Operation management of McDonald’s Yilin Yu B314502

INTRODUCTION
In current society，operation management has been highly regarded by all organizations to survive and develop in fierce commercial competition. As one of the most famous and successful fast-food restaurants over the world, McDonald’s have its own operation system that can meet its developing requirement. Apart from improving its product, McDonald’s is also dedicated to speed up service rate and maximize profits by bringing new ideas to its operation system since it was established by Richard McDonald.

McDonald’s in Loughborough（layout flow process）
Located in the central of Loughborough, McDonald’s serves thousands of people a day. According to the high volume and low variety of customers, the process type of McDonald’s turn out to be service shop. Specifically, staffs in the kitchen transfer the materials into products while the waiters stand at service counter providing service to customers. In order to access the efficiency of processing, McDonald’s divide its layout into two parts: One is the line layout in service area, which means customers should waiting in lines to be served for their meals. The other is the process layout in the kitchen. By locating the same cooking machine together, when materials (like bread, chicken, beef etc.) flow though the kitchen, they will take a route from activity to activity according to the step of cook. (Textbook, p208). The whole layout of the ground floor of McDonald’s in Loughborough are presented as follow picture：

It is clear from the picture that the locations of facilities in service area are designed especially for line layout. For instance, in front of the service counter is the space between tables where customers can stand in queue without disturbing others; and the coffee machine is placed between two service machines, which make sure that both two waiters can make a hot drink as quickly as possible. To the same purpose, with the process layout in kitchen，different products (like hamburgers and French fries) can be cooked in different routes at the same time which save time greatly. Both two layout of McDonald’s thoroughly follows out the policy of “fast”. The flow in service area can be very simplex. According to the picture, Customs wait in lines to get their meal. If take away, they will leave McDonald’s immediately. Otherwise, after helping themselves with ketchup, pepper or napkin, they will take a seat and have the meal, then clean the table and leave away. (厨房FLOW重写) INPUT / OUTPUT
For McDonald’s’ input, materials (including chicken, beef, milk, vegetables…)， information ( including customer preference..) and customers are transformed resources, which are transformed and served by transforming resourses. Facilities (including kitchen equipment, computers...), staffs (including waiters, cleaners, kitchen staffs…) are transforming recourse. All product sold to customers and all service provided to customers are output of McDonald’s.

4Vs
4Vs refer to volume, variety, variation, and visibility.
McDonald’s is definite a high-volume organization that sells thousands of hamburgers every day. However, the customer volume in Loughborough is not as high as the McDonald’s in big cites like London or Manchester. In McDonald’s working procedure, each staffs have a high repeatable work to do which means they would be given a specific task, like wrapping the hamburgers, frying French fries and so on. They are required to do the task proficiently. The systematized work and the high repeatability job lower the unit cost and spread the fix cost of the operation to a great number of products and service. (Textbook p20).

The variety of McDonald’s is low because McDonald’s is a restaurant of fast food that has a fixed menu every day. To follow the principle of fast, staffs should make products in advance, which make less choice to customers but decrease their waiting time. From service perspective, McDonald’s provide only one form of service, all customers take the same routine to get the meal without alternative.

From variation dimension, McDonald’s has a low variation depend on the unfluctuating demand. Unlike some operations that will be significantly influenced by external factors, food industry is a necessary part of people’s life under any circumstances. Hence, McDonald’s products are suitable in all four seasons. Because of McDonald’s’ low unit lost and high utilization of materials, they do not change their products and service all year around. Moreover, Low price is also a vital factor to keep a consistent and predictable demand.

The visibility of McDonald’s is very low. Customers can only see the service area of the restaurant. All the processes of making hamburgers or other products are operated in kitchen, which only expose to the staffs.

FIVE PERFORMANCE OBJETIVE 1. The Quality objective
Quality of the products and service is always the most intuitionistic factors for customers to judge an operation. To meet the customers’ satisfaction, McDonald’s put effort to provide delicious hamburgers, and make sure the materials are always fresh. Meanwhile, the staffs in McDonald’s are friendly and always ready to serve. Restaurant’s environment is clean and tidy. Therefore, the high quality of food and service brings McDonald’s a good reputation, which is an importance advantage to retain and attract new customers. Moreover, the fewer mistakes are made while improving quality, the less extra cost should be paid to make up it().

2. The speed objective
For a fast food restaurant, how to shorten the time between customers’ ordering a meal and receiving it is the most important point that operation managers should take into account. High speed service in McDonald’s mean it should not be taken more than 3-4 minutes from a customer pay the money for the food to eating it. Otherwise, they would be impatient. Apart from customers’ experience, high-speed service means McDonald’s can serve more customers within a period of time, which dramatically improve sales. While the growth of sales, inventories and waste are both reduced.

3. The dependability objective
McDonald’s require a high dependability, which means customers would get their meal in time. On one hand, McDonald’s have a fixed opening time in weekdays and weekends. Customers can find the time in the gate of entrance. On the other hand, in order to control the length of queues, in the peak time, 4 service counters would work together to reduce the waiting time compare to the 2 counters work in off-peak time. Dependability reduces the fixe cost like electricity and heating. What’s more, it gives trust either between staffs or between customers and restaurant. It helps to improve the efficiency and give a good shopping experience to customers.

4. The flexibility objective
On the whole, McDonald’s flexibility is low, because the products and service is almost fixed. However, there are some details in four parts of flexibility. For the product/ service flexibility, McDonald’s have two different menus, one for breakfast and the other for lunch and supper. Those provide more choices to customers who come in different part of the day. Mix flexibility means customers can have personal request to the products, like I want a Big Mac Burger without lettuce，a large cola without ice. McDonald’s become more accepted by people who has special preference by setting these humanized choices. The volume flexibility of products and service are low depending on the high volume and low variation. And for delivery Flexibility, the staffs would delivery the meal to customer if order a product that haven’t been prepared. The flexibility objective help McDonald’s saves a large deal of time and money but get more market share.

