borne.

43
Gerard P. Cachon said in august 2000:-

In traditional supply chain inventory management, orders are the only information

firms exchange, but information technology now allows firms to share demand and

inventory data quickly and inexpensively. We study the value of sharing these data in

a model with one supplier, N identical manufacturers, and stationary stochastic

consumer demand. There are inventory holding costs and back-order penalty costs.

We compare a traditional information policy that does not use shared information

with a full information policy that does exploit shared information. In a numerical

study we find that supply chain costs are 2.2% lower on average with the full

information policy than with the traditional information policy, and the maximum

difference is 12.1%. We also develop a simulation-based lower bound over all

feasible policies. The cost difference between the traditional information policy and

the lower bound is an upper bound on the value of information sharing: In the same

study, that difference is 3.4% on average, and no more than 13.8%. We contrast the

value of information sharing with two other benefits of information technology, faster

and cheaper order processing, which lead to shorter lead times and smaller batch

sizes, respectively. In our sample, cutting lead times nearly in half reduces costs by

21% on average, and cutting batches in half reduces costs by 22% on average. For the

settings we study, we conclude that implementing information technology to

accelerate and smooth the physical flow of goods through a supply chain is

significantly more valuable than using information technology to expand the flow of

information.

Hau L. Lee said in 2007:-

Consider a series of companies in a supply chain, each of whom orders from its

immediate upstream member. In this setting, inbound orders from a downstream

44
member serve as a valuable informational input to upstream production and inventory

decisions. This paper claims that the information transferred in the form of "orders"

tends to be distorted and can misguide upstream members in their inventory and

production decisions. In particular, the variance of orders may be larger than that of

sales, and the distortion tends to increase as one moves upstream-a phenomenon

termed "bullwhip effect." This paper analyzes four sources of the bullwhip effect:

demand signal processing, rationing game, order batching, and price variations.

Actions that can be taken to mitigate the detrimental impact of this distortion are also

discussed.

Seungjin Whang said in 2000:

Advances in information system technology have had a huge impact on the evolution

of supply chain management. As a result of such technological advances, supply chain

partners can now work in tight coordination to optimise the chain-wide performance,

and the realised return may be shared among the partners. A basic enabler for tight

coordination is information sharing, which has been greatly facilitated by the

advances in information technology. This paper describes the types of information

shared inventory, sales, demand forecast, order status, and production schedule. We

discuss how and why this information is shared using industry examples and relating

them to academic research. We also discuss three alternative system models of

information sharing - the information transfer model, the third party model and the

information hub model.

Sita Bhaskaran said in 2007:

A supply chain is a series of manufacturing plants that transform raw material into

finished product. A pipeline within a supply chain refers to the stream of information,

45
material, components, and assemblies that are associated with a particular product. It

is typical for manufacturing plants to put considerable effort to optimize the

performance of a horizontal slice of a supply chain (such as coordination among parts

that share a common resource). The need to optimize the performance of the vertical

slice (the supply chain connecting raw material to finished product) by controlling the

transmission of schedule instability and the resulting inventory fluctuation is often

overlooked. A schedule is stable if actual production requirements for a given period

do not change from the forecast production requirements. Stable production schedules

are important when managing supply chains as they help control inventory fluctuation

and inventory accumulation. Failure to control schedule instability results in high

average inventory levels in the system.

In this paper a simulation analysis of supply chain instability and inventory is

conducted, and it is shown how supply chains can be analyzed for continuous

improvement opportunities using simulation. The focus is on a stamping pipeline in

an automobile supply chain based on operating data from General Motors (GM). It is

shown that the techniques used in this paper are a useful tool for supply chain

analysis.

Jayashankar M. Swaminathan, said in 2007:

A global economy and increase in customer expectations in terms of cost and services

have put a premium on effective supply chain reengineering. It is essential to perform

risk-benefit analysis of reengineering alternatives before making a final decision.

