mcdonald's supply chain management case study

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

McDonald’s and the Challenges of a Modern Supply Chain

Three lessons.

Recently, McDonald’s, the world’s iconic largest food service provider, has been (forgive the cliché) through the grinder. Poor performance has led to the departure of its CEO and plenty of critical attention in the business pages . Part of this story relates to the provenance, or origins, of its products: Chains that provide more upmarket “fast casual” dining such as Panera, Chipotle, and Shake Shack have brands that speak of freshness, health, and trustworthy sourcing.

• Steve New teaches operations and supply-chain management at the University of Oxford’s Saïd Business School and is a fellow of Hertford College.

Partner Center

Vested pp 119–152 Cite as

McDonald’s Secret Sauce for Supply Chain Success

• Kate Vitasek ,
• Karl Manrodt &
• Jeanne Kling  

248 Accesses

Last but not least. Governance may be the last of the Vested Five Rules, but it is perhaps the most important. Following the first four rules helps you get to a good agreement—but you have to manage it. If you do not manage it well, the consequences are costly. In fact, leading industry research found that poor governance can erode up to 90 percent of anticipated value. 1

None of us is as good as all of us. —Ray Kroc

Download to read the full chapter text

Chapter PDF

Ian R. MacNeil, Contracts: Instruments for Social Cooperation (South Hackensack, NJ: F. B. Rothman, 1968).

Google Scholar  

O. E. Williamson, “Outsourcing: Transaction Cost Economics and Supply Chain Management,” Journal of Supply Chain Management 44, no. 2 (2008): 5–16. Blackwell Publishing Inc. Retrieved from http://doi.wiley.com /10.1111/j.1745-493X.2008.00051.x.

Article   Google Scholar  

John F. Love, McDonald’s: Behind the Golden Arches, rev. ed. (New York: Bantam Books, 1995), relates the widespread practice of the chain restaurant business during the 1950s. It concludes: “Having captive licensees as guaranteed buyers, franchisers needed to do little else than sit back and collect money.”

Peter Eisler, Blake Morrison, and Anthony DeBarros, “Fast-Food Standards for Meat Top Those for School Lunches,” USA Today , December 9, 2009, http://www.usatoday.com /news/education/2009-12-08-school-lunch-standards_N.htm.

Download references

You can also search for this author in PubMed   Google Scholar

Copyright information

© 2012 Kate Vitasek and Karl Manrodt

About this chapter

Cite this chapter.

Vitasek, K., Manrodt, K., Kling, J. (2012). McDonald’s Secret Sauce for Supply Chain Success. In: Vested. Palgrave Macmillan, New York. https://doi.org/10.1007/978-1-137-51190-4_6

Download citation

DOI : https://doi.org/10.1007/978-1-137-51190-4_6

Publisher Name : Palgrave Macmillan, New York

Print ISBN : 978-0-230-34170-8

Online ISBN : 978-1-137-51190-4

eBook Packages : Palgrave History Collection History (R0)

Share this chapter

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Publish with us

Policies and ethics

• Find a journal
• Track your research

About Stanford GSB

• The Leadership
• Dean’s Updates
• School News & History
• Commencement
• Business, Government & Society
• Centers & Institutes
• Center for Entrepreneurial Studies
• Center for Social Innovation
• Stanford Seed

About the Experience

• Learning at Stanford GSB
• Experiential Learning
• Guest Speakers
• Entrepreneurship
• Social Innovation
• Communication
• Life at Stanford GSB
• Collaborative Environment
• Activities & Organizations
• Student Services
• Housing Options
• International Students

Full-Time Degree Programs

• Why Stanford MBA
• Academic Experience
• Financial Aid
• Why Stanford MSx
• Research Fellows Program
• See All Programs

Non-Degree & Certificate Programs

• Executive Education
• Stanford Executive Program
• Programs for Organizations
• The Difference
• Online Programs
• Stanford LEAD
• Seed Transformation Program
• Aspire Program
• Seed Spark Program
• Faculty Profiles
• Academic Areas
• Awards & Honors
• Conferences

Faculty Research

• Publications
• Working Papers
• Case Studies

Research Hub

• Research Labs & Initiatives
• Business Library
• Data, Analytics & Research Computing
• Behavioral Lab

Research Labs

• Cities, Housing & Society Lab
• Golub Capital Social Impact Lab

Research Initiatives

• Corporate Governance Research Initiative
• Corporations and Society Initiative
• Policy and Innovation Initiative
• Rapid Decarbonization Initiative
• Stanford Latino Entrepreneurship Initiative
• Value Chain Innovation Initiative
• Venture Capital Initiative
• Career & Success
• Climate & Sustainability
• Corporate Governance
• Culture & Society
• Finance & Investing
• Government & Politics
• Leadership & Management
• Markets & Trade
• Operations & Logistics
• Opportunity & Access
• Organizational Behavior
• Political Economy
• Social Impact
• Technology & AI
• Opinion & Analysis
• Email Newsletter

Welcome, Alumni

• Communities
• Digital Communities & Tools
• Regional Chapters
• Women’s Programs
• Identity Chapters
• Find Your Reunion
• Career Resources
• Job Search Resources
• Career & Life Transitions
• Programs & Services
• Career Video Library
• Alumni Education
• Research Resources
• Volunteering
• Alumni News
• Class Notes
• Alumni Voices
• Contact Alumni Relations
• Upcoming Events

Admission Events & Information Sessions

• MBA Program
• MSx Program
• PhD Program
• Alumni Events
• All Other Events
• Operations, Information & Technology
• Classical Liberalism
• The Eddie Lunch
• Accounting Summer Camp
• Videos, Code & Data
• California Econometrics Conference
• California Quantitative Marketing PhD Conference
• California School Conference
• China India Insights Conference
• Homo economicus, Evolving
• Political Economics (2023–24)
• Scaling Geologic Storage of CO2 (2023–24)
• A Resilient Pacific: Building Connections, Envisioning Solutions
• Adaptation and Innovation
• Changing Climate
• Civil Society
• Climate Impact Summit
• Climate Science
• Corporate Carbon Disclosures
• Earth’s Seafloor
• Environmental Justice
• Operations and Information Technology
• Organizations
• Sustainability Reporting and Control
• Taking the Pulse of the Planet
• Urban Infrastructure
• Watershed Restoration
• Junior Faculty Workshop on Financial Regulation and Banking
• Ken Singleton Celebration
• Marketing Camp
• Quantitative Marketing PhD Alumni Conference
• Presentations
• Theory and Inference in Accounting Research
• Stanford Closer Look Series
• Quick Guides
• Core Concepts
• Journal Articles
• Glossary of Terms
• Faculty & Staff
• Researchers & Students
• Research Approach
• Charitable Giving
• Financial Health
• Government Services
• Workers & Careers
• Short Course
• Adaptive & Iterative Experimentation
• Incentive Design
• Social Sciences & Behavioral Nudges
• Bandit Experiment Application
• Conferences & Events
• Get Involved
• Reading Materials
• Teaching & Curriculum
• Energy Entrepreneurship
• Faculty & Affiliates
• SOLE Report
• Responsible Supply Chains
• Current Study Usage
• Pre-Registration Information
• Participate in a Study

