Big Mac's supply chain success The seed of McDonald's success was sown in 1990 - six years before

it started its actual operations. Sanjeev Bhar traces its supply chain management that played a ital role in its growth. About two decades ago, the QSR wouldn't have meant much to the Indian F&B segment. Today, the ac onym has been seamlessly abso bed in the indust y lingo. !c"onald's, a guably, one o# the #i st b ands that le#t a st ong im$ int on the Indian QSR histo y, has much to do with this. And its success is c edited to its well%established su$$ly management chain. Acco ding to &i' am Ba'shi, managing di ecto and (oint ventu e $a tne o# !c"onald's India )*o th & +ast,, the com$any invested about Rs -.. c o e even be#o e its #i st estau ant commenced o$e ations in /ctobe 0112. 34e had to ensu e that we had the bac'%end lin'ed u$ to the #a m level #o delive y commitment.3 The com$any also de$loyed the latest state%o#%the%a t #ood $ ocessing technology #o having a sound su$$ly chain. The t ansition towa ds the latest technology, which has been subse5uently noticed in othe QSRs as well, changed the Indian #ast #ood scena io to match inte national standa ds. Tracing its success path !c"onald's had been wo 'ing c itically on its su$$ly chain $a t. 6onside ing, an inte national b and t ying to ma'e in oads into the Indian consciousness, its Indian su$$lie $a tne s we e develo$ed in such a manne that made them stay with the com$any # om the beginning. Ba'shi e7$lains, 3The success o# !c"onald's India is a esult o# its commitment to sou cing almost all its $ oducts # om within the count y. Fo this $u $ose, it has develo$ed local Indian businesses, which can su$$ly them the highest 5uality $ oducts e5ui ed #o thei Indian o$e ations.3 As $e today's standings, !c"onald's India wo 's with as many as 89 Indian su$$lie s on a long%te m basis, besides seve al othe s standalone estau ants wo 'ing with it, #o va ious e5ui ements.

In the su$$ly chain management #o a QSR, the dist ibution cent es hold s$ecial $lace #o b inging #ood ight to the outlet counte s. Fo !c"onald's India, the dist ibution cent es came in the #ollowing o de : *oida and ;alamboli )!umbai, in 0112, Bangalo e in <..-, and the latest one in ;ol'ata )<..=,. !c"onald's ente ed its #i st dist ibution $a tne shi$ ag eement with Radha ; ishna Foodland, a $a t o# the Radha ; ishna > ou$ engaged in #ood% elated se vice businesses. The association goes bac' to ?uly 0118, when it studied the nuances o# !c"onald's o$e ations and e5ui ements #o the Indian ma 'et. Recalling the association, Ba'shi ema 's, 3Bette #acilities and in# ast uctu es we e c eated along with new systems by them to satis#y !c"onald's high demands, which #inally culminated into an ag eement with !c"onald's India, #o Radha ; ishna Foodland to se ve as dist ibution cent es #o ou estau ants in "elhi and !umbai.3 As dist ibution cent es, the com$any was es$onsible #o $ ocu ement, the 5uality ins$ection $ og amme, sto age, invento y management, delive ies to the estau ants and data collection, eco ding and e$o ting. &alue%added se vices li'e sh edding o# lettuce, e%$ac'ing o# $ omotional items continued since then at the cent es $laying a vital ole in maintaining the integ ity o# the $ oducts th oughout the enti e 'cold chain'. The o$e ations and accounting is totally t ans$a ent and is sub(ect to egula audits. 3!c"onald's had wo 'ed agg essively to attain the ight su$$lie s and systems that ensu ed that 1. $e cent o# yield was indigenous be#o e the doo s we e o$ened to consume s. The only $ oducts that we used to im$o t we e oil and # ies, #o which we have had made a angements to manu#actu e the oil in India. 4e ensu ed that the $ oducts develo$ed locally abide by global !c"onald's standa ds,3 in#o ms Ba'shi. /ve the last 0. yea s, the com$any has gained e7$e ience and ado$ted $ ocedu es that hel$ed in maintaining a continuous su$$ly o# #ood $ oducts i es$ective o# the climatic conditions. Ba'shi $ oclaims, 3/u logistics and wa ehousing system is obust that $ e$a es us to delive $ oducts at the same tem$e atu e th oughout, without a single b ea' in the cold chain.3 McDonald's suppliers in India

Amrit Foods: Amrit Foods, a division of Amrit Banaspati, has been associated with McDonald's India as a supplier of Dairy Mixes, oft erve Mix and Mil! ha!e Mix for over a decade

now

Cremica Industries:

"remica Industries was started in #$%& as small ice'cream unit run by Mrs Bector out of her bac!yard in (udhiana) *owever after its initial success "remica added buns and biscuits to its product line and in #$$+ McDonald's selected "remica to be its supplier for buns, li,uid condiments, batter and breadin- in collaboration with its international partners

Dynamix Dairies:

McDonald's India has approved Dynamix Dairies, Baramati .Maharashtra/ for supply of cheese to its restaurants) Dynamix has a modern automated plant that is fully computer controlled

Trikaya Agriculture: T i'aya Ag icultu e is !c"onald's su$$lie o# # esh icebe g lettuce. The #a ms at Talegaon, !aha asht a $ oduce the c o$ th oughout the yea