Simulation provides an effective pragmatic approach to detailed analysis and

evaluation of supply chain design and management alternatives. However, the utility

of this methodology is hampered by the time and effort required to develop models

46
with sufficient fidelity to the actual supply chain of interest. In this paper, we describe

a supply chain modeling framework designed to overcome this difficulty. Using our

approach, supply chain models are composed from software components that

represent types of supply chain agents (e.g., manufacturers, manufacturers,

transporters), their constituent control elements (e.g., inventory policy), and their

interaction protocols (e.g., message types). The underlying library of supply chain

modeling components has been derived from analysis of several different supply

chains. It provides a reusable base of domain-specific primitives that enables rapid

development of customized decision support tools.

Gordon Stewart said in 2005:

Describes a comprehensive set of fact-based performance measures that can be used

to describe accurately a world-class supply chain of plan, source, make and deliver

activities. Aims to help companies take a broad supply-chain-process perspective by

quantifying performance improvement opportunities across the entire supply chain.

Includes quantitative measures such as cash-to-cash cycle time and supply chain

response time, as well as qualitative analysis of best-in-class performance. Best

practice benchmarks provide more insight into how to achieve world-class

performance.

Benita M. Beamon said in 2009

The process of choosing appropriate supply chain performance measures is difficult

due to the complexity of these systems. The paper presents an overview and

47
evaluation of the performance measures used in supply chain models and also

presents a framework for the selection of performance measurement systems for

manufacturing supply chains. Three types of performance measures are identified as

necessary components in any supply chain performance measurement system, and

new flexibility measures for supply chains are developed.

Rhonda R. Lummus, Robert J. Vokurka, (1999):

Interest in supply chain management has steadily increased since the 1980s when

firms saw the benefits of collaborative relationships within and beyond their own

organization. Firms are finding that they can no longer compete effectively in

isolation of their suppliers or other entities in the supply chain. A number of

definitions of supply chain management have been proposed in the literature and in

practice. This paper defines the concept of supply chain management and discusses its

historical evolution. The term does not replace supplier partnerships, nor is it a

description of the logistics function. The competitive importance of linking a firm’s

supply chain strategy to its overall business strategy and some practical guidelines are

offered for successful supply chain management.

Peter Gilmour, (1998):

Over the last decade or so a number of significant research studies have focused on

the characteristics of an excellent supply chain. These studies have shifted the

emphasis from operational to strategic considerations. The practice of supply chain

management has also broadened to include both operational and strategic concerns. A

framework was developed to evaluate both the operational and strategic effectiveness

of the supply chain which was tested with ten consumer goods and automobile

manufacturers. It was found that consumer goods companies had significant room to

48
improve their logistics operations. But none had a logistics strategy to guide the

change. Automotive companies, on the other hand, had more sophisticated logistics

operations and had plans to improve further over the next two years. The framework

described in this paper provides a useful benchmark set for focusing change projects

to improve both operational and strategic capabilities of the corporate supply chain.

49
 CHAPTER - 4

OBJECTIVES OF STUDY

Fixing the objective is like identifying the star. The objective decides where we want
to go, what we want to achieve and what is our goal or destination.

Every study is carried out for the achievement of certain objectives.

1. To study supply chain management at McDonald’s India Pvt. Limited.

2. To get the knowledge about how manufacturing firms deal with the inventory

from cost effective view, the study can be useful.

3. The study of inventory on supply chain is to examine the relationship between

inventory inaccuracy and performance in a retail supply chain.

4. Explore the benefits reaped by the company as a result on the value chain

efficiencies through SCM and the contribution of SCM to the company’s survival

and competitive advantage.

5. Discusses the concept of supply chain management and the benefits of revamping

the SCM practices.

50
 CHAPTER - 5
RESEARCH METHODOLOGY

Research methodology makes the most important contribution towards the

enrichment of study. In a research there are numerous methods and procedures to be

applied but it is the nature of the problem under investigation that determines the

adoption of a particular method for all studies.