McDonald's India: Optimizing the French Fries Supply Chain

• Priorities for the GSB's Future
• See the Current DEI Report
• Supporting Data
• Research & Insights
• Share Your Thoughts
• Search Fund Primer
• Affiliated Faculty
• Faculty Advisors
• Louis W. Foster Resource Center
• Defining Social Innovation
• Impact Compass
• Global Health Innovation Insights
• Faculty Affiliates
• Student Awards & Certificates
• Changemakers
• Dean Jonathan Levin
• Dean Garth Saloner
• Dean Robert Joss
• Dean Michael Spence
• Dean Robert Jaedicke
• Dean Rene McPherson
• Dean Arjay Miller
• Dean Ernest Arbuckle
• Dean Jacob Hugh Jackson
• Dean Willard Hotchkiss
• Faculty in Memoriam
• Stanford GSB Firsts
• Certificate & Award Recipients
• Teaching Approach
• Analysis and Measurement of Impact
• The Corporate Entrepreneur: Startup in a Grown-Up Enterprise
• Data-Driven Impact
• Designing Experiments for Impact
• Digital Business Transformation
• The Founder’s Right Hand
• Marketing for Measurable Change
• Product Management
• Public Policy Lab: Financial Challenges Facing US Cities
• Public Policy Lab: Homelessness in California
• Lab Features
• Curricular Integration
• View From The Top
• Formation of New Ventures
• Managing Growing Enterprises
• Startup Garage
• Explore Beyond the Classroom
• Stanford Venture Studio
• Summer Program
• Workshops & Events
• The Five Lenses of Entrepreneurship
• Leadership Labs
• Executive Challenge
• Arbuckle Leadership Fellows Program
• Selection Process
• Training Schedule
• Time Commitment
• Learning Expectations
• Post-Training Opportunities
• Who Should Apply
• Introductory T-Groups
• Leadership for Society Program
• Certificate
• 2023 Awardees
• 2022 Awardees
• 2021 Awardees
• 2020 Awardees
• 2019 Awardees
• 2018 Awardees
• Social Management Immersion Fund
• Stanford Impact Founder Fellowships and Prizes
• Stanford Impact Leader Prizes
• Social Entrepreneurship
• Stanford GSB Impact Fund
• Economic Development
• Energy & Environment
• Stanford GSB Residences
• Environmental Leadership
• Stanford GSB Artwork
• A Closer Look
• California & the Bay Area
• Voices of Stanford GSB
• Business & Beneficial Technology
• Business & Sustainability
• Business & Free Markets
• Business, Government, and Society Forum
• Second Year
• Global Experiences
• JD/MBA Joint Degree
• MA Education/MBA Joint Degree
• MD/MBA Dual Degree
• MPP/MBA Joint Degree
• MS Computer Science/MBA Joint Degree
• MS Electrical Engineering/MBA Joint Degree
• MS Environment and Resources (E-IPER)/MBA Joint Degree
• Academic Calendar
• Clubs & Activities
• LGBTQ+ Students
• Military Veterans
• Minorities & People of Color
• Partners & Families
• Students with Disabilities
• Student Support
• Residential Life
• Student Voices
• MBA Alumni Voices
• A Week in the Life
• Career Support
• Employment Outcomes
• Cost of Attendance
• Knight-Hennessy Scholars Program
• Yellow Ribbon Program
• BOLD Fellows Fund
• Application Process
• Loan Forgiveness
• Contact the Financial Aid Office
• Evaluation Criteria
• GMAT & GRE
• English Language Proficiency
• Personal Information, Activities & Awards
• Professional Experience
• Letters of Recommendation
• Optional Short Answer Questions
• Application Fee
• Reapplication
• Deferred Enrollment
• Joint & Dual Degrees
• Entering Class Profile
• Event Schedule
• Ambassadors
• New & Noteworthy
• Ask a Question
• See Why Stanford MSx
• Is MSx Right for You?
• MSx Stories
• Leadership Development
• Career Advancement
• Career Change
• How You Will Learn
• Admission Events
• Personal Information
• Information for Recommenders
• GMAT, GRE & EA
• English Proficiency Tests
• After You’re Admitted
• Daycare, Schools & Camps
• U.S. Citizens and Permanent Residents
• Requirements
• Requirements: Behavioral
• Requirements: Quantitative
• Requirements: Macro
• Requirements: Micro
• Annual Evaluations
• Field Examination
• Research Activities
• Research Papers
• Dissertation
• Oral Examination
• Current Students
• Education & CV
• International Applicants
• Statement of Purpose
• Reapplicants
• Application Fee Waiver
• Deadline & Decisions
• Job Market Candidates
• Academic Placements
• Stay in Touch
• Faculty Mentors
• Current Fellows
• Standard Track
• Fellowship & Benefits
• Group Enrollment
• Program Formats
• Developing a Program
• Diversity & Inclusion
• Strategic Transformation
• Program Experience
• Contact Client Services
• Campus Experience
• Live Online Experience
• Silicon Valley & Bay Area
• Digital Credentials
• Faculty Spotlights
• Participant Spotlights
• Eligibility
• International Participants
• Stanford Ignite
• Frequently Asked Questions
• Founding Donors
• Location Information
• Participant Profile
• Network Membership
• Program Impact
• Collaborators
• Entrepreneur Profiles
• Company Spotlights
• Seed Transformation Network
• Responsibilities
• Current Coaches
• How to Apply
• Meet the Consultants
• Meet the Interns
• Intern Profiles
• Collaborate
• Research Library
• News & Insights
• Program Contacts
• Databases & Datasets
• Research Guides
• Consultations
• Research Workshops
• Career Research
• Research Data Services
• Course Reserves
• Course Research Guides
• Material Loan Periods
• Fines & Other Charges
• Document Delivery
• Interlibrary Loan
• Equipment Checkout
• Print & Scan
• MBA & MSx Students
• PhD Students
• Other Stanford Students
• Faculty Assistants
• Research Assistants
• Stanford GSB Alumni
• Telling Our Story
• Staff Directory
• Site Registration
• Alumni Directory
• Alumni Email
• Privacy Settings & My Profile
• Success Stories
• The Story of Circles
• Support Women’s Circles
• Stanford Women on Boards Initiative
• Alumnae Spotlights
• Insights & Research
• Industry & Professional
• Entrepreneurial Commitment Group
• Recent Alumni
• Half-Century Club
• Fall Reunions
• Spring Reunions
• MBA 25th Reunion
• Half-Century Club Reunion
• Faculty Lectures
• Ernest C. Arbuckle Award
• Alison Elliott Exceptional Achievement Award
• ENCORE Award
• Excellence in Leadership Award
• John W. Gardner Volunteer Leadership Award
• Robert K. Jaedicke Faculty Award
• Jack McDonald Military Service Appreciation Award
• Jerry I. Porras Latino Leadership Award
• Tapestry Award
• Student & Alumni Events
• Executive Recruiters
• Interviewing
• Land the Perfect Job with LinkedIn
• Negotiating
• Elevator Pitch
• Email Best Practices
• Resumes & Cover Letters
• Self-Assessment
• Whitney Birdwell Ball
• Margaret Brooks
• Bryn Panee Burkhart
• Margaret Chan
• Ricki Frankel
• Peter Gandolfo
• Cindy W. Greig
• Natalie Guillen
• Carly Janson
• Sloan Klein
• Sherri Appel Lassila
• Stuart Meyer
• Tanisha Parrish
• Virginia Roberson
• Philippe Taieb
• Michael Takagawa
• Terra Winston
• Johanna Wise
• Debbie Wolter
• Rebecca Zucker
• Complimentary Coaching
• Changing Careers
• Work-Life Integration
• Career Breaks
• Flexible Work
• Encore Careers
• D&B Hoovers
• Data Axle (ReferenceUSA)
• EBSCO Business Source
• Global Newsstream
• Market Share Reporter
• ProQuest One Business
• Student Clubs
• Entrepreneurial Students
• Stanford GSB Trust
• Alumni Community
• How to Volunteer
• Springboard Sessions
• Consulting Projects
• 2020 – 2029
• 2010 – 2019
• 2000 – 2009
• 1990 – 1999
• 1980 – 1989
• 1970 – 1979
• 1960 – 1969
• 1950 – 1959
• 1940 – 1949
• Service Areas
• ACT History
• ACT Awards Celebration
• ACT Governance Structure
• Building Leadership for ACT
• Individual Leadership Positions
• Leadership Role Overview
• Purpose of the ACT Management Board
• Contact ACT
• Business & Nonprofit Communities
• Reunion Volunteers
• Ways to Give
• Fiscal Year Report
• Business School Fund Leadership Council
• Planned Giving Options
• Planned Giving Benefits
• Planned Gifts and Reunions
• Legacy Partners
• Giving News & Stories
• Giving Deadlines
• Development Staff
• Submit Class Notes
• Class Secretaries
• Board of Directors
• Health Care
• Sustainability
• Class Takeaways
• All Else Equal: Making Better Decisions
• If/Then: Business, Leadership, Society
• Grit & Growth
• Think Fast, Talk Smart
• Spring 2022
• Spring 2021
• Autumn 2020
• Summer 2020
• Winter 2020
• In the Media
• For Journalists
• DCI Fellows
• Other Auditors
• Academic Calendar & Deadlines
• Course Materials
• Entrepreneurial Resources
• Campus Drive Grove
• Campus Drive Lawn
• CEMEX Auditorium
• King Community Court
• Seawell Family Boardroom
• Stanford GSB Bowl
• Stanford Investors Common
• Town Square
• Vidalakis Courtyard
• Vidalakis Dining Hall
• Catering Services
• Policies & Guidelines
• Reservations
• Contact Faculty Recruiting
• Lecturer Positions
• Postdoctoral Positions
• Accommodations
• CMC-Managed Interviews
• Recruiter-Managed Interviews
• Virtual Interviews
• Campus & Virtual
• Search for Candidates
• Think Globally
• Recruiting Calendar
• Recruiting Policies
• Full-Time Employment
• Summer Employment
• Entrepreneurial Summer Program
• Global Management Immersion Experience
• Social-Purpose Summer Internships
• Process Overview
• Project Types
• Client Eligibility Criteria
• Client Screening
• ACT Leadership
• Social Innovation & Nonprofit Management Resources
• Develop Your Organization’s Talent
• Centers & Initiatives
• Student Fellowships

