Big mac product life cycle

Running Head: ORGANIZATION OPERATIONS 1

ORGANIZATION OPERATIONS 2

Organization Operations

Stanley Pierre-Charles

Phyllis Parise

BUS 515: Operations Management

May 15, 2016

ORGANIZATION OPERATIONS

Organization-McDonald

Evaluate two to four (2-4) weaknesses that are evident in McDonald’s organization’s product life cycle.

In marketing, the marketing mix forms one of the most essential areas in the marketing department. The marketing mix is mainly composed of four aspects, which include, product, price, promotion and place. McDonalds produces a variety of products, which are categorized into, beverages, non-vegetarian menu, vegetarian menu, and the provision of services such as free Wi-Fi(Stalk, 2010). McDonalds is a fast food organization, which was started in 1955, and it has grown since, to incorporate a variety of products and it has expanded its services to other countries. The organization has mainly specialized in developing a menu that will suit what the customers want but on a close evaluation, consumers needs and requirements change overtime and for McDonalds to maintain a competitive marketing strategy, it has to address the introduction of new products that suit consumers demands.

After assessing McDonald’s production and product life cycle, I established that the organization has reached its maturity level in terms of product production. This stage of the product life cycle is marked with more competitors in the market and the number of consumers decline. Being in the maturity stage some of the weaknesses encountered by the organization is limited amount of consuming customers since many of the purchasers are repeated purchasers and new customers(Hayes, 1999). The organization is also experiencing steep competition from KFC, Pizza Hut, Burger King and Taco Bell and in order for the company to remain in the competitive edge; it has to employ more sophisticated marketing strategies such as promotions and advertisements which also seem to be costly. The BIG MAC is purported to be a product, which has already reached its maturity level. The company is also experiencing price wars with their competitors and this is likely to destroy the profit potential of the market hence threatening the survivability of the organization.

Generate a new product design and product selection, and then determine three (3) strategies that the McDonalds needs in order to strengthen the operation.

Product design is defined as the process of determining all features and characteristics of a product and the design of the product or service must be in alignment with the organizations strategies. In the generation of a new product design for McDonalds, there are many factors, which should be taken into consideration, and this ranges from the products characteristics, the appearance and performance standards(Christopher, 2000). In McDonald’s new product design is the phase of food production and the company always employs food product designers to come up with new food designs. In the design of new products, I will first deal with idea development in which I will assess the needs that the product is likely to satisfy. For example, the development and design of English strawberry muffins, I will assess the market to ascertain the needs and wants on consumers.

Secondly, I would pursue product screening where I will evaluate numerous product ideas that I have developed from market assessment and make a decision on which product design suits best the consumers and it will result to high performance(Hayes, 1999). After idea screening, I will do preliminary design and testing in which I will develop the product and introduce it partially to the market as a prototype to pursue product analysis. This is to establish the market view on the product and its disadvantages. The final step in the product design will be the development of the real product to be distributed for customers’ purchase.

Product design in an organization cannot be well articulated without product selection. New product selection will entail the establishment of the supply gap in the market in order to establish the extent in which customers will need a particular product(Hayes, 1999). The selection of a product also has to take into account the availability and access of raw materials, which could be used in the development of the product. The technical implication of the product should also be established in order to determine the type of expertise needed in the development of the product. For example, in the development of the English strawberry muffins, after the product design, it is important to establish the customers who are likely to purchase the product in order to avoid losses, the availability of raw materials needed in the development of the raw material and the technicalities involves in its development such as the cooks needed to come up with the preparations procedure and their level of expertise. Finally, the profitability of the product has to be accessed to determine the ability to utilize its full potential during marketing.

Determine the key components of supply chain management for the company you have selected.

McDonald’s supply chain management is based on a three-legged stool concept and it mainly consists of suppliers, company and franchisees. The most exemplary technique employed by the company is the cold chain, which consists of procurement, warehousing, transportation and retailing of food products(Christopher, 2000). The e-procurement system used by the company facilitates the purchase and sale of supplies through the Internet. McDonalds uses e-procurement systems such as EMAC digital and this was established to enable McDonald’s franchisees to run their restaurants effectively globally. The organization has two categories of suppliers and this includes major suppliers and small suppliers who are connected by the EMAC digital technology. Some of these suppliers include Dynamix Dairy industries, Trikaya Agriculture, Vista Processed Foods and Amrit Food. The organization receives products from different part of the country, which are then stored in both cold and dry storage facilities, and they are later transported to various restaurants after thorough inspection is done. Franchising, licensing and joint ventures are some of McDonald’s common distribution strategy.

Determine three (3) major issues that could affect the structuring, sourcing, purchasing, and the supply chain of your organization. Provide a solution to each issue.