 REASEARCH DESIGN:-

The research design chosen is a combination of Exploratory and Descriptive research.

For this purpose, this study was conducted in the following steps:

 Firstly, the relevant information was collected to meet the need of objectives

by a well designed questionnaire

 Secondly, an analysis of the data collected was made.

 Thirdly, the finding and suggestion was presented.

 DATA COLLECTION

Primary Sources : Questionnaire and Personal interview

Secondary Sources : various, journals, reports, magazines, and websites.

Questionnaire

i. Sample Size : 50

ii. Sample Composition

1. Manager/Staff Heads of : 10

2. Operation Departments : 10

3. Supervisors /Workers : 10

51
 4. Production Department : 20

 SAMPLING PLAN:

 Universe: all employees of McDonald’s India Pvt. Ltd.

 Population: Keeping in view the time and resources constraints the

population will be restricted to the Employees of the McDonald’s India Pvt.

Ltd.

 Sample unit – an adult who is working McDonald’s India Pvt. Ltd.

 Sample size – 50

 Sample technique – random sampling is used to collect the sample.

Data Analysis & Interpretation – Classification & tabulation of the raw data

collected through questionnaire was converted to useful information by organizing

and compiling the data obtained from responses to the questionnaire Simple

tabulation of data using tally marks.

DATA PRESENTATION

The data was presented by way of suitable charts and diagrams

STASTICAL TOOLS:

The tools used in this study were Ms-Word and Ms-Excel used to prepare charts and

graphs. Ms-Word was used to prepare or write the whole project report.

52
LIMITATION OF THE STUDY:

The findings of the study are based on the information provided and data provided at

particular area. An effort was made to make the study as accurate as possible, 100%

accuracy cannot be claimed because of the following reasons: -

 The sample size to study is Limited to the particular area only.

 Sample to be drawn by Quota sampling, so the possibilities of sample error

cannot be ruled out.

 Time was the biggest constraint but all effort made to get all the relevant

information required for this study.

 Some of the sampling and non-sampling errors may creep into the study.

53
 CHAPTER – 6

DATA, ANALYSIS AND INTERPRETATION

Evaluation of the Study:-

A detailed analysis of the study is necessary and is to be considered in order to

compare the actual theory with that practical the variants of which may form the basis

for improvements. Keeping this point in view and to fulfill the evaluation variants of

which may form the basis for objectives of the studies an attempt has been made to

segment the various respondents on the basis of some aspects collected from them

through questionnaire. There are depicted through tables and graphs.

The copy of questionnaire administered is enclosed and the sample size was

50 respondents are enclosed at the end of this project. All the calculations and

numerical interpretations are for 100%.

54
1. How successful do you think is your company in managing its supply chain in
general?

TABLE – 1

Criteria Frequency Percentage

Not successful at all 3 6%
Not successful 4 8%
Somewhat successful 14 28%
Successful 20 40%
Very successful 9 18%

ANALYSIS AND INTERPRETATION:-

As shown by the pie chart, 40% of respondent Successful think is your company in

managing its supply chain in general, 28% of respondent somewhat successful, 18%

of respondent Very successful, 8% not successful and 6% of Not successful at all.

55
2. Does your company have a separate logistics or Inventory department?

TABLE – 2

Criteria Frequency Percentage

Yes 45 90%
No 5 10%

ANALYSIS AND INTERPRETATION:-

As shown by the graph, 90% of respondent think company has a separate logistics or

Inventory department, 10% of respondent not think like that.

56
3. Does your company have a clear SCM strategic plan?

TABLE – 3

Criteria Frequency Percentage

Yes 47 94%
No 3 6%

ANALYSIS AND INTERPRETATION:-

As shown by the graph, 94% of respondent think company has a clear SCM strategic

plan, 6% of respondent not think like that.