Breaking Down McDonald’s Supply Chain Strategy: A Recipe for Success

Breaking Down McDonald’s Supply Chain Strategy – DFreight

The food supply chain is the process of getting food from producers to consumers, and it has evolved significantly in the digital age. McDonald’s is a significant player in the food supply chain, leveraging technology through its supply chain strategy to become highly efficient and stay competitive. Through partnerships with digital freight forwarders like DFreight, food companies can coordinate shipments, monitor performance, optimize resources, and monetize data analytics. With the help of digital forwarders, they have streamlined their food supply chain and improved their overall efficiency.

In this blog post, we will delve into the critical components of McDonald’s supply chain strategy and explore how it contributes to the company’s overall success.

Table of Contents

McDonald’s and Supply Chain Strategy

McDonald’s  is one of the world’s largest fast-food chains, with a global presence and millions of customers served daily. Understanding its supply chain strategy is essential to comprehend the company’s ability to deliver quality food and maintain customer satisfaction consistently.

A well-designed supply chain strategy is crucial for any successful business, and McDonald’s is no exception. By effectively managing its supply chain, McDonald’s ensures the timely delivery of ingredients, minimizes costs, and maintains product consistency across its vast network of restaurants.

In the previous blogs, we looked into the supply chains of famous and leading companies, which you can read about each of them in the section below.

Navigating the Complexities of McDonald’s Supply Chain

McDonald’s is one of the world’s largest and most successful fast food companies, and a complex and far-reaching supply chain powers its success. From procurement and supplier management to distribution and logistics, technology and innovation to sustainability and ethical practices, and collaboration and partnerships – managing the complexities of its supply chain is no small feat. In the following, we look at the various elements of McDonald’s supply chain and explore how it ensures consistent success.

Procurement and Supplier Management

McDonalds offers a wide range of food products to customers around the world. The company is committed to selecting high-quality suppliers, setting a rigorous quality control and standards, and maintaining strong relationships with suppliers. By understanding their effective supplier management practices, we can gain insights into McDonalds’ commitment to providing excellent customer satisfaction.

1. Sourcing Ingredients and Products

McDonald’s sources a wide range of ingredients and products to create its diverse menu. The company carefully selects suppliers meeting stringent quality and safety standards, from fresh produce to meat, packaging , and condiments. McDonald’s manages its procurement process to ensure a steady supply of high-quality ingredients aligned with its brand values.

2. Supplier Selection and Evaluation

Maintaining strong relationships with suppliers is critical for McDonald’s supply chain. The company selects and evaluates its suppliers based on reliability, capacity, cost-effectiveness, and adherence to ethical practices. Discovering how McDonald’s fosters collaboration and transparency with its suppliers will shed light on its effective supplier management practices.

3. Quality Control and Standards

Ensuring consistent quality across all its restaurants worldwide is a priority for McDonald’s through the rigorous quality control measures implemented by the company, including regular inspections, audits, and certifications. Understanding how McDonald’s maintains high-quality standards will give insights into its commitment to customer satisfaction.

Distribution and Logistics

McDonald’s supreme success in the fast-food industry is due in part to its effective logistical operations. From centralized distribution models to inventory management and transportation strategies, McDonald’s has perfected its supply chain in order to meet customer demand, prevent stockouts, and maintain efficient delivery networks. By exploring how McDonald’s manages distribution and logistics, we can gain insights into their strategic prowess.

1. Centralized Distribution Model

Efficient distribution and logistics play a vital role in McDonald’s supply chain strategy. The company employs a centralized distribution model, allowing for streamlined operations and reduced costs. Understanding how McDonald’s manages the movement of ingredients and products from suppliers to restaurants will provide valuable insights into their logistical prowess.

2. Inventory Management

Maintaining optimal inventory levels is crucial for a fast-food chain like McDonald’s. McDonald’s utilizes advanced inventory management systems to forecast demand, prevent stockouts, and minimize waste. Discovering their inventory management techniques will showcase their ability to achieve operational efficiency and meet customer demand.

3. Transportation and Delivery

Ensuring timely and efficient transportation is essential to deliver fresh food to McDonald’s restaurants. The company manages transportation and delivery logistics, including using dedicated distribution centers, fleet optimization, and route planning. Understanding their transportation strategies will show their ability to operate on a global scale while maintaining consistency and quality.

Technology and Innovation

McDonald’s is renowned for its commitment to innovation and efficiency in its supply chain operations. By leveraging advanced digital solutions, automation technologies, and data analytics, the company is able to optimize their operations and ensure customer satisfaction at all stages of the supply chain.

