Answer to Question #280375 in Marketing for Sumaya

Question

Why is customer coproduction not widely practiced by high end fast food restaurants in Kenya (5 marks)

2.What is a 'Cold Chain'? Explain how McDonalds managed the components of the cold chain. Critically comment on the role played by the unique centralized distribution system in McDonald's supply chain. (10 marks)

3. 'McDonald's is one of the few companies that has placed substantial emphasis on effective and efficient supply chain management system as a means to leverage for competitive advantage.' In the light of this statement, analyse the steps taken by McDonalds to standardize its supply chain in India. (15 marks)

Answer 1

a)      

Customer coproduction is where the customer is determined and willing to participate actively in terms of his time and effort with the service provider right from inception and production stages. For restaurants, the customers assemble the furniture by themselves, follow directions on the food packages to prepare meals, scan their own groceries at supermarkets and use online banking. In hospitality, it is an exchange of service between customers and organizations built on a platform of production and consumption.

This practice is not widely used by high-end fast-food restaurants in Kenya because of the nature of the customers. The process is exhausting, demanding, time-consuming and costly in terms of time and effort and the customers are less satisfied with it. Customers do not have much time to prepare the meals for them because of their busy schedules and they want as they enter the restaurant to find everything ready for them to eat and continue with their duties in the offices.

b)      

A cold chain is a group of distant storage bins or storage compounds transporting products to the desired location. McDonald's is known to have applied this supply chain through following certain tasks and activities and which have proved to be effective. First, it ensures controlled conditions of the storage from a given temperature and uses special trucks designed for cold storage. It also maintains the optimum usage from the vehicles and compounds to ensure the efficiency of the vehicles and the compound to reduce the cost of operations and increase productivity. They also ensure anticipation and forecasting of future needs and resources to prevent shortfalls and reduction in delivery of goods. Finally, effective management of information in all centers and storage facilities ensured the success of the process.

The role played by the centralized distribution is handling the entire distribution in the country. The center is known as Radha Krishna Foodland and it has four distribution centers which are dry and cold storage facilities for storing and transporting perishables. Distribution centers do value addition like shredding of lettuce, re-packing of promotional items and this helps maintain the integrity of the products throughout the entire cold chain. The outsourced process is well managed and has been the cause of competitive advantage for it.

 

c)

McDonald's has outsourced in entirety its service and the long supply chain. For it to survive the competition and change with the changing environment, it has embraced technology as the only means. It uses models like HUB and SPOKE and different software to manage the process. Through the software, uploading orders was made possible, daily activities, staff scheduling process, daily forecasting of required stock. The software includes; SAP SCM, RAMCO ERP with COBRA.