57
4. How satisfied are you with the current inventory policy regarding SCM?

TABLE – 4

Criteria Frequency Percentage

Not at all 3 6%
Somewhat 6 12%
Satisfied 23 56%
Quite satisfied 12 24%
Very satisfied 6 12%

ANALYSIS AND INTERPRETATION:-

As shown by the pie chart, 56% of respondent satisfied with the current inventory

policy regarding SCM, 24% of respondent quite satisfied, 12% of respondent Very

satisfied, 12% Somewhat and 6% of respondent Not at all.

58
5. Is supply chain management having all the address of the developer branches

of the company?

TABLE – 5

Criteria Frequency Percentage

Yes 39 78
No 11 22

ANALYSIS AND INTERPRETATION:-

As shown by the graph, 78% of respondent think supply chain management having all

the address of the developer branches of the company, 22% of respondent not agrees

with it.

59
6. Rate the working strategies of supply chain management department on the

basis of the current programs?

TABLE – 6

Criteria Frequency Percentage

Outstanding 6 12%

Excellent 5 10%

Good 24 48%

Average 15 30%

ANALYSIS AND INTERPRETATION:-

As shown by the pie chart, 48% of respondent feel good working strategies of supply

chain management department on the basis of the current programs, 30% of

respondent Average, 12% of respondent Outstanding, 10% Excellent.

60
[

7. Is the supply chain management department is having sufficient

transportation and capacity?

TABLE – 7

Criteria Frequency Percentage

Yes 46 92
Not sufficient 4 8%

ANALYSIS AND INTERPRETATION:-

[[[[

As shown by the graph, 92% of respondent think supply chain management

department is having sufficient transportation and capacity, and 8% of respondent

think not sufficient.

61
8. Choose the right option, where the supply chain department is facing problem

in taking care of the raw material?

TABLE – 8

Criteria Frequency Percentage

During storage 17 34%

Packaging 15 30%

Testing of packaging 7 14%

Evaluation of defective raw 11 22%

material

ANALYSIS AND INTERPRETATION:-

As shown by the pie chart, 34% of respondent feel during storage, 30% of respondent

Packaging, 14% of respondent Testing of packaging, 22% Evaluation of defective raw

material.

62
9. How do you rate the delivery activity and Inventory management of the

department?

TABLE – 9

Criteria Frequency Percentage

Excellent 6 12%

Very effective 14 28%

Good 20 40%

Average 10 20%

ANALYSIS AND INTERPRETATION:-

As shown by the pie chart, 40% of respondent feel Good delivery activity and

Inventory management of the department, 28% of respondent Very effective, 20% of

respondent Average, 12% Excellent.

63
10. Is there any case recorded by the supply chain department in which the

production department complained late delivery of raw materials?

TABLE – 10

Criteria Frequency Percentage

Yes 8 16%

No 42 84%

ANALYSIS AND INTERPRETATION:-

[[[[

As shown by the graph, 84% of respondent think No, and 16% of respondent think

Yes.

64
 CHAPTER – 7

FINDING AND OBSERVATIONS

 The findings of the study of “An Analytical Study of Supply Chain

Management:- A Case Study of McDonald’s India Pvt. Ltd.

1. As per the outcome of the study 40% of respondent Successful think is your

company in managing its supply chain in general, 28% of respondent Somewhat

successful, 18% of respondent Very successful, 8% Not successful and 6% of Not

successful at all.

2. From the outcome of the study it is evident that 90% of respondent think

companies have a separate logistics or Inventory department, 10% of respondent

not think like that.

3. As per the outcome 94% of respondent think company have a clear SCM and

operation strategic plan, 6% of respondent not think like that.

4. From the outcome of the study it is evident that 56% of respondent satisfied with

the current inventory policy regarding SCM, 24% of respondent quite satisfied,

12% of respondent Very satisfied, 12% Somewhat and 6% of respondent Not at

all.

