Purchasing can be described as a very highly complex organizational process that is more than the traditional perception that the fundamental function of purchasing is to get commodities and services to cater to for the organizations internal needs. The purchasing objectives are divided into five essential categories which include continuity of supply, effective and efficient management of sourcing process, development of a supply base, formulation of integrated purchasing strategies and development of aligned goals that reinforce the goals and objectives of the enterprise. This essay will evaluate MacDonald who is the world leading global foodservice retailer outlining its history, cuisines served and other aspects. There is the description of the MacDonald's central commissary in addition to the various purchasing technologies. The essay will describe
MacDonald headquarters are located in the United States. The restaurant was founded in 1940 by Richard and Maurice MacDonald and was a barbecue restaurant at the time. The hamburgers were later introduced in 1948 which show the rise of the company to the global leader it is today. The company boost over 36,000 locations in more than 100 nations. The retailer serves more than 58 million consumers worldwide on a daily basis. The company is operated by a franchise, the corporation itself or by an affiliate (McDonalds, 2018). From July 1, 2015, the company started running under a new organizational structure which features various segments which are the United State market, foundational markets, international lead markets and high growth markets (McDonalds, 2018). The products served at Macdonald include hamburgers, sodas, chicken nuggets, desserts, cheeseburgers, French fries, milkshakes and breakfast food.
A commissary in the food industry is a centralized cooking facility whose operations entail shipping finished goods to the clientele, markets or affiliate restaurants instead of having food prepared on site in all the locations. In this facility, there is processing of food in which they are made in various forms and types. The food is then distributed to various locations for further processing and serving to the consumers (Foodservice Systems, 2008). The operations that entail food processing can take various forms. In this food service system, the enterprise takes the benefits of the economies of scale which means it is most appropriate in cases where mass food production is needed. Commissary foodservice is utilized in most forms of foodservice operations. The airline industry is synonymous with the centralized foodservice system. This means a central production facility is established on or near the airport and the food production operations are performed (Foodservice Systems, 2008). Such operations include food preparing, pre-plating, and sealing of frozen or chilled food. There are preparation carts that are transported by trucks. After the airplane is airborne, there is assembly and distribution of meals by the stewards (Foodservice Systems, 2008). The practice of establishing commissaries has been adopted by restaurant corporations too. Such restaurant corporations include McDonald's which operate a specially-designed commissary. The function of this facility includes production of various foods such as hamburgers, the syrup used in the preparation of soft drinks, chili and apple turnovers among others. For instance, in this facility, there is the preparation of many pounds of hamburger patties which are then distributed to the various outlets of the restaurant.
Using the commissary kitchen, McDonald can centralize food production, and this means they obtain some crucial benefits. It is possible to deliver ingredients to one location guaranteeing the freshness and minimizing the costs incurred in sourcing quality. The restaurant chain allows the company to promote consistency of their products. This because they are made at the same time using the same equipment. It is also possible to ensure food safety and sanitation. The restaurant has only one kitchen improving the ease of cleaning and thereby avoidance of contamination. The use of a central commissary by McDonald makes economic sense since increase efficiency translates to costs savings this can be transferred to the consumer in the form of reduced prices.
In the current business environment, many enterprises are reevaluating their purchasing process and adopting new tools appropriate in meeting their needs. In the optimization of the purchasing process, their various technologies adopted by McDonald and they include product ordering, bar-code leader, and inventory tracking.
Product ordering technology is critical since it helps in the enhancement of efficiency of an organization's supply chain. Having an automated product ordering technology gives the organization more control and insight concerning its operations. Product order processing is important in the maintenance and tracking of orders, and it is important in optimizing the purchasing process (Khan & Hasan, 2013). In the case McDonald's, it will improve the purchasing process and thereby ensure that consumers get quality products. The implementation of this technology will ensure that ordering of products is streamlined and the orders are tracked appropriately. The product locations information is provided appropriating tracking, and this enhances the purchasing process in addition to reducing errors (Khan & Hasan, 2013). Ultimately, this improves the experience of the customers and improves the profitability of the company.