1. Digital Supply Chain Solutions

In today’s digital age, technology plays a vital role in supply chain management. McDonald’s leverages digital solutions such as order management systems, real-time tracking, and data analytics to optimize their supply chain. Exploring their use of technology will highlight their commitment to innovation and efficiency.

2. Automation and Robotics

Automation and robotics have revolutionized supply chain operations across industries. McDonald’s is no exception, utilizing automation technologies in various supply chain stages. Automation and robotics enhance efficiency, reduce costs, and ensure food preparation and packaging consistency.

3. Data Analytics and Forecasting

Accurate demand forecasting is critical for McDonald’s to manage inventory, minimize waste, and meet customer expectations. The company utilizes data analytics, machine learning in logistics , and predictive modeling to forecast demand, optimize supply chain operations, and drive business growth. Understanding their data-driven approach will showcase their ability to adapt to changing consumer preferences.

Sustainability and Ethical Practices

McDonald’s has committed to sustainable sourcing, environmental impact reduction, and labor and social responsibility as core principles of its supply chain management strategy. These initiatives demonstrate the company’s commitment to protecting the environment and providing safe and ethical working conditions for those involved in their supply chain.

1. Sustainable Sourcing Initiatives

Sustainability is an increasingly important aspect of supply chain management, and McDonald’s recognizes the significance of minimizing its environmental footprint. The company’s sustainable sourcing initiatives include responsible agricultural practices, support for local farmers, and commitment to certified sustainable ingredients. Discovering McDonald’s efforts toward sustainability will highlight its dedication to protecting the planet.

2. Environmental Impact Reduction

McDonald’s understands the importance of reducing its environmental impact. The company implements measures to minimize waste generation, optimize packaging materials, and promote recycling and energy efficiency across its supply chain. Exploring their environmental initiatives will showcase their commitment to operating in an environmentally responsible manner.

3. Labor and Social Responsibility

McDonald’s supply chain strategy also focuses on labor and social responsibility. The company ensures fair and ethical treatment of workers throughout its supply chain, including supplier factories and farms. Understanding their commitment to labor rights and social responsibility will show their dedication to creating a positive impact beyond just business operations.

Collaboration and Partnerships

McDonald’s has built their successful supply chain on the basis of fostering strong collaborations and partnerships with franchisees, suppliers, stakeholders, and communities. From engaging stakeholders, to working closely with suppliers on production and demand, to working with franchisees to support their success, McDonald’s exemplifies an ideal model of successful collaboration and partnership.

1. Franchisee Relationships

McDonald’s operates on a franchise model, which requires strong collaboration and partnerships with its franchisees. The company fosters franchisee relationships, including supply chain collaboration, training programs, and shared goals. Exploring their collaborative approach will showcase the importance of a cohesive network in executing McDonald’s supply chain strategy.

2. Collaborative Planning with Suppliers

Collaborative planning with suppliers is crucial to McDonald’s supply chain strategy. The company works closely with suppliers to optimize production schedules, manage demand fluctuations, and drive continuous improvement. Understanding their collaborative planning processes will provide insights into their ability to adapt to market dynamics and ensure smooth operations.

3. Engaging Stakeholders

Engaging stakeholders is essential for the success of any supply chain strategy. McDonald’s recognizes the significance of fostering positive relationships with various stakeholders, including suppliers, customers, employees, and communities. The company actively engages stakeholders through transparent communication, social initiatives, and community partnerships. Discovering their stakeholder engagement practices will showcase their commitment to building strong relationships beyond the traditional supply chain.

Challenges and Future Trends

The global supply chain landscape is becoming increasingly complex as companies face new challenges due to changing consumer preferences, geopolitical risks, and technological advancements. McDonald’s is no exception to this complexity and has to navigate these issues while adapting their supply chain strategy to an ever-evolving market.

1 . Global Supply Chain Complexity

Operating a global supply chain comes with its fair share of challenges. McDonald’s faces complexities, including managing diverse regulations, cultural differences, and geopolitical risks. The company tackles these challenges and adapts to the evolving global landscape.

2 . Changing Consumer Preferences

Consumer preferences and trends constantly evolve, presenting challenges and opportunities for McDonald’s supply chain strategy. The company navigates changing consumer demands, including the rise of healthier food options, customization, and digitalization. Understanding their approach to consumer preferences will highlight their agility in adapting to market shifts.

3 . Technological Advancements and Adaptation

The supply chain industry is experiencing rapid technological advancements. We will explore how McDonald’s embraces emerging technologies such as blockchain , the Internet of Things (IoT) , and artificial intelligence (AI) to enhance their supply chain operations. Discovering their technological adaptations will showcase their ability to stay at the forefront of innovation.

Streamline Your Food Supply Chain with DFreight

Harness the power of digital freight forwarder DFreight and its online platform and mobile app to improve overall efficiency, reduce risk, and enhance traceability in your food supply chain. With DFreight, you can quickly access accurate and up-to-date product and shipment information to ensure your food deliveries arrive on time, every time. Unlock the potential of your food supply chain and take the hassle out of transporting food with DFreight today.

What factors should I consider when selecting a food provider for my supply chain?

When selecting a food provider for your supply chain, you should consider the provider’s quality standards, sustainability practices, transportation capabilities, pricing, customer service and availability. Additionally, be sure to evaluate their ability to meet your order requirements in a timely manner.

How can I improve the efficiency of my food supply chain?

You can improve the efficiency of your food supply chain by leveraging digital freight forwarding services to streamline the ordering and delivery process, monitor transportation processes, track inventories, and forge partnerships with suppliers for better food availability. Additionally, digital freight forwarding enables businesses to access lower-cost, more reliable transport options while optimizing supply chain visibility and control.

How is McDonald’s supply chain structured?

At the top of McDonald’s supply chain is an international network of strategic partnerships with various suppliers that are responsible for providing raw ingredients such as beef, potatoes, and eggs, as well as other finished products. Products are typically sent to McDonald’s regional distribution centers, which then send the products to franchised locations.

How does McDonald’s ensure food safety in their supply chain?

McDonald’s ensures food safety in its supply chain by evaluating food vendors and partners, maintaining strict food safety protocols and testing, and conducting regular quality and safety inspections. Additionally, the company has a traceability system to guarantee accountability and transparency when sourcing, manufacturing, and preparing foods.

What steps has McDonald’s taken to improve its supply chain strategy?

McDonald’s has taken a number of steps to improve its supply chain strategy, including expanding its use of third-party logistics providers, implementing automated ordering and delivery systems, partnering with suppliers to reduce waste, and leveraging new technologies to optimize operations.

Air transportation is a convenient and fast way to move cargo and is suitable for small and large companies as well as individuals. You Might Also Like

Commodities

Most Popular

The Amazing Supply Chain of McDonald’s: A case study

Most people know Mcdonald’s as a fast food restaurant, but not many people know about the fantastic supply chain managemen t that keeps it running. This blog post will explore how McDonald’s manages its supply chain. You will also learn how this ties in with online management courses offered by IIM Kozhikode . Here are critical strategies behind McDonald’s supply chain and how it contributes to creating one of the world’s most popular fast food chains.

The Strategy Behind McDonald’s Supply Chain Success

McDonald’s has long been hailed as a supply chain management success story. The company’s supply chain is a well-oiled machine that efficiently delivers burgers and fries to its customers around the globe. McDonald’s has achieved this success through careful strategic planning and execution. Here are two critical insights behind their supply chain:

Optimizing Relationships with Suppliers in the Long Term

In order to have a successful business, it is essential to have positive relationships with your suppliers. By optimising these relationships, you can ensure that you are getting the best possible products and services from your vendors, which can, in turn, help improve your bottom line. McDonald’s did this successfully by offering value to its long-term suppliers to ensure that both grow together mutually, making it a staple part of supply chain management . This differs from traditional supply chain models, wherein the two parties exchange values. 

