McDonald's Transition

LP2 Assignment: Transition

Sergio Soto

Operations Management

OM3000

16 June, 2016

Abstract

Love it or hate it, McDonald’s has always been the leader of the fast food industry.  Some might even say it is the creator of the industry.  Being the leader, however, does not come by accident.  In order for McDonald’s to be the company it is today, it has had to know how to navigate the corporate environment and changing its process selection was a major step in keeping its leading role in the industry.

McDonald’s Transition

        How orders from customers are fulfilled is a critical decision for a business; whether the product is made-to-order (MTO), assembled-to-order (ATO), or made-to-stock (MTS).  It is very important for a business to know their customers and what they are looking for.  McDondald’s, a long-time leader in the fast food industry, changed their order fulfillment process from MTS to MTO.  There are advantages and disadvantages.  Some can see that decision as risky but others see it as necessary.

        For many years, McDonald’s only provided just a few sandwiches and only had two peak hours per day.  Therefore, the sandwiches were being made ahead of time and stocked in a warmer ready for customers to order during those peak hours.  There was little room for customization and customers were not getting the freshest product but none of that seemed to matter at the time.  Suddenly, America starts getting more health conscience and the general public tries to make more health-oriented food decisions.  People want fresh.

        The incessant pursuit of freshness by consumers has led to the popularity of made-to-order sandwich shops likes Subway,         Quizno’s, and Jimmy John’s.  Suddenly, these once irrelevant restaurants are becoming formidable competitors to the fast-food industry giant, McDonald’s.  The trend was easy to see.  People want more variety, made-to-order, most of all, people want fresh.

        In the restaurant industry, especially fast-food, a big advantage of MTO is that it creates the perception of freshness.  When customers can see someone actually making their food order right in front of them, they get the sense of freshness and even healthy.  McDondald’s quickly jumped on this trend and was also able to offer more variety and greater customization, which are both advantages of the MTO process.