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Operations Management Assignment Analysing Operations of McDonald’s


Task: This operations management assignment is an individual research report that is focused on ensuring that students are able to do quality research (peer reviewed articles (most important), textbook, reports, etc.) into the fast food industry.

Students are expected to answer the following questions:

  • Identify both established and emerging consumer value propositions within the fast found industry.
  • Provide a process map (or flowchart) of a fast food restaurant’s order fulfilment process.
  • Discuss the application of manufacturing excellence in fast food chains
  • Review the relationship between service quality and profitability in the industry
  • Describe the current and potential operational challenges faced by managers in the fast food industry.
  • Provide recommendations for improving the service operations of the fast food restaurants.


Established and Emerging Value Propositions in the fast-food industry
Low priced products

After quite a lot of years of increasing higher-priced goods, for example, speciality burgers, the corporation is putting more stress on making and advertising lower-priced matter. In China and Singapore, some combo foods' costs were condensed by a good deal of one-third.By the purchasing power, the company has some suppleness in the margins to draw the other public to come in by providing a discount on an entire variety of food (Londonet al., 2015). The McValue lunch plan gathered favourable consequences in lots of countries. Competition is also rigid in Asia as customers have a broader option of reasonably priced eating places, from food courts to snack food chains. In Asia-Pacific, the Middle East and Africa, relaxed eating is a US$765 billion business, And it has been mounting at 9% to 11% per annum.

Distinct products
McDonald’s has been initiating lattes, cappuccinos and mochas and broadcasting the McCafé part of its carte du jour. The shove into finest coffee aid has provided McDonald's well. The company has also introduced cheeseburgers, Hamburgers, apple pies, French fries, and the main competencies (Patalaet al., 2016). The company has brought in diverse desserts and chicken. Along with it, there is also iced coffee and the finest coffee.

Fast and efficient service
The company also serves efficient and quick services to its customers throughout the globe. The fast-food chain makes sure that the customers are provided with their orders as soon as possible with no compromise in quality of the food that they are being served with. "Drive-thru" service provided Americans with a quick, suitable method to obtain a fast meal (Patalaet al., 2016). Drive-thru sales finally led to more than half of Mcdonald's organisation-wide trades.

Process Map of Order Fulfilment Process

order fulfilment process in operations management assignment

Fig 1: order fulfilment process
(Source:, 2021)

Application of manufacturing excellence
All over the globe, the populace is overwhelmed by the high standard of hygiene and constancy of service established in every fast-food eating place. They are all astonishing in upholding their excellence standard. Though manufacturing fineness was at first intended for use in manufacturing businesses, it is not only for industrial units. It is appropriate to any business processes (Rashid and Tjahjono, 2016).

The manufacturing excellence of McDonald's can be seen in its operational superiority and its hygiene, and efficiency of service standards. McDonald's has an exceptionally straightforward menu. When the business began, its menu was thin. Over time, because of declining trade in a few markets and amplified rivalry, the business has yielded to the lure of growing its menu. The company, though, maybe is going in the wrong direction by doing this – operational excellence desires a petite menu. McDonald's attempts and preserves steadiness in taste. Certainly, it modifies its menu based on the nation it is working in; in a nation, there is extraordinary uniformity across openings. McDonald's pursues a steadiness in decoration and familiarity. The facility is speedy, and the surroundings are very welcoming (Devet al., 2020). McDonald's presents good superior food at very sensible costs. McDonald's presents harmless, dirt-free food and is tremendously well-organised in service. McDonald's has excellent constancy in promotion and marketing.

The company has preserved grand associates in Disney and Coca Cola for numerous years. The critical component at the back of all this is the exceptional organisations that McDonald's has in position. The most imperative object that guided McDonald's accomplishment is that its executives are enthusiastic about doing what it takes to go behind events and execute rules that make sure workers pursue them meticulously. There are a few wonderfully uncomplicated organisations in the McDonald's programme, and for merely about each circumstance that a person might come across, there is an arrangement in place to assist them succeeds in those circumstances competently.

Relationship between service quality and profitability
Quality and profitability

The corporation has been pursuing innovations and utilising different skills for the reason of offering quality goods and facilities to the consumers. McDonald’s is the major fast-food chains in the globe. The corporation has been conductingdifferent actions to please its clientele. McDonald’s is in the last position in clientapproval, regardless of being the peak fast food business in provisos of revenue. McDonald's has a low score in clientapprovalcontrasted to other junk foodbusinessthroughout the USA and furtherglobalstates. McDonald’s believesalong with the customers’ flavours, value organisations, way of life, verbal communication and insight that reproduce the promise of the trade to augment and perk upclient satisfaction (Jani and Desai, 2016). Theworkers of McDonald's have been centring on the exacting demands and wants of the consumers to augment their height of approval on the goods and services at the trade. The majority of the workers at McDonald’s are chattingcontinually with the clientele to obtain their criticism and proposals and thereforeexpand the business rule to decrease customers’ grievances in association to boostclientapproval at the tradecontrasted to other contestants in the junk food industry (Namin, 2017). McDonald’s has been giving training to employees while consideringinstantdevelopments in clientapproval. It is all concerning the effectualeverydayorganisation of each eating place and how every trainee can add to perk up and boostclientapproval, which can augment the service quality.

