Mc Donald's

One of the most important strategic decisions made by a company like McDonald's is where to locate their operations. Location options include maintaining current sites while adding another facility elsewhere. (Heizer, 2001) Their facilities are located all over the world due to their franchising system. In the early 1990's, McDonald's began working with major oil companies to pioneer a new format for developing a restaurant, convenience store and fueling facilities on a single site. By co-developing sites, fueling facility operators and McDonald's could offer the busy consumer the ultimate in convenience - one stop shopping for great food, branded fuel and convenience store items.

According to Operations Management, McDonald's has revolutionized the restaurant industry by inventing the limited-menu fast-food restaurant. Some innovations it has made are the introductions of indoor seating and drive-through windows, which were strategic issues of facility layout. By adding breakfasts to the menu, they incorporated a product strategy. Another layout decision was the addition of play areas. McDonald's continues to improve their operations by innovating a new layout to facilitate a mass customization process. Some of the restaurants now have the "Made for You" kitchen system, where sandwiches are assembled to order and production levels are controlled by computers. This new layout is intended to both improve the taste of food by ensuring that it is always freshly made, and to facilitate the introduction of new products. Total production process time was shortened and other adjustments were made to save even more time and to work in conjunction with the new layout. This new layout will be more efficient, and save more time and money. It achieves a higher utilization of space, equipment, and people.

A process strategy that may apply to McDonald's is a repetitive process. They moved from process focus to repetitive focus. They are now trying to add more variety by moving toward mass customization with their new layout. "Fast-food firms are an example of a repetitive process using modules." (Heizer, 2001) More customizing is allowed in this type of production than in a continuous process. A repetitive process falls between the product focus (high-volume, low-variety) and process focus (low-volume, high variety products). Modules (which are previously prepared) such as meat, cheese, sauce, tomatoes, and onions, are assembled to get a quasi-custom product, a cheeseburger. This way, McDonald's has the economic advantages of the continuous model (where many of the modules are prepared) and the custom advantage of the low-volume, high-variety model. Many restaurants have high variable costs with extremely low utilization of facilities. However, with McDonald's new layout, since production levels will be controlled by computers, their variable costs will be lower and they will have a higher utilization of facilities especially since McDonald's is a fast-food restaurant.

Operations managers design service processes to find the best combination of customer interaction and the related