5. The cost objective
Lower the cost is the vital point for maximizes the profit. Because of the low unit cost of producing products, McDonald’s’ products can keep in a cheap price. The cost of operation is divided into two parts. For the staff cost, the high-repetitive job requires no special skill to workers, which means McDonald’s have a very low labour cost. For the material cost, the high-speed service reduces the inventories and the waste of materials, which lower the cost in the same time.

Effects on quality performance
Quality is considered as the most important point to customers. Thus, improving quality of service and products is a key task of the operation function (TEXTBOOK,P593). The operation characteristics have a large effect on quality performance.
In order to output high quality of products, McDonald’s have a strict requirement on the food material. Flesh and healthy are the principles for picking the material, together with nice packing cases, which significantly contribute to functionality and appearance of the quality performance. Meanwhile, the staffs in McDonald’s are friendly and patient. Customers can talk to them directly whenever they need help or have requests. And customers can get their meal in a very short time without mistake. Those staffs helps McDonald’s set a reliable image to customers. At the same time, McDonald’s provide a clean and comfortable dining environment to customers. The location of facilities is not just for the appearance, but also for improving the service, like the space between the tables is for the waiting queue. These efforts can give a good impression of quality to customers.
4Vs can affect quality performance as well. The high volume of the customers may cause the long waiting queue that would lower quality of service. However, by open more service counters in peak time, McDonald’s is taking measures to solve this problem. Due to the low variety and variation, McDonald’s menu hardly changed that may not satisfy the customers. They would be tried of the same kinds of burgers, which have a negative effect on the functionality and durability of quality performance. Low visibility has a good influence on the quality performance. Staffs will not disturb customers’ dining time when they are making hamburgers in the kitchen.

London Zoo
Process/ Layout/ flow
Located in Regent’s Park in London, ZSL London Zoo is a famous an attraction of animal collection. According to the Figure 2, the layout type of London Zoo is a combination of process layout and cell layout. London zoo has a clear function division to provide different living environment to different kinds of animals. At the same time, different kinds of animals having similar requirements would be placed together that reflecting the process layout. For instance, in the middle of the zoo, there is an area called Gorilla Kingdom, which is constructed especially for quadrumana. And in the east part of the zoo, all kinds of halobios are living in an Aquarium. Obviously, the layout of London Zoo is much more complex than the McDonald’s in Loughborough though they have a same process type that is service shop because London Zoo is a international site takes up a lager area and provides different kinds service for customers. As a consequence, the flow of London Zoo is complicated to describe. Unlike the McDonald’s simplex flow, customers can take different routines to visit the zoo depend on their own preferences.

Input, output and 4Vs
The input and output of London Zoo is a little different from McDonald’s. The animals, information and visitors are transformed recourses of London while the staffs and facilities are the transforming resources. The service and experience provided to customers is the output.
The volume of London Zoo is unfixed, which fluctuate largely during the different period of the year. However, on the whole, it is high, and much higher than a branch of McDonald’s. Different from the little shop of McDonald’s in Loughborough that target at local people, London Zoo attracts visitors all over the world. The rest of the 3Vs are opposite to the McDonald’s. London Zoo has a high variety. Compared to fixed menu and service in McDonald’s, it has a huge numbers of animals and the amount changes very year. In service dimension, London Zoo is not a place only for watching animals, but also a place provides diversified service to visitors, such as holding animal acts, convey animal knowledge, etc. In addition, there is also food service and shopping area in London Zoo. London Zoo has a high variation based on the demand changing as well as a high visibility. Customers have an almost unchangeable demand for McDonald’s’ food, but for London Zoo, the volume of customers can be affected by some external factors like weathers or holiday times. For visibility, the operation procedure of treating animals can be clearly seen in London Zoo in comparison that customers cannot see the process of how the materials transfer to products in McDonald’s.

Five Performance Objectives
The performance objectives of London Zoo are relatively different from McDonald’s mainly because they are operations in two different fields.
Quality objective: The quality objective of London Zoo is giving a wonderful tour to every visitor. Apart from presenting animals, London Zoo also has many recreation facilities to enrich visitor’s experience. Together with the friendly staffs in the zoo, London Zoo wants to make the tour fun and significant.
Speed objective: Similar to the McDonald’s, speed is also an important objective to London Zoo. For example, if London Zoo plans to hold an especial exhibition, it is obviously that the longer it takes to prepare an event, the more money will spend in labour.
Dependability objective: London Zoo has fixed open time, which is predictable to visitors. And the staffs are taking measures to solve the parking problem.
Flexibility objective: London Zoo is an operation with high flexibility. There are so many departments can be visited without orders. And London Zoo provides many other services to visitors rather than just presenting animals. On the contrary, McDonald’s flexibility objective is not as complicated as London Zoo because the differences in service mode. In McDonald’s is every customer should same routine to get the meal. Thus, McDonald’s chooses to put flexibility into more detailed elements.
Cost objective: The expenditure of London Zoo is very large in maintain the facilities, much larger than a restaurant of McDonald’s. However, reducing the cost is the same objective to London Zoo and McDonald’s.

Problems of Quality performance
Due to the high 4Vs, London Zoo has a large cost every day. However, the zoo is facing the problem of fund shortage. In more than 25 years, the lack of investments restricts the improvement of infrastructure construction, which has a huge negative effect on quality performance. (pearson,p29) For example, the lack of parking space troubles a lot of visitors who come by private cars.
Besides, it increases the complexity of management because of the high flexibility and dependability.