Service and profitability
Improved qualitative instant and service organisation influences the short-term abundance of McDonald's. Growing customer pleasure is more probable to convey optimistic consequences, for example, boost in sales amount and revenue. Profitability augments with advanced customer maintenance and approval stage and also results in superior potential revenues and cheap charge of operations (Kukanjaand Planinc, 2018). Service quality improves purchaser devotion and preservation that consecutively augment the financial presentation of the company and adds to productivity. Changes in customer fulfilment are certainly associated with modifications in real income, net proceeds and earnings per share.

Operational Challenges
Current Operational Challenges

  • Management
    The everydayorganisation of aneating place is boring and demanding. There are numerousstatisticsassembly and figurechomping. However, this is one of the mainlysignificantmechanisms of the restaurant mechanism. It is important to perform a proper analysis of the business that takes into consideration the number of visitors, standard check of guests, staff costs, and sales goals, and so on (Aldaihani and Ali, 2018). This is, however, a challenge as managing these days can be stressful for a manager.
  • Effectual Inventory organisation and Menu cost
    List and menu cost must take into thought the ordering procedure to restrict waste. This will have a straight effect not only on the surroundings but also on the variable element expenses, which affects the gross profit onset of choices items (Khanna, 2015). Menu pricing must be natural and have changeableness as recurrent and minute augment in menu costs are easier to advertise than better, more obvious boosts done rarely.
  • Hiring and teachingemployees
    Hiring and teaching the correctworkers can make the disparity when it comes to theeverydayprocess. Having reliable, practical and dependable staff associateconveys peace of mind. Thus far, the workerrevenue rate in the eaterybusiness is high.Placing betterstress on finding and teachingworkers will assist the restaurant todecreaseexpenses over time and might also permit it to offerimprovedclient service and improvedclientunderstandingin general (Shumba and Zindiye, 2018).

Potential Operational Challenges

  • Adjusting to increasing minimum salary
    Restaurantsrequirecentring on optimising worker costs (particularly as a fraction of sales). Labour is one of the maineatery operational expenses. However, it is as well one of the most convenient.To optimise manual labouremployment and teachingexpenses, restaurant workers can consult restaurant process gear to decreaseexpenses over time. By incorporating a POS system with asecretarial and preparationstage, work and sales informationmight be utilised for smart forecasting (Saucedo-Martínezet al., 2018). Gearsimilar to cloud-based bistropreparation software and centralcell phone apps for workers can assist make workpreparation more competent.
  • Managing multifaceted, revolving inventory
    Restaurant inventory organisationengages a large figure of moving parts, a lot of which are “provisional” contrasted to other sellingcommerce. Elementexpenses are one of a restaurant’s mainoperating costs, and organisation of inventory preciselymight be hard. Bistro owners wanting to continue with the stable list alteration can use inventory organisation software that covers the recording procedure from back-to-back, from including and moving to arranging and invoicing (Kanyanet al., 2016). Some fractions of inventory might not be mechanical, similar to counting by hand. However, they might be sleek by pattern record sheets on a telephone or tablet machine; other lengthy rudiments of record might be automatic, similar to tracking component expenses and generating journal entries.
  • Reacting to uneven guest favourites and hope
    The dining familiarity is foreverdeveloping, and currentvisitors have madedissimilarclient service prospectregarding diet, nourishment, antipathy and sensitivities. Additionally, to drifting toward an additional health-conscious method of consumption, clientelemore and more have inquiriesregarding sustainability in the supplying of elements (Sumaedi and Yarmen, 2015).

With consumers demanding more answerability and clearness, suppleness in making carte du jourmodernising has become a need. To upholdproductivity, organisation teams must keep one gaze at theclient taste tendencies and one eye on the fare and workexpenses.

  • Maintaining precise, money-making menu cost and preparation.
    As a menu is one of the main noticeable parts of restaurant advertising, upholding a pertinent, gainful menu is necessary for a restaurant's outcome. The main operational challenge with making a menu is to have a sense of balance between productivity and fame. Restaurant managers leveraging eatery processes software might use menu manufacturing gear to imagine drifts in their menu items, grab hold of new chances, and make alterations where essential (Sumaedi and Yarmen, 2015).

Internal services

The Human Resource Department have to have recruitment plans that highlight the individuality of the workers, staffing and assortment course. To augment the rank of customer approval and better service quality, it is very significant for the Human Resource Department to employ workers who are practical, have superior communication abilities and are attentive (Baran and Y?ld?z, 2015). Besides job stipulation, HR Managers and superintendents can use job images to choose workers and adjust them to work.