A barcode reader which is also referred to as a barcode scanner is described as an electronic device utilized in reading and output printing to a system. This device is important for the optimization of purchasing process due to its efficiency and effectiveness. There is the provision of a method of tracking and storing information concerning products. They play a critical role and benefits in comparison to manually entering information. Some of the benefits of the barcode scanner in purchase processing include the control of inventory in that it tracks the inventory. They are also important in the reduction of human error. The automation of the purchase processing by using barcode scanner improves the accuracy and speed of the collection, processing, and transmission of records and management of data in the restaurant.
An organization's success is determined by its ability to managed its supply chain which is ensured by effective inventory management and tracking. Inventory tracking entails systems and policies formulated to aid in monitoring how inventory moves (National Food Service Management Institute, 2012). The advance of technology has greatly enhanced in the tracking processes of the inventory. It has entirely automated the inventory tracking workflow. This means that when there is the movement of the inventory, there is an automated update to the inventory management system. This leads to the optimization of purchasing through the elimination of the human error which might be present in the manual tracking of the inventory. The utilization of inventory tracking technology enables appropriate purchase workflow.
Progressive organizations acknowledge the need for purchasing functions and its importance. It is important to define the purchasing objectives to help in justification of the need for purchasing department (Objectives of the Purchasing Function, 2009). The purchasing objective should align with the overall organizational objectives. These objectives include:
Maintenance of supply continuity: One of the objectives of the purchasing function ensures the restaurant has continuous availability of supplies and equipment for the maintenance of production schedule and ensure it is not disrupted. The efficacy of purchasing process is dependent on the appropriate balancing of various factors.
Upholding quality standards: This is another objective which ensures the materials that have been purchased reach the needed quality. There is the maintenance of quality standards since the productions of goods are according to the defined specifications.
Duplication is avoided: There is the presence of accurate knowledge for the purchase process and therefore only appropriate products. The availability of this information ensures that proper decisions can be made and necessary duplications and wastes can be avoided.
Development of alternative supply sources: Exposure of other sources of supply is critical to improving the company's bargaining power thereby reducing the purchasing cost. This means the restaurant can decide on another supply if a certain supplier does not meet the specified standards (Objectives of the Purchasing Function, 2009).
McDonald has emerged as a world leader in the food industry. To maintain its status in the industry, effective and efficient purchasing process is necessary. The use of product ordering, bar-code leader, and inventory tracking technologies are important in the optimization of the purchasing process. This will ensure the company enhances its purchase operations and thereby fulfill the purchasing objectives.
Company Overview & Segment Information: McDonald's. (2018). Corporate.mcdonalds.com. Retrieved 28 January 2018, from http://corporate.mcdonalds.com/mcd/investors/company-overview/company-overview-segment-information.html
Foodservice Systems. A Guide to Centralized Foodservice Systems 1 INTRODUCTION TO FOODSERVICE SYSTEMS. (2008). Nfsmi.org. Retrieved 28 January 2018, from http://nfsmi.org/documentlibraryfiles/PDF/20080212032530.pdf
Khan, R., & Hasan, A. (2013). Autonomous Order Processing System for Supply Chain Management-An Initiative to Match Demand and Supply for Processed Food Industries in Bangladesh. International Journal of Modern Engineering Research (IJMER), 3(6), 3348-3358.
National Food Service Management Institute. Inventory management and tracking reference guide. (2012). Nfsmi.org. Retrieved 28 January 2018, from http://www.nfsmi.org/documentlibraryfiles/PDF/20121114100354.pdf
Objectives of the Purchasing Function. (2009). Mt-pleasant.org. Retrieved 28 January 2018, from http://www.mt-pleasant.org/docs/board/policies/purchasing.pdf
Tate, W. (2014). The Purchasing Process | the Essential Concepts of Purchasing and Supply Management | InformIT. Informit.com. Retrieved 28 January 2018, from http://www.informit.com/articles/article.aspx?p=2165644&seqNum=7
If you are the original author of this essay and no longer wish to have it published on the thesishelpers.org website, please click below to request its removal:
- Case Studies of Business Organizations
- Contemporary Issues in Financial Management: Aviva Insurance Company. Essay Example.
- Essay on Developing and Empowering Instructional Leaders
- Research and Development Plan of Juicy Lucys - Paper Example
- Ethics and Values in Business: Case Study of HRDevelopment Company
- Research Paper Example: Advantages of Airbnb to Owners and Customers
- Management Essay Example: Crisis at the Carillion Construction Company