For instance, The Martin-Brower Company has been supplying napkins to McDonald’s restaurants since 1956. What started as a simple partnership with one restaurant in Des Plaines, Iowa, is now a super-beneficial long-term partnership as the company now supplies napkins to over 15,000 McDonald’s restaurants all across North America.

Full Control of Supply Chain via Vertical Integration

McDonald’s has been studied intensively in supply chain management courses and has vertically integrated its supply chain since the early 1990s. By owning more supply chain elements, McDonald’s has more control over its product quality and cost. By owning livestock farms, McDonald’s can better control its beef patties. And by operating its own distribution centres, McDonald’s can deliver food to restaurants faster and at a lower cost.

Vertical integration has helped McDonald’s keep a tight grip on its costs. By controlling more of the supply chain, McDonald’s can reduce waste and inefficiencies. For example, by owning livestock farms, McDonald’s can avoid the volatility of meat prices. 

Therefore, the company is now involved in almost all stages of the supply chain instead of traditional restaurants, wherein the eatery is only the tip of the chain. Looking at its success, it’s no surprise that their case study is an integral part of many online management courses .

Future Supply Chain Plans For McDonald’s

As the world’s largest restaurant chain, McDonald’s constantly innovates its supply chain to keep up with customer demand. The company plans to further streamline its supply chain in the future to provide even faster service and fresher food. Here are two ways the fast-food giant is planning to achieve the same:

Pledging Towards Sustainability

The fast food industry has been under immense pressure to become more sustainable in recent years. One of the most iconic brands in fast food, McDonald’s, has made huge strides in this area in recent years. In 2015, they set a goal to source all their fibre-based packaging from recycled or certified sources by 2025. They’ve also pledged to reduce their greenhouse gas emissions by 2030 as per the 1.5°C climate scenario pathway for their supplier, restaurants and offices. To ensure this, the company has partnered with a few reputable environmental organisations, such as the Forest Stewardship Council (FSC) and the Program for the Endorsement of Forest Certification (PEFC).

Integrating Drive-Thru With AI

In recent years, McDonald’s has been working on integrating artificial intelligence (AI) into its drive-thru experience. The goal is to provide customers with a more personalised experience and increase accuracy and efficiency. McDonald’s promises this innovation by partnering with an Israel-based AI company known as Dynamic Yield. Apart from better automation, AI will also increase the accuracy of real-time suggestions by analyzing the past ordering trends of its customers. McDonald’s is also testing AI-enabled ordering kiosks in the US. So far, McDonald’s has found that AI can help improve orders’ accuracy and reduce waiting times. The company is still working on ways to use AI to further personalize the customer experience.

How Can Advanced Supply Chain Management and Role of Analytics Program Offer Similar Insights?

Advanced supply chain management and analytics program, offered by IIM Kozhikode can offer similar insights into how a company operates. With ever-changing industrial trends, it is vital to remain on top of supply chain management , as it impacts customer satisfaction as well as the profit margins of an organisation. Thus, by using the latest technologies to leverage supply chains, like McDonald’s has done and continues to do, you can take away key insights to boost any organisation’s supply chain. This online management course does this by integrating basics such as what is supply chain management with various analytic tools such as Descriptive Analysis, Cognitive Analysis, Prescriptive Analysis, and more.

The McDonald’s supply chain is indeed a fascinating and well-oiled machine. From the humble beginnings of one man’s fast food restaurant to a global empire supplying millions of customers daily, the supply chain has had to adapt and evolve to meet the demands of a growing business. By joining the Advanced Supply Chain Management and Role of Analytics Program offered by IIM Kozhikode , you can also learn key industrial insights on supply chain management .

Fill the form to get more information.

• I agree to the Terms and Conditions of this website.
• I agree to be contacted by Jaro Education representatives for information about programs and courses.
• I agree for Jaro Education to send me offers and promotional materials.

Popular courses

Admission open.

Executive Programme in Healthcare for Industry 5.0 Programme by CEP, IIT Delhi

• Duration: 6 Months
• Application Closure Date: 25th June 2024

Executive Development Program in HR Analytics – XLRI Jamshedpur

• Application Closure Date: 21st April 2024

Executive Programme in Full Stack Web Development – IITM Pravartak Technology Innovation Hub of IIT Madras

• Duration: 10-11 Months
• Application Closure Date: Coming Soon

Long Duration Certification Programs

• Accelerated General Management Programme - IIM Ahmedabad
• Advanced Strategy for Products and Marketing & Advanced Analytics for Products and Marketing- IIM Kozhikode
• Professional Certificate Programme in Investment Banking - IIM Kozhikode
• Executive General Management Programme - IIM Trichy
• PG Certification Program in Business Analytics & Application- IIM Trichy
• PG Certificate in Cyber Security- IIT Palakkad
• Executive Program in Business Management-IMT Ghaziabad
• PG Certificate Programme in Fintech- IIM Nagpur
• Adani Institute of Digital Technology & Management Ahmedabad-Executive Program in Business Analytics

Online Bachelors Degree Programs

• Online BCA - Manipal University, Jaipur
• Online BBA- Manipal University, Jaipur
• Online BBA Degree Program-Dr D. Y. Patil Vidyapeeth Pune
• Online B.Com- Manipal University, Jaipur

Doctoral Programs

• Doctor Of Business Administration (DBA)-Swiss School of Management Switzerland

Online Masters Degree and PG Programs

• Online MBA- Manipal University, Jaipur
• Online MBA Degree Programme-Dr D. Y. Patil Vidyapeeth Pune
• Executive MBA-Dayanand Sagar University Bangalore
• PGDM Hybrid-WeSchool, Mumbai

Trending Programs

• Doctorate & Phd Courses
• Online MBA Courses
• Online PG Programs
• Online UG Programs
• Finance Programs
• International Programs
• Analytics & Data Science Programs
• Management & Leadership Programs

Short Duration Certification Programs

• Future Leader Program- Deakin University Australia and KPMG in India
• Executive Program in Business Finance - IIM Ahmedabad
• Certification in Corporate Finance & Analytics- KPMG in India

Fulltime Masters and PG Programs

• MBA Program in Real Estate - Niranjan Hiranandani School of Real Estate - HSNC University
• About Jaro Education
• Student Grievance Redressal
• Terms of Use

Trending PG & UG Programs

• Online Mcom
• Online Bcom

In-Demand MBA Courses

• MBA in Finance
• MBA in Marketing
• MBA in Human Resource Management
• MBA in Systems & Operations
• MBA Project Management
• MBA in Business Analytics

Copyright © 2022 Jaro Education. All rights reserved.

Coming Soon

• Technical Support
• Find My Rep

You are here

Supply chain management case study 2.

• Case 2: McDonald’s Reinvents Itself Again

Share this activity with your students by simply copying and pasting the URL for this page into your LMS.   

• Time frame: Approximately 30 Minutes
• Setting : Online or face-to-face
• Source : Chapter 6 Demand Management and Customer Service from  Supply Chain Management   by Ray R. Venkataraman and Ozgun C. Demirag
• Recognize the factors that affect demand management. 
• Discuss the various issues to be addressed in managing consumer demand. 
• Discuss the importance of sustainability in the context of customer service.