In the business world, the management of organizations has revolutionized from the existence of solely autonomous entities to supply chain management(Stalk, 2010). The interrelated activities involved in the supply chain management process make it complicated to forecast the transformation processes. In McDonalds, the supply of products from suppliers is always expected to happen within two days of placing the order. Any transportation breakdown, which may happen in the course of delivery, may cause delay in the production process. Sourcing is determined to be a level of interdependence and goal sharing which involves suppliers. The company has employed too many suppliers and this has created a lot of problems in the coordination and control of activities(Christopher, 2000). In the supply chain management process, there should be a constant flow of information from the suppliers to the consumers in a well-structured network. In McDonalds, there are many erroneous mistakes from the orders to be received, cancellations and slow flow of information has highly affected the flow of product in their system. This has increased the complexity of the supply process hence reduced performance.

In order to alleviate the problem encountered as a result of the complexity of the system, it is essential to ensure that a well-networked structure is established to ensure there is a smooth and effective flow of information from the suppliers to the consumers. The company has to ensure that the number of suppliers employed to distribute products are minimized to make it easier to control and coordinate the supply activities. In order to alleviate the problem of transportation and late deliveries, the organization has to develop a well-established transport system that will ensure that deliveries are made on time(Stalk, 2010).

Develop a total quality management tool that identifies and analyzes any future issues. Provide a rationale for developing the selected tool.

Total quality management tool, integrates quality and management tools, which helps an organization in the identification, analysis and assessment of business activities. Some of the total quality control tools used includes the six sigma, pie charts, histogram, tree diagrams, and flow charts. In case of McDonald’s organization I will identify and analyze future issues involving the company through the use of the six-sigma total quality management tool. This involves

Critical quality evaluation: In McDonald the incorporation of food safety management system in place, good manufacturing processes and sanitation programs has highly improved the performance of the organization by providing quality products to the consumers.

Defect: When McDonald receives a complaint from a customer in terms of products quality, the organization tries its best to deliver desired products to the customers’ homes.

Process capability: McDonald has also provided a drive through system, which enables service provision without coming down from the vehicle.

Variation: McDonalds has also provided a variety of menus to the customers in order to enhance their flexibility in choice of products.

Stable Operations: McDonalds has also forecasted the future through change of their operations annually and the introduction of new products to enhance customer’s willingness to purchase new products.

Analyze three (3) advantages in employing the just-in-time philosophy in your organization.

Just in time system is mainly employed in an organization to ensure that the inventory levels are low through the production of specific orders for customers. One of the advantages of this system is that, it easily enables the halt of one production process and switch to another(Stalk, 2010). This system also results to low inventory hence low production cost is incurred. This system also responds effectively to reduce inventory levels hence effective balance is established in avoiding stock out effects.

Evaluate three to five (3-5) means in which the philosophy could potentially impact quality assurance. Provide specific examples to support your response.

The concept of total quality management is purported to be the heart of many organizations and the application of philosophical issues has improved the quality delivery system of many organization. Deming’s 14 philosophical concepts could also be applied in total quality management for example, the development of new philosophies and embracing quality through the organization’s principles(Christopher, 2000). This involves placing the needs of the customers first instead of dealing with the competitive pressure. Through the use of Henry Fayol’s philosophical concepts of management in the division of work to increase specialization leads to the development of skilled and efficient which eventually improved the quality of production(Stalk, 2010). Deming also provided the use of single supplier in the distribution of specific products and this has enabled quality consistency.

Determine a qualitative and quantitative forecasting method for your operation.

The use of executive opinion is one of the qualitative forecasting methods I can use in the assessment of the commodities produced by the organization(Stalk, 2010). This helps in the development of staunch decisions regarding the development of certain new commodities. Life cycle modeling is a quantitative method I will employ in McDonald organization to assess and analyze the performance of products overtime.

Next, create a table in which you identify the characteristics of the operation that relate to each method. Evaluate the strengths and weaknesses of each method.

Qualitative forecasting method

Operation

Strengths and weaknesses

Executive opinions

This is mainly used in the production of products.

Forecasting is done easily and quickly. However, it sets inherent problems to those who meet as a group.

Delphi technique

This deals with the future marketing expectation of the company products

This method is effective for long range forecasting. However, this method seems to be highly unreliable due to lack of consensus.

Quantitative forecasting method

Life cycle modeling

This operating is mainly used in forecasting products produced by the organization.

This method is cost effective since it can easily lead to forecasting of larger economic activities.

This method seems to be poor in complex and small projects.

References Christopher, M. (2000). Relationships and Alliances: Embracing the era of network competition in strategic supply chain management. Hampshire: Gower Press. Hayes, H. & Wheelright, S. (1999). Link Manufacturing Process and Product Life Cycles. Harvard Business Review. Stalk, P. & Shulman, E. (2010). "Competing on Capabilities: The New Rules of Corporate Strategy,. Harvard Business Review .