McDonald’s Supersizes Inventory to Solve Supply Chain Issues

There are many reasons why McDonald’s is the most popular fast food brand in the world. It’s not just that they have clever ads, catchy jingles and decent food for low prices. I think the main reason is much more basic: Supply chain management. They find creative ways to stay well-stocked, even in extreme circumstances.

Preparing for Floods and McFlurries

McDonalds restaurant, Fishbowl BlogFor example, McDonald’s in Thailand (which I learned is called McThai) recently faced flooding and other severe weather that blocked roads and kept some chains from getting food supplies for several days. In response to this challenge, the company is increasing the amount of food in stock at its restaurants to last 10 to 14 days.

For food producers, finding the right inventory balance is one of their biggest concerns. Frozen food is a highly perishable product, so it’s extremely important to avoid overstocking and losing money on spoiled goods.

McThai, after analyzing their food inventory system, decided it’s worth the risk to increase their food stock. Every company is different, so before you decide how to optimize your inventory levels, you should study customer levels, buying habits, seasonal changes and supply chains.

McNuggets of Wisdom

One problem McThai faces is the fact that bread doesn’t stay fresh as long as meat. So what do they do if they wind up with more beef and chicken than buns? Simple. Radically change their menu so they offer rice, chicken strips and other backup dishes. Thanks to their flexibility, they are able to keep serving customers even in the most trying times.

Another strategy McThai uses is opening multiple distribution centers. This reduces the risk of food shortages because extra supplies are never too far away from restaurants. It’s a good idea to have multiple options for getting supplies because it’s hard to predict when a supplier will delay shipments.

You don’t have to be the world’s most successful restaurant chain to know that you need to have a strong supply chain. You should pay close attention to your vendors and plan for the worst, just in case. With any luck, none of those worst-case scenarios will happen, but at least you’ll be able to rest easy knowing that you’re prepared.

About Robert Lockard

Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks and small business. Fishbowl Inventory is the #1-requested inventory management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies. His favorite movies include Mr. Smith Goes to Washington, Fiddler on the Roof, Back to the Future and Lawrence of Arabia.
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2 Responses to McDonald’s Supersizes Inventory to Solve Supply Chain Issues

  1. Jack says:

    Interesting that they would increase their food stock. I suppose they figure their sales will rise and will need to have more merchandise on hand to meet demand. Good read.

    • Thanks for your comment. It seems like McDonald’s is extremely popular anywhere in the world. Other companies wish they had the problem of not having enough supply to meet all the demand for their products. As long as McDonald’s keeps a close eye on freshness dates and makes all the new inventory and production facilities worth their weight in gold, they should be successful with this strategy.

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