Imagine yourself working as a business advisor for McDonalds

McDonald’s has never been content to sit back and wait for consumer tastes to change around it. Rather, the company continues to do what it can to shape the face of fast food and influence the marketplace with new offerings and other changes. In recent years, however, the drive by McDonald’s to reinvent itself has risen to another level in the face of stiff competition from healthier alternatives (Subway) and a general feeling by the public that major fast-food companies are not much different from one another in terms of their prices, quality, service levels, and product offerings. 

When fast food seemed synonymous with “greasy,” “overcooked,” and “fried,” McDonald’s changed things up with their healthy options menu, including wraps, grilled options instead of the production line fried foods, fresh fruit, and yogurt-based smoothies. These menu changes were doubly effective: They allowed McDonald’s to compete directly with other stores that promoted healthy alternatives, like Subway, and they took some of the rhetorical wind out of the sails of their harshest critics, including the San Francisco Board of Supervisors, who, in 2011, banned the inclusion of a toy in McDonald's Happy Meals®, claiming that the “pester power” of children could induce parents to buy these unhealthy lunch choices. McDonald’s response was twofold: Offer healthy options like milk and apple slices in Happy Meals®, and instead of eliminating the toys, McDonald’s charged 10 cents for the addition of a toy, with the proceeds benefiting the Ronald McDonald House. 

McDonald’s continues to set the pace in the fast-food industry. When competitors offer their own healthy menus, they are often seen as simply copying and therefore acknowledging the prescience of McDonald's in staying ahead of the consumer trend curve. The fast-food industry has been the butt of jokes and held up to general disapproval for a number of years due to charges that it offers increasingly poor choices to patrons who don’t know any better. Unlike some competitors who seem content to keep their menus unchanged and their products unhealthy, McDonald’s has been doing what is necessary to change who they are, reinvent themselves, and keep their fingers firmly on the pulse of their international customer base.

Recently, McDonald’s has been focusing on investing in technology to drive sales growth, especially in the area of digital sales. The company has been installing digital self-order kiosks in their restaurants and expanding food delivery. McDonald’s has also been ramping up its tech-focused investments. In 2019 alone, the company acquired Apprente, a Silicon Valley company using artificial intelligence to automate drive-thru orders, and Dynamic Yield, a company that specializes in decision logic technology. CEO Chris Kempczinski emphasizes the importance of technology shaping the company’s strategy in 2020 and beyond: “Digital is transforming global retail, and it will transform McDonald’s.

Share Your Insights

• In your opinion, what is the future of fast food around the world? Are consumer taste changes and concerns about healthy eating likely to diminish the demand for fast food? 
• How would you evaluate the reinvention strategy used by McDonald's? Do the changes represent a fundamental shift in the company’s competitive model, or are they cosmetic? 
• If McDonald’s hired you to advise it with regard to future trends and the changes it should consider, what would you suggest? Defend your suggestions. 
• Research the current state of McDonald’s. What are the areas in which the company plans to reinvent itself in the coming years, particularly in light of the appointment of its new CEO, Chris Kempczinski (November 2019), and the COVID-19 pandemic?

Learn more about Supply Chain Management :

Supply Chain Management

• Case 1: Rising Health Care Costs
• College Publishing Offerings
• Digital Solutions for Your Course
• Research Methods, Statistics, and Evaluation Catalog
• Sign up to receive new content alerts and special offers

• Case Details
• Case Intro 1
• Case Intro 2

» Operations Case Studies » Case Studies Collection » ICMR HOME » Operations Short Case Studies » View Detailed Pricing Info » How To Order This Case » Business Case Studies » Case Studies by Area » Case Studies by Industry » Case Studies by Company

» Benefits reaped by McDonald's because of its supply chain

McDonald's Food Chain - Next Page>>

Case Studies Links:- Case Studies , Short Case Studies , Simplified Case Studies . Other Case Studies:- Multimedia Case Studies , Cases in Other Languages . Business Reports Link:- Business Reports . Books:- Text Books , Work Books , Case Study Volumes .

McDonald’s Supply Chain Issues – a Case Study on Supply and Demand Analysis

Is there a more iconic symbol of American culture than McDonald’s?

The fast-food industry has shaped the modern lifestyle, not only in the USA. McDonald’s Corporation is present in over 100 countries and has more than 1.7 million employees. There are a lot of helpful business lessons a student can learn from doing the McDonald’s case study .

• 🍔 McDonald’s Supply Chain
• 🥬 Case Study Ideas
• 🚚 Supply and Demand Analysis
• 📈 Supply Analysis
• 💊 Supply Chain Issues
• 📚 Demand Analysis
• 👍 McDonald’s Case Study – 30 Best Examples

🔗 References

🍔5 facts about mcdonald’s supply chain.

• A new McDonald’s opens nearly every 14.5 hours . McDonald’s supply chain management made the company the number one fast-food chain globally.
• McDonald’s has one of the best supply chains in the world . In 2016, it was ranked the second-best in the Top Supply Chains by Gartner.
• McDonald’s uses The Three-Legged Stool approach for franchising . The company’s founder Ray Kroc designed this method: the first leg is McDonald’s employees, the second is the franchise owners, and the third is the suppliers.
• Products are transported to McDonald’s restaurants by special cars . They are equipped with innovative temperature-control mechanisms. Check out our free essay samples to learn more about McDonald’s supply chain.

🥬 McDonald’s Case Study – Fresh Ideas

Various factors contribute to McDonald’s successful financial performance. Here’re some ideas to consider when doing the McDonald’s case study.

• Corporate culture.
• Vertical integration of the supply chain.
• International menu variations.
• McDonald’s inventory management system.
• Storage and distribution systems.
• Marketing principles.
• Recruitment practices at McDonald’s.
• Suppliers’ code.
• McDonald’s largest suppliers.
• The SWOT analysis .

🚚 McDonald’s Supply and Demand Analysis

• McDonald’s supply chain overview McDonald’s outsources 100% of its supply needs. The company grows its products through contracted producers and transports its own goods. McDonald’s supply chain promotes growth not only for the restaurants but also for the suppliers.
• McDonald’s consumers’ demands Most customers expect quick and simple ordering from McDonald’s restaurants. Having failed the experiment with pizza in the 1990s , McDonald’s has stuck to hamburgers, cheeseburgers, and French fries on the menu.
• McDonald’s model is a win-win relationship between the company, the suppliers, and the customers.
• Instead of looking for suppliers that offer the best price, McDonald’s maintains long-term relationships with existing ones.
• McDonald’s does not micromanage business partners in its business model.

📈 McDonald’s Supply Chain Case Study

• McDonald’s supply chain: sustainability McDonald’s aims to use natural resources to contribute to protecting the environment. One of the significant steps in this process is utilizing nature-positive supply chains. While trying to reduce their impact on nature, the company also develops a more sustainable global economy.
• McDonald’s supply chain: economics McDonald’s works with its suppliers to research and share the best practices to increase productivity and financial performance. The company aims to reduce hunger and provide decent jobs to its suppliers worldwide.
• McDonald’s supply chain: food safety Food safety is a serious responsibility of McDonald’s. To help with this, suppliers have special programs allowing them to track food in the supply chain. Moreover, McDonald’s approaches a Food Safety Advisory Council to educate its employees about food safety.

