Operations management Assignment Review Analysis Online: Importance of operations management and network diagram – McDonald’s

Questions asked??

Write a report on operations management and its importance with the help of network diagram with respect to McDonald’s??

Solution the Task frame is::

Importance of operations management:

As per Hussey (1998) operations management helps organizations to maintain an effective and functional operation that help the organization to grow. This is important for all organization be it an IT firm, a service firm or a restraint like McDonalds.

Operations management at McDonalds is one of the most important factors that make the organization one of the most flourishing fast food restaurants globally. The organization makes use of computerized information systems and strict corporate quality standards to sustain quality at their restaurants. To put into effect the standards, the organization undertakes comprehensive inspections on each restaurant two times per year. Also, scrupulous training processes make sure that all McDonald’s employees have the appropriate knowledge to meet the organizations standards, which will in turn make their customers happy.

Thus for McDonalds the customer satisfaction becomes the most important factor and this makes operations management so important for them.

Need for on time services:

As per Marr (2006) the industry in which McDonalds works is one where there is a lot of focus by the customer on the time of delivery. Even the legal requirements are such that the restraint has to maintain a good quality standard along with a satisfied customer.

Every restraint has to maintain a food quality standard which is governed by the local food authority. Also each and every restraint has to look into the speed of their delivery not because of any legal standard but because each and every customer that visits wants a good delivery time and this becomes ever more important in the current extra competitive scenario. Thus these are the basis on which the organization can move ahead.

The cost is another important part of this cycle and any organization has to look to reduce costs to make sure that they are competitive when compared to their peers. Thus even more McDonalds all of these hold true as they too have to compete in such a market.

Operations Management and strategic planning:

As per Ansoff (1990) the relationship between strategic planning and performance management or operations management is very important Operations management basically deal with the setting of goals and strategic planning is all about making the groundwork for the setting of these particular goals. Thus for every organization there has to be a strategy to manage their own resources and then the actual management is done by operations management techniques. For a restaurant like McDonalds there has to be a much managed planning of the resources and how they are implemented. For McDonalds the strategic planning has to focus on the time and cost aspect and this shall bear results in the operations management of the organization.

Working model of a McDonald’s restaurant:  

The food chain has a very standardized model for most of their outlets. And this is shown below.

The supply chain shows that how the restaurant works from the collection of the basic raw material to the selection of the supplier for this particular raw material. The next step takes into consideration the cooking of this particular material and this then moves forward into the process of making this into something that can be eaten and this is perfumed by the various machines that have been installed in the outlet. The next step is the orders taken from the customers and the priority of the orders as per the time of the order. This shows that the organization believes in the first come first serves basis and this is showcased in the policies of the organization. The chain takes care of each and every activity starting from the delivery of raw material to the final consumption.

3 E’s – Economy, Efficiency & Effectiveness

As per Bartlett & Ghoshal (2000) for any organization no matter what they are working on needs to be efficient to be able to create a more effective form of a system that makes the economy of the organization and the country grow. There has been a lot of incidents where the organization have not be able to create an effective system and this has affected their growth at a very fast pace. However the most effective an organization has to be is the food chain industry as here there are a lot of options available for the customers and this shows that the organization cannot hope to let go and be slack at any point of time.

Efficiency is the utilization of the resources in such a manner that they are not wasted at all. This is applicable to the basic raw material that McDonald gets ranging from potatoes to the buns in the breads. The organization has to make sure that the vegetables and the buns are not wasted and there should be an optimization in the resources and this show in the final cost analysis of the firm.

Effectiveness is the way the operations strategy is functioning in the organization and how it actually affects the final results of the organization. And this is why it becomes such an important part of the overall picture in which McDonald functions.

Economy deals with how the organization is working in the overall impact of the society and itself. The economy should deal with the ideal process of making the organization more beneficial.

As per Roach (1998) the organization is always dealing with the fact that there can be better ways to do the job better and at a better cost and not by reducing the quality of the product. This is possible by a lot of methods but the correct method for the organization is something that not many organizations have not been able to decipher. The food chain industry is one such industry where this kind of the trade off is very important and this is why this is one such activity that the organization has to keep a lot of focus on.

For McDonald’s there has been a constant battle between the cost the time taken for the production of the products and the quality of the products.

Thus there has been a lot of trade off but the organization has taken into consideration the fact that the customers would be most satisfied with the quality and hence there has been focus on the quality and the organization has taken into consideration the prospects of backward integration that makes the organization grow their own resources and this saves on the costs while the time is saved by the training of the employees and this makes the organization as successful as it is right now.

Significance of the 5 criteria : Cost / Quality / Speed / Dependability / Flexibility

The organization has to take of the following 5 criteria which include:

Cost:

As per Ross (1998) the organization has to make sure that the cost of the products remains to lowest and this can be achieved by backward integration or by the lowering of the cost on which the raw material is acquired by the organization. Thus the cost aspect of the organizations operation management strategy has to be to reduce the costs as much as possible.