5. 48% of respondent feel good working strategies of supply chain management

department on the basis of the current programs, 30% of respondent Average,

12% of respondent Outstanding, 10% Excellent.

6. 92% of respondent think supply chain management department is having

sufficient transportation and capacity, and 8% of respondent think not sufficient.

65
7. As per the outcome of the study 34% of respondent feel During storage, 30% of

respondent Packaging, 14% of respondent Testing of packaging, 22% Evaluation

of defective raw material.

OBSERVATIONS AND SUGGESTIONS

 Good coordination among employees.

 Despite of long and regular shifts employees are enthusiastic at work.

 Long shift may now be organized and work may be divided.

 Manual entries are still predominant which take on resources.

 Regular training to staff on subjects like materials management, logistics, time

management, operations and process may increase productivity.

 Structure is defined but authority and responsibility is not clearly defined at

Warehouse.

 No schedule is currently being followed for delivery of goods at Stores.

66
 CHAPTER – 8

CONCLUSION AND RECOMMENDATION

 After doing this project in McDonald’s India Pvt. Ltd., I understand how

exactly the work is done in the supply chain but after observing many things

I reach to the conclusion that there are still many gaps in the supply chain of

the company and we must try our best to fulfill these gaps so that we provide

better service to our customers and also reduce our operating cost because

we are in value retailing so only cost cutting provides us better margins and

to archive all this we have to work hard and make strong relation with our

vendors, logistics service provider and with our Customers.

The conclusion is when optimizing the inventory management, both up stream and

down stream activities will run effectively. Inventory inaccuracy is a main issue in

businesses dealing with physical assets. The results indicate that an elimination of

inventory inaccuracy can reduce supply chain costs as well as the out-of-stock level.

Auto-ID technologies can be one means to achieve inventory accuracy.

This study illustrates cost factors and the reasons. Subsequently, cost components will

be calculated. Finally, relationship of inventory to other activities will be overviews.

The results show that intra-firm inventory management flexibility, which reflects

internal competence, has a positive impact on service capabilities and performance,

while inventory coordination flexibility, which captures inter-firm competence, has no

significance on those elements.

67
Due to the effective inventory management, procurement goal can be achieve quickly.

When optimize the inventory management, up stream activities will run effectively

meanwhile downstream activities will go ahead without any stoppage.

RECOMMENDATIONS:

 While Dispatching LORRY from WAREHOUSE Separate Vehicle is sealed for

One only Location. Due to that we cannot dispatch goods in that lorry for some

other location. But if we can make identification on The Cartoons then we can

take Goods of Other Location also with It.

 STOCK Tally at Store which are Forwarded by WAREHOUSE. This is not

practice within The Store by Sales Team at the time of Inwarding. If we start

practicing it we can identify the Short Supplied Goods from Warehouse which

will not create SHRINKAGE at the Time of Stock Take in STORE.

 WRONG Affixation of Barcodes on Merchandise by VENDOR at the time of

Dispersement from VENDORS SITE to Our CDC Warehouse.

 At time of RETURING Stock to WAREHOUSE The STOCK must be stringently

be TALLY with the RSTO document THE MRP , ARTICLE Code , ARTICLE

DESCRIPTON with Condition of the STOCK . To avoid any Inconvenience at the

CHECK POST.

 MANPOWER TRAINING for Inventory Software on SAP.

 In warehouse there must be clear distinction between the rows and some space is

also being there for easy handling of material.

 A first in first out format is used to move stock out from the warehouse so that old

stock is not remaining in the warehouse.

68
 Company instructs the vendors of Apparel category that they pack the shirts and

trousers in polycovers of better quality so that they are not comes out from the

cover.

 Vendors must see that bar codes are properly attached to the product because if

bar codes are not attached with product employees are not able to enter that item

in SAP in most of the cases.