💊 McDonald’s Supply Chain Issues

• McDonald’s switching from frozen to fresh burgers Since 2012, McDonald’s has lost 500 million restaurant visits as customers have chosen more fast-casual alternatives that provide fresh burgers. For that reason, in 2018, the company announced that it was switching to fresh patties instead of frozen in its burgers at 300 U.S. restaurants.
• McDonald’s supply chain issues due to Covid-19 In 2021, McDonald’s lacked some bottled drinks across its 1,250 restaurants in Great Britain. This happened because of a shortage of lorry drivers due to Covid-19 restrictions and self-isolation rules.
• McDonald’s supply chain disruptions Supply chain disruptions can significantly impact McDonald’s financial performance and reputation. To reduce the negative impact, McDonald’s has multiple supply backup sources. McDonald’s has tested and trustworthy suppliers ready to help if a disruption occurs.

📚 McDonald’s Demand Analysis

• Menu and burgers at McDonald’s McDonald’s used to make the tastiest hamburgers in America. However, this award today goes to other fast-food restaurants, such as Shake Shack . To win back customers, McDonald’s needs to focus on improving the quality of its core products.
• Lower prices at McDonald’s McDonald’s customers are unwilling to spend more than $5 on a hamburger. McDonald’s has a simplified menu and self-serve ordering system to lower its prices. It is important to notice that organic food and high quality are not the first things consumers want from McDonald’s.
• Customer service at McDonald’s McDonald’s employees’ essential quality is having a passion for people. McDonald’s adopts a multi-channel communication system to ensure that all its messages from the customers are delivered to staff. McDonald’s collects feedback and complaints on its website to identify factors affecting the demand .

👍 McDonald’s Case Study – 27 Best Examples

Mcdonald’s supply chain issues.

• Food industry: McDonald’s company . This essay investigates McDonald’s price elasticity of demand for its goods and services and its supply chain.
• Mcdonald’s vs. Wal-Mart’s Strategic Choices . This paper compares the two successful American companies and their supply chains.
• McDonald’s organization: operation management . This report focuses on the key concepts of McDonald’s operations management, including supply chain management.
• Mcdonald’s entering Estonia case analysis . This study investigates how McDonald’s can enter the Estonian market successfully and build a trustworthy relationship with local suppliers.
• An external and internal analysis of McDonald’s Corporation . This paper conducts an external and internal analysis of McDonald’s Corporation and evaluates its supply chain management.
• Quality management in McDonald’s restaurant . This essay analyses the measures McDonald’s uses to ensure that all supply chain operations occur safely.
• Business strategy analysis of Mcdonald’s . This paper explores how McDonald’s supply chain supports its operations worldwide.
• McDonald’s and Wendy’s International Inc . This report focuses on the management, suppliers, and customers of the two competing companies— McDonald’s and Wendy’s.
• McDonald’s, Starbucks, and American International Group . This paper compares three selected public companies, focusing on their financial performances and supply chains.

McDonald’s Marketing Strategies & Advertisement Campaign

• McDonald’s and Coca-Cola ads in the Russian market . This essay explores McDonald’s and Coca-Cola’s ads’ impact on the Russian audience.
• Marketing analysis: McDonald’s company. This study explores McDonald’s marketing approach to maintaining the balance between price and quality.
• McDonald’s marketing strategies in the UAE. The report analyzes the marketing strategies of McDonald’s, as well as market descriptions and segments of the company in the UAE.
• McDonald’s company’s marketing strategies . This report presents an analysis of the internal and external environments of McDonald’s and reviews its marketing mix.
• McDonald’s company marketing practices and strategies . This paper looks at the most suitable market entry strategies McDonald’s can use to continue expanding to the international market.
• Business ethics and Social Corporate Responsibility for McDonald’s . This essay investigates how McDonald’s CRS policy contributes to the company’s marketing success.

McDonald’s Human Resource Management & Employment

• McDonald’s business principles: employment violations . This essay concerns the problem of the company’s ethics strategy and how McDonald’s tries to fix it.
• McDonald’s strategic management of human resources & innovation . This research contains an overview of McDonald’s human resource management and suggests how it can be improved.
• McDonald’s human resources management practice . This paper explores McDonald’s human resource management and its strengths and weaknesses.
• McDonald’s company: human resource functions. This research focuses on McDonald’s human resource issues.
• McDonald’s company H.R. management practices . This essay aims to demonstrate how McDonald’s efficient H.R. management practices benefit the company’s financial performance.
• McDonald’s Corporation’s talent management program . This paper provides details on McDonald’s successful talent management program.

Mcdonald’s Financial Performance & Market Influence

• McDonald’s company case analysis . This paper aims to assess the effects of McDonald’s operations strategy and its different perspectives on the company’s financial success.
• McDonald’s Corporation’s five forces analysis. This essay focuses on the five internal and external factors influencing McDonald’s performance.
• Microsoft Corporation and McDonald’s corporation: financial performance . This paper compares Microsoft Corporation and McDonald’s Corporation’s financial performance.
• McDonald’s accounting information system . This paper examines the accounting information systems at McDonald’s.
• McDonald’s company’s strategic management. This essay investigates how McDonald’s strategic decisions influence the company’s financial performance.
• Comparative financial statements of McDonald’s. This writing analyzes the financial aspects of McDonald’s over the recent years.
• Best Items on McDonald’s All Day Breakfast Menu – Business Insider
• The Supply Chain: From Raw Materials to Order Fulfillment – Investopedia
• 2022: Supply chains will face many challenges this year | World Economic Forum
• McDonald’s Is Using AI and Data to Optimize Its Supply Chain
• Demand and Supply Planning for a Large Fast Food Chain – AnyLogic Simulation Software

Descriptive Essay Topics: Examples, Outline, & More

371 fun argumentative essay topics for 2024.

Asking the better questions that unlock new answers to the working world's most complex issues.

Trending topics

AI insights

EY podcasts

EY webcasts

Operations leaders

Technology leaders

Marketing and growth leaders

Cybersecurity and privacy leaders

Risk leaders

EY Center for Board Matters

EY helps clients create long-term value for all stakeholders. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate.

Artificial Intelligence (AI)

Strategy, transaction and transformation consulting

Technology transformation

Tax function operations

Climate change and sustainability services

EY Ecosystems

Supply chain and operations

EY Partner Ecosystem

Explore Services

We bring together extraordinary people, like you, to build a better working world.

Experienced professionals

MBA and advanced-degree students

Student and entry level programs

Contract workers

EY-Parthenon careers

Discover how EY insights and services are helping to reframe the future of your industry.

Case studies

Energy and resources

How data analytics can strengthen supply chain performance

13-Jul-2023 Ben Williams

How Takeda harnessed the power of the metaverse for positive human impact

26-Jun-2023 Edwina Fitzmaurice

Banking and Capital Markets

How cutting back infused higher quality in transaction monitoring

11-Jul-2023 Ron V. Giammarco

At EY, our purpose is building a better working world. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets.

EY is now carbon negative

19-Sep-2022 Carmine Di Sibio

Our commitment to audit quality

13-Nov-2023 Julie A. Boland

No results have been found

Recent Searches

BEPS 2.0: as policies evolve, engagement is key

It remains to be seen whether the US will align its tax law with the OECD/G20’s global BEPS 2.0 rules. MNEs will feel the impact in 2024. Learn more.