Strengthening the backbone Su$$lie s a e $ oclaimed to be the bac'bone o# any good business as they a e the individual units that build su$$ly chain. /n them de$ends the health o# the ove all business cycle. @ighlighting !c"onald's ole in develo$ing its su$$ly chain netwo ', Ba'shi says, 36 emica Indust ies )which $ ovide li5uid condiments, batte and b eading,, #o e7am$le, wo 'ed with anothe !c"onald's su$$lie # om +u o$e to develo$ technology and e7$e tise that allowed the com$any to e7$and it business # om ba'ing to $ oviding b eading and batte s to !c"onald's India and othe com$anies as well.3 Anothe bene#it in the com$any's #avou was its e7$e tise in the a eas o# ag icultu e, which allowed it, along with its su$$lie s, to wo ' with #a me s in /oty, Aune, "eh adun and othe egions to cultivate high 5uality icebe g lettuce. Ba'shi says, 3The e has been a substantial e##o t on sha ing advanced ag icultu al technology and e7$e tise with #a me sBsu$$lie s li'e utilisation o# d i$ i igation systems )#o less wate consum$tion,, bette seeds and ag icultu al management $ actices #o g eate yields.3 Anothe a ea o# conce n is the sensitive $ ice inde7es o# the #ood mate ials that !c"onald's uses and to tac'le $ ice #luctuations, the com$any goes with yea ly ate ag eements with su$$lie s. !c"onald's too' s$ecial ca e in identi#ying the $ositives o# thei su$$lie s and added thei e7$e tise to im$ ove on thei e7isting standa d. T i'aya Ag icultu e, a ma(o su$$lie o#

icebe g lettuce to !c"onald's India, is one such ente $ ise that is an int insic $a t o# the cold chain. 3Initially, lettuce could only be g own du ing the winte months but with !c"onald's inte vention, it is now able to g ow the c o$ th oughout the yea ,3 says Ba'shi. Also, some o# its su$$lie s with conce ns ove cultu al sensitivities, seg egated with a se$a ate wo ' #o ce #o the vegeta ian and non%vegeta ian $ ocessing lines. Re rigerated !ans or McDonald's

0ational inbound ' upplier to D": 1& vehicles 2 1 for 3ol!ata

/utbound no th % "6 to estau ant: 08 vehicles /utbound west % "6 to estau ant: 00 vehicles /utbound south % "6 to estau ant: 0 vehicle A o$osed ;ol'ata % "6 to estau ant: 0 vehicle

Incorporating chill "ones Setting u$ e7tensive cold chain dist ibution system #o ms the li#eline o# any #ast #ood business. In this ega d, !c"onald's inco $o ated state%o#%the%a t #ood $ ocessing technology along with its inte national su$$lie s to $ionee ing Indian ent e$ eneu s, who a e today an integ al $a t o# the cold chain, ave s Ba'shi. @e says, 34e have im$a ted technical t aining to all ou su$$lie s on how to o$e ate the im$o ted machine ies, educated them on the !c"onald's $hiloso$hy o# Quality, Se vice, 6leanliness and &alue )QS6&, in o de to $ ovide standa dised #ood to ou custome s.3 The 'cold chain', on which the QSR ma(o has s$ent mo e than si7 yea s #o setting u$ the same in India, has b ought about a ve itable evolution, immensely bene#iting the #a me s at one end and enabling custome s at etail counte s. !c"onald's #inding the #acto o# cold oom being vital ensu ed that even be#o e vegetable # om #a ms ente s the e# ige ated Cones, they a e loc'ed in a $ e%cooling oom to emove #ield heat. &egetables a e $laced in the $ e%cooling oom within hal# an hou o# ha vesting whe e a$id cooling dec eases the #ield tem$e atu e o# vegetables to <D6 within 1. minutes. Then a la ge cold oom )a e# ige ated

van, is used #o t ans$o tation to the dist ibution cente s. In the van, the tem$e atu e and elative humidity o# c o$ is maintained at 0%-D6 and 1E $e cent, es$ectively and the #lavou s and # eshness a e loc'ed at %8EF6. +ven in this #ield, !c"onald's ta'es the big $ie o# c edit #o develo$ing the conce$t o# cold chain. Ba'shi claims, 3A io to !c"onald's a ival in India, the conce$t o# a cold chain #o the dist ibution o# #ood and dai y $ oducts # om the #a m to the end su$$lie , in $ edete mined and st ingently en#o ced climactic and hygienic conditions, was at a ve y nascent stage o# develo$ment. Fo #ive yea s $ io to o$ening ou #i st estau ant, !c"onald's $ionee ed the e##o t to develo$ this a#o ementioned cold chain so that ou high standa ds would be assu ed. &a ious Indian and inte national $laye s late ado$ted this system to delive 5uality # esh $ oduce to consume s.3 !c"onald's also 'e$t a tab on 5uality cont ol. !c"onald's, as a ule, th ows away bu ge $u##s 'e$t #o mo e than 8. minutes a#te the #inal $ e$a ation du ing se vice. To avoid any wastage, Ba'shi says, 3The c ew is t ained and e5ui$$ed to #o ecast the e5ui ements at va ious stages o# the day. At the su$$lie s' level, ca e is ta'en to gua d against any $ossible contamination o inte u$tion in the cold chain that can b ea' the lin' and have a det imental e##ect on the 5uality o# ou $ oduct.3