Wednesday, September 10, 2014

Lean Production at McDonalds

McDonalds has been one of the key players in the fast food market since the mid twentieth century. It has been faced by tough competition since then, which has affected every aspect of its organisation. McDonlads has maintained its position in the market inspite of all the competition by adopting the ‘lean’ focus.
The key ‘lean’ practices folowed by McDonalds are described below.
Eliminating Waste
The key principle of lean philosophy is to instantaneously meet demand, and at the same time maintain quality and eliminate waste.
McDonalds adopted the following strategies to deal with the following sources of waste.

Overproduction
Earlier McDonalds used to prepare sandwiches in batches and keep them warm in warming bins. This would reduce the serving time, but it earned them a bad reputation as the wastage increased. To deal with this, they have now started to keep patties, salad and other sides ready, and combine them into finished sandwiches only once an order is placed. The time taken during this process is a few minutes, enabling a quick response to any demand change. Thus the risk of overproduction is eliminated.

Waiting Time
The use of modern technology has helped to drastically reduce the waiting time. A computer system communicates the order place by a customer to the production staff as soon as the order is placed. The modern cooking equipment and the highly skilled workforce at McDonalds prepare the order in less than a minute. Thus the processing of the entire order takes only three of minutes.

Processing Wastage
Processing wastes take place mainly because of excessive handling of the products being processed. At McDonalds the ‘Speedy System’ is used for assembling the order. This system which was introduced by the McDonald brothers is still in use.


Figure1: Food Production area at McDonalds

As seen in Figure1, the different operations are united and linked in the order of the assembly line. This reduces handling of the items, thereby reducing wastage during the order processing.

Inventory
According to the lean manufacturing principles, the organization should get rid of the inventory as holding it incurs opportunity cost. But McDonalds should meet demand at all the times. So to deal with this requirement, it has a sophisticated stock control system which helps to manage the process and eliminate wastage due to overstocking.

Defects
Wastage due to defects is avoided by McDonalds by simplifying the process. Their high standards are achieved by highly trained and motivated staff on duty. As a result defects are reduced and consequently wastage is reduced.

Involving Everyone
McDonalds places a great deal of importance on total employee involvement. Emphasis is placed on working as a team and involve everyone in the process. Every person, from the supplier to the staff serving the customers, everyone is involved in the process, fostering a lean culture. Also at McDonalds, they believe in multi-skilling, i.e every person should be aware of every stage of the operation. This helps build knowledge in the team. Apart from that, the assembly line system gives a sense of ownership and responsibility to everyone involved in the process.

Striving for Improvement
Achieving high quality with no wastage is the lean principle. It would be unrealistic to believe that McDonalds has achieved that. So they constantly try to improve as an organization and get closer to achieving this principle.



References:
Dixon, Nicole. "An Analysis Of How Mc Donalds Delivers Its Products And Services." An Analysis Of How Mc Donalds Delivers Its Products And Services. N.p., 18 Mar. 2010. Web. 10 Sept. 2014.
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