How GenAI strategy can transform innovation

Companies considering or investing in a transformative GenAI strategy should tie generative artificial intelligence use cases to revenue, cost and expense. Learn more

Top five private equity trends for 2024

Read about the five key trends private equity firms will emphasize in 2024 as they create value

Select your location

close expand_more

How supply chain helps an electronics manufacturer connect customers

A global electronics company diversifies its manufacturing locations to increase its supply chain resilience.

• 1. Better question
• 2. Better answer
• 3. Better working world

How EY can help

The better the question

How can a supply chain deliver electronic devices on demand?

A US-based electronics manufacturer reduces supply chain risk to keep its customers tuned to all the right channels.

Explore our Offerings

Supply Chain & Operations Consulting Services

Discover how EY's supply chain team can help your business redefine its end-to-end supply chain and operations to support your enterprise objectives.

The electronics industry is facing steep supply chain challenges, reaching all the way back to the raw materials that make up those tiny components keeping people connected in real time. 

A leading electronics supplier that provides mobile devices to consumers and public entities was experiencing shortfalls due to overreliance on materials and manufacturing in Asia. A perfect storm of factors, including the COVID-19 global pandemic and widespread geopolitical instability, has weakened the global supply chain, and cross-border labor is no longer guaranteed.  

Transportation delays, both in the air and on the water, are extending production lead times. Country-specific tax and trade regulations are also threatening shipping timelines and slowing product delivery dates for customers.   

“Corporate leaders at this electronic device company recognized that supply chain resilience has become an urgent business imperative for their organization,” said Jim Morton, Executive Director for the Ernst & Young LLP Business Consulting supply chain practice. “With most of their customer base in the US, they recognized that they needed to diversify their sourcing and production options as effectively as possible, which meant varying manufacturing locations to complement their global portfolio.” 

Leaders engaged an integrated EY team experienced in   supply chain modeling and optimization , tax and trade. The team developed a comprehensive plan that would diversify manufacturing and alleviate the organization’s long-term supply chain risk. 

EY teams’ extensive tax experience, deep understanding of global incentives and locations, and keen geopolitical business perspective showed the client how it can continue to help consumers access critical mobile devices and carve a sustainable new path forward for its business.

Diversified manufacturing locations reduce supply chain risk

An integrated digital model evaluates multiple operation sites to yield informed decisions.

Geostrategic Business Group

Our Geostrategic Business Group (GBG) can help your business translate geopolitical insights into business strategy to manage political risk. Find out how.

With its deepest manufacturing roots in Asia, the mobile device provider needed to diversify its production footprint. Supply chain disruptions, longer ocean transport times, region-specific trade restrictions and frequent unexpected delays were pushing leaders to consider adding manufacturing sites closer to the US – the location of their corporate headquarters and most of their customer base. 

Research from EY teams shows that 64% of companies have re-shored some elements to improve sustainability. In addition, 42% of companies said that ensuring sustainable and diverse sourcing was a priority. With data such as these in mind, the company turned to an EY cross-practice team for a strategy to augment core operations in more accessible and stable locations, reducing its overall supply chain risk while maintaining existing operations in Asia and elsewhere. Faced with a daunting and costly business decision, leaders needed assurance they could diversify their manufacturing and still procure the right materials, maintain quality standards, and deliver reliable products to meet urgent user needs.  

The EY team assessed and designed a more diverse supply chain network with the company’s global business in mind.

Supply chain optimization was done based on a computerized model to assess the global supply chain, mapping raw materials to flow of goods, to distribution centers and finally to customer locations. The model evaluated current networks against future state options, assessing millions of site variables rapidly to provide leadership with the informed perspective they needed. The EY digital model brought an integrated view of the tax considerations inherent in ramping up manufacturing in new sites and countries, including customs duties, direct and indirect tax implications and country-specific regulations. The EY Geostrategic Business Group provided clarity around government labor, trade policies and local laws to further optimize recommendations, blending speed and cost to enable on-demand inventory.

"With recent supply chain disruption, trade wars and geopolitical uncertainty, this global electronics leader needed an integrated supply chain model so they could successfully diversify their manufacturing portfolio, avoid production delays, and address country-specific issues,” said Morton. “The EY supply chain optimization model helped them make more informed decisions and select their new manufacturing site in North America.” 

End-to-end supply chain analysis was conducted by tracking the company’s highest-priority devices. Validated data inputs were primed and transitioned from a flow-constrained model to a demand-driven model. The analysis evaluated economic value added with the future state footprint, insourcing vs. outsourcing manufacturing operations, tax considerations, skilled labor availability, geopolitical factors, ESG and carbon footprint impact, and the reduction of supply chain complexity.

A supply chain scorecard was created by the EY team to help leaders evaluate manufacturing sites more critically, assessing six key supply chain factors:

Using the information gathered by the EY scorecard and digital assessment tools, the electronics company was able to ultimately select a new near shore location as its next manufacturing site. With this new location identified, EY teams will now work with the client to build out a roadmap to ramp up operations – including manufacturing providers, tax implications, geopolitical and regulatory guidance.  

The better the world works

Supply chain optimization keeps customers connected around the world

The forward-thinking EY supply chain model diversifies production and minimizes risk.

For a leading electronics provider that serves millions of customers around the world, keeping the organization’s supply chain operating smoothly is of paramount importance. Comprehensive EY supply chain modeling and optimization for this organization was designed with a future state supply chain in mind, so that the organization could vary its manufacturing portfolio, maintain current production quotas, mitigate risk and reduce excess product inventory by 27%.

The EY digital supply chain optimization model helped the electronics leader assess site locations across countries, geopolitical factors, trade implications, trade risk and tax regulations. The manufacturing site scorecard helped the company narrow down possible manufacturing sites and identify specific locations within countries that will help the organization further reduce their carbon emissions by 15%. The supply chain solution will also increase the organization’s efficiency by reducing the length of haul from production site to customer by 50%, and by lowering labor costs.  

 “Our integrated supply chain model, which included extensive tax experience and deep geopolitical business perspective across locations, provided this electronics powerhouse a solution that would help them diversify and de-risk their supply chain, allowing important communication devices to continue to be readily available worldwide,” said Morton.  

As the company works to ramp up its newest manufacturing location in North America, EY teams will be on board to help it conduct continued geopolitical and tax analysis, develop end-to-end supply chain analysis, establish timing, and evaluate distribution footprint expansion.

• 50% reduction in the average length of haul from production to consumer
• 27% reduction of excess product inventory in the pipeline
• 15% reduction in future carbon emissions impact from transport 
• Lower duty costs on products imported from the near shore location
• Potential cost savings gained from business incentives provided by the near shore location

EY OpsChain Contract Management Solution

Discover how EY's OpsChain Contract Management Solution can help your TMT business boost speed, visibility and trust along your digital value chain. Learn more.

Related topics

Glenn Steinberg

Helping companies transform, create value and optimize business performance. Thirsty for knowledge. Ski enthusiast. Husband and father of two Michigan Wolverines.

Greg Cudahy

Years of experience in global operations transformation, price and revenue optimization, sourcing, integrated planning, supply chain synchronization and collaborative applications.

Explore our case study library

EY Consulting case studies are a window into how we work alongside our clients to deliver strategic, sustainable growth.

• Connect with us
• Our locations
• Do Not Sell or Share My Personal Information
• Legal and privacy
• Accessibility
• Open Facebook profile
• Open X profile
• Open LinkedIn profile
• Open Youtube profile

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

• Study Guides
• Homework Questions

6-2 Assignment Global Supply Chain Case Study inter