 If WH employee enter any article in SAP which is without bar code by see its

article code on other article of same type then he must put bar code on the product

latter so that same problem does not occur in the store.

 WH must instruct employees that they open cartons of stock properly so that is

used

 Again because most of the cartons get damaged employee do not open them

properly.

69
REFRENCES

1. A. Federgruen. 2004. The operational benefits of information sharing and vendor

managed inventory (VMI) programs. Working paper, Washington University, St.

Louis.

2. Anand, K., H. Mendelson. 2007. Information and organization for horizontal

multimarket coordination. Management Sci. 43 1609– 1627.

3. Aviv, Y. 2009. The effect of forecasting capability on supply chain coordination.

Working paper, Washington University, St. Louis, MO.

4. Cachon, G. 2001. Exact evaluation of batch-ordering policies in two-echelon

supply chains with periodic review. Oper. Res. Forthcoming.

5. cf. Andreas Wieland, Carl Marcus Wallenburg (2011): Supply-Chain-

Management in stürmischen Zeiten. Berlin.

6. Doug Page,"Dayton Region a Crucial Hub for Supply Chain Management",

Dayton Daily News, 2009-12-21.

7. Harland, C.M. (2007) Supply Chain Management, Purchasing and Supply

Management, Logistics, Vertical Integration, Materials Management and Supply

Chain Dynamics. In: Slack, N (ed.) Blackwell Encyclopedic Dictionary of

Operations Management. UK: Blackwell.

8. Lambert, Douglas M.Supply Chain Management: Processes, Partnerships,

Performance, 3rd edition, 2008.

9. Mentzer, J.T. et. al. (2001): Defining Supply Chain Management, in: Journal of

Business Logistics, Vol. 22, No. 2, 2001, pp. 1–25

10. nvestor Words definition of "tax efficient"

11. Stevens, 1989; Ellram and Cooper, 1993; Ellram and Cooper, 1990; Houlihan,

1985

70
12. Zhang and Dilts, 2004 ;Vickery et al., 2003; Hemila, 2002; Christopher, 1998;

Joyce et al., 1997; Bowersox and Closs, 1996; Williamson, 1991; Courtright et

al., 1989; Hofstede, 1978

13. http://www.mcdonaldsindia.net

71
1.
2.
3.
4.

72
 QUESTIONNAIRE

DEAR RESPONDENTS:

I am Ashima Singh, a student doing MBA. I am underlying a project named “AN

ANALYTICAL STUDY OF SUPPLY CHAIN MANAGEMENT:- A CASE

STUDY OF McDonald’s India Pvt. Ltd.”. So by filling this questionnaire

please help me in completing my research project.

Name : ……………………………….

Age : ……………………………….

Address : ……………………………….

Contact No.: ……………………………….

1. How successful do you think is your company in managing its supply chain in

general?

 Not successful at all

 Not successful

 Somewhat successful

 Successful

 Very successful

2. Does your company have a separate logistics or Inventory department?

 Yes

 No

3. Does your company have a clear SCM strategic plan?

73
 Yes

 No

4. How satisfied are you with the current inventory policy regarding SCM?

 Not at all

 Somewhat

 Satisfied

 Quite satisfied

 Very satisfied

5. Is supply chain management having all the address of the developer branches

of the company?

 Yes

 No

6. Rate the working strategies of supply chain management department on the

basis of the current programs?

 Outstanding

 Excellent

 Good

 Average

7. Is the supply chain management department is having sufficient

transportation and capacity?

 Yes

74
 Not sufficient

8. Choose the right option, where the supply chain department is facing problem

in taking care of the raw material?

 During storage

 Packaging

 Testing of packaging

 Evaluation of defective raw material

9. How do you rate the delivery activity and Inventory management of the

department?

 Excellent

 Very effective

 Good

 Average

10. Is there any case recorded by the supply chain department in which the

production department complained late delivery of raw materials?

 Yes

 No

75