Quality:

As per Ross (1998) this is one the aspects of the overall functioning of the organization where there has to be a total focus and there has to be certain level of quality to be totally maintained by the organization otherwise they risk losing their customers.

Speed:

The speed of the delivery of the products has to be maintained then only can the organization sustain itself in the current business scenario.

Dependability:

The organization has to maintain quality and this is something that shall help McDonalds in this particular aspect. As the quality of the product keeps on improving the dependability of the organization too shall improve. And not only the quality but a lot of other factors too help in the dependability of the organization.

Flexibility:

The organization has to be flexible to make sure that they are ahead of the times and McDonalds have to make sure that they are able to change with the times. Their operations strategy along with their ways of functioning including the way the products are made and served have to made according to the changes in the technology and the tastes of the customers.

Linear programming:

As per Bard (2004), many operations management decisions entail trying to make the most efficient use of an organization’s resources. Resources characteristically include machinery (such as planes, in the case of an airline), labor (such as pilots), money, time, and raw materials (such as jet fuel). These resources may be used to produce products (such as machines, furniture, food, or clothing) or services (such as airline schedules, advertising policies, or investment decisions). Linear programming (LP) is a extensively used mathematical modus operandi designed to help operations managers plan and make the decisions necessary to allocate resources.

For McDonald the application of linear programming is the way that they can provide the required product to the customer at the right time by making use of the linear programming solutions. They can take into consideration the various variables including the time taken for the acceptance of an order and the time taken then from the acceptance to the final delivery of the product to the customer.

For them the major constraints under which the organization works are the number of employees that are working a particular shift and the number of resources that are available for the organization to utilize. Thus the organization has to make sure that they are using this to make sure that they are able to achieve the highest level of customer satisfaction.

Network analysis and critical path analysis

As per Ryan (2000) the basic factors that are making the organization ticks is the fact that there is a lot of factors that have been used by the various other organization in the past few years where they have been successful. The reason why there has to be this analysis in the organization is that it allows it to make a case for successful operations management.

The main basis on which the Network analysis should be used is the fact that there have been a lot of other networks besides the organizations that should be affecting the performance of the organization. And thus the organization has to make sure that the various networks should be aligned with the functioning of the organization. When McDonalds sets up a new franchise in oxford they should be aware of the various other networks that shall be affecting the functioning of the particular outlet and this should be a part of the overall analysis of the functioning of the new outlet.

The reason for the critical path analysis is the fact that there has to be a lot of processes that make the timing of the delivery of the final products to the consumers delayed and this makes them an unsatisfied lot. The critical path analysis can be done in the new franchises which can include the number of employees that are functioning slowly and then the number of processes including the delivery of the raw material which can have an impact on the final delivery time. Thus a critical path analysis’s should be done on the new franchise by taking into consideration all of the processes that can affect the overall delivery time.

Need of operations control

As per Desroisers (2000) each and every organization needs the correct amount of control to make sure that they are going in the correct path. Large stores of the company also form a considerable amount of results for the company. There has to be a set of control rules and regulations that govern the way these stores function and the way they are moving forward. The basic reason that there is a requirement of operations control is this. However there are other reasons as well. Resources are a luxury that not lot organizations have a lot of. This is why even if a store is small there has to be proper control on the resources spent and the results that they provide, the same can be said for the large stores and this can be the secondary reason that there is requirement of such control.

Operations outcomes

There has to be set of outcomes that occur and these include:

Quality:

The basic reason why there has to be focus on the quality is that there are so many competitors for McDonalds in the industry that they shall have a tough time trying to ascertain the exact quality of each of them and hence they should be a focus on the quality of the products that they offer to their customers.

Cost:

This is another aspect of the organization and the customer relationship that makes a lot of organizations fail. They are not able to cut down on the costs and they perish in this business environment. And hence cost should be taken care of with utmost importance.

Network diagram & critical path analysis

As per Choi et al. (2001) the most basic requirement for a critical path is the various processes that form part of the actual way the organization is functioning and in this case the first step shall be basic legal requirements that shall have to be fulfilled by the organization to setup the new franchise. This should be the most time consuming part of the setup and this should be done the fastest. The next step is the development of the supply chain and this should not be taking more time then usually the organization takes. Thus these two forms the basic core tasks that consume time and should be done the fastest. The rest which include setup and training of new employees should be done in an efficient manner too.

Quality management:

As per Lessnau (2004), McDonald’s has a complex purchasing and quality assurance department. They have specialist in each area, beef, Poultry, Nutritionist, Chefs, and Agronomists and so on. The specifications for the raw quality should begin where the purchasing and manufacturing process begins. The specifications for lettuce are two pages long single spaced type. When McDonald’s opens a new country, they spend in excess of two years developing the supply chain. This includes everything that is used in the restaurant from milk to potatoes. Thus by developing a standardized quality setup they shall be able to make the quality across all the outlets in UK common. This shall help the organization to remain a leader in the fast food chain outlets in UK and all across the globe.

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