June 25, 2011

Mc Donald's Fast Food Restaurant JIT

At Mc Donald’s Fast Food Restaurant, strategy of Just in time has been applied and has brought many benefits to the organization and added value to the organization. This just in time system has helped in reducing the costs by drastically cutting down on inventory levels and wastages.

Previously at Mc Donald's Fast Food Restaurant the strategy was to pre cook all the burgers and place them under the lamps to keep them hot. As long as possible they were kept and the unsold went as waste. Special orders were expensive and time taking. Later on it transitioned itself totally to Just in Time approach. For this, extensive staff had to be hired to quickly prepare the burgers and training had to be given. It looked expensive in the short term but it reduced the wastages drastically and helped Mc Donald's excel at customer satisfaction in the long terms.
                                          A lot of advantages were brought in by this JIT method:

1.      Improved Quality – The burgers are prepared freshly and hence the quality has improved.
2.      Customer service – As the burger is made only after the order is placed, making special orders is not an issue.
3.      Cost Reduction – Due to significant reduction in wastage as uncooked material has a higher shelf life.

This strategy was first attempt to bring JIT manufacturing techniques to service industry. It was the ‘Made for You’ strategy and also helped Mcdonalds in setting up demonstrative kitchen techniques which is a unique aspect and is its USP.

The writer of this article, Naman Jain is a PGP student of Indian Institute of Management, Raipur . He has done his B.Tech in Computer Science & Engineering from Vellore Institute of Technology, Vellore and can be reached at namanvit @ gmail . com

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