Training and growth are wanted for all of the employees in an eatery since it improves the aptitude of workers to convey a premium service and to convene the requirements of clientele more efficiently and in a welcoming manner. The skills might be improved and grown within the workers who are significant to fulfil the long-standing objectives in embracing the clienteles’ wants by modernism, dependable excellence product and exceptional customer overhaul (Shumba and Zindiye, 2018). For the non-managerial workers, the Human Resource subdivision might utilise the "On the Job Training (OJT)" process. OJT has the benefit of offering practical understanding beneath standard working circumstances and a chance for the manager and kitchen administrator to construct a good association with the innovative workers

External services
“Total quality management (TQM)” is the organisation of an entire company so that it stands out in all features of goods and services that are significant to the consumer. The major objective of "total quality management" is to fundamentallychange the organisation by progressivealterations in the outlook, performances, arrangements, and systems. “Six Sigma” is anagendaintended to decreaseimperfections to reduceexpenses, save time, and get betterconsumerapproval (Jani and Desai, 2016). To attain and maintain business achievement, “six sigma”has to have a plan, a regulation, and a series of tools. In enhancing the quality overhaul of a bistro, there is a need for a plan that concentrates on real customer pleasure.

Planning and carrying outplan and layout have to be made carefully to make sure that the atmospheric and surroundingsrudiments in a bistro become more tempting, nice-looking, nonviolent and relaxed. The layout plan is mostly to perk up the roomjointly with the figure of consumer who arrived (Rashid and Tjahjono, 2016). The innovativearrangementplanned is for two consumersfor each batch in common with other benches that offerequal to fourteenconsumersfor each batch. The couple table is initiatedasderived fromsurveillance;severalclientelesapproach with their associates, which suggests two publicfor each batch.

Service operations management is necessary for the food industry. The restaurants such as McDonald's are needed to constantly and incessantly map, execute, assess and perk up on a range of features of the service processes for best client contentment, revisits and optimistic word-of-mouth. Better consumer service assists in developing a special connection with consumers, whichcan bring about long-standing connection.

Reference list
Aldaihani, F.M.F. and Ali, N.A., 2018. Factors affecting customer loyalty in the restaurant service industry in Kuwait City, Kuwait. Journal of International Business and Management, 1(2), pp.1-14.

Baran, Z. and Y?ld?z, M.S., 2015. Quality function deployment and application on a fast-food restaurant. International Journal of Business and Social Science, 6(9), pp.122-131.

Dev, N.K., Shankar, R. and Qaiser, F.H., 2020. Industry 4.0 and circular economy: Operational excellence for sustainable reverse supply chain performance. Resources, Conservation and Recycling, 153, p.104583.

Jani, S.Y. and Desai, T.N., 2016. Review of lean manufacturing practices-critical success factors and performance measures for SMEs. International Journal of Quality and Innovation, 3(1), pp.30-41.

Kanyan, A., Ngana, L. and Voon, B.H., 2016. Improving the service operations of fast-food restaurants. Procedia-Social and Behavioral Sciences, 224, pp.190-198.

Khanna, R.B., 2015. Production and operations management. PHI Learning Pvt. Ltd..

Kukanja, M. and Planinc, T., 2018. Influence of managers' perceptions of quality on restaurant operational profitability: Evidence from Slovenian SMEs. Tourism: An International Interdisciplinary Journal, 66(2), pp.115-120.

London, N., Pogue, G. and Spinuzzi, C., 2015, July. Understanding the value proposition as a co-created claim. In 2015 IEEE International Professional Communication Conference (IPCC) (pp. 1-8). IEEE.

Namin, A., 2017. Revisiting customers' perception of service quality in fast-food restaurants. Journal of Retailing and Consumer Services, 34, pp.70-81. Patala, S., Jalkala, A., Keränen, J., Väisänen, S., Tuominen, V. and Soukka, R., 2016. Sustainable value propositions: Framework and implications for technology suppliers. Industrial Marketing Management, 59, pp.144-156.

Rashid, A. and Tjahjono, B., 2016. Achieving manufacturing excellence through the integration of enterprise systems and simulation. Production Planning & Control, 27(10), pp.837-852.

Saucedo-Martínez, J.A., Pérez-Lara, M., Marmolejo-Saucedo, J.A., Salais-Fierro, T.E. and Vasant, P., 2018. Industry 4.0 framework for management and operations: a review. Journal of ambient intelligence and humanized computing, 9(3), pp.789-801.

Shumba, K. and Zindiye, S., 2018. Success factors of franchise entrepreneurs operating in a volatile business environment: A case of the fast-food industry Harare, Zimbabwe. The Social Sciences, 13(4), pp.908-991.

Sumaedi, S. and Yarmen, M., 2015. Measuring perceived service quality of fast food restaurant in Islamic country: A conceptual framework. Procedia Food Science, 3, pp.119-131.


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