McDonalds Industry

McDonalds Industry

In the food industry such as McDonalds, Burger King, Kentucky Fried Chicken, Taco Bell, and etc., control systems are used to track supplies, performance of sales and employee. Control systems provide managers with the information needed to measure and monitor performance. This paper will discuss certain areas of functional and dysfunctional control systems within McDonalds, what specifications go into developing a control system, quality management techniques and how such tool impacts McDonalds’ employees.

Effective control systems alert managers when something is going wrong and give them time to respond to opportunities and threats. An effective control system has three characteristics: It is flexible enough to allow managers to respond as necessary to unexpected events; it provides accurate information and gives managers a true picture of organizational performance; and it provides managers with the information in a timely manner because making decisions on the basis of outdated information is a recipe for failure. (Jones &George, 2007, pg.287) “The control, process whether at the input, conversion or output stage, can be broken down into four steps: establishing standards of performance, and then measuring, comparing and evaluating actual performance” (Jones & George, 2007, p.219).

McDonalds uses a process called “stock management” and a tool called Weblog to managed their inventory. These are software programs that allow them to control their supply chain. A team is assigned to communicate with the managers of each location on a regular basis to find out local events. “The team builds these factors into the new planning and forecasting system (called Manugistics) to forecast likely demand of finished menu items such as Big Mac” (the times,nd.). This system is also used to maintain waste control and provide information on popular orders. The three types of stock include raw materials, work-in-progress, and the finished product (the times). Raw materials consist of all the supplies from hamburger to straws that are used for the locations. The work-in-progress is where all the raw materials are documented. Finished products are the items that are ready for customers to purchase.

McDonalds previously used a difficult system to manage their inventory. The manager would make a rough estimate of completion percentage of the manufactured products by using the beginning balance of the work in process account is from the prior period's work. Then add the current purchases that are started, but not yet completed, to the work in process account. Then subtract the work that was finished this period for the work in process for recent period. This system was both time consuming and left a lot room for mistakes to occur.

In 2004, McDonald’s introduced a specialist central stock management function known as the Restaurant