One of the clear advantages to their supply chain system is that they have control, although according to the people in charge, McDonalds does not want to control their suppliers. Of course, they are a large volume buyer (that may be one of the biggest understatements) which makes the vertical integrated supply chain the best option, but there are plenty of companies using the system and not experiencing the growth that they do. They have taken control of their supply chain nicely.Įverything that makes McDonalds, McDonalds, is done through a vertical integration supply chain, and evidently it really works for them. McDonalds owns the land that their restaurants are situated on, so they do not have to deal with leases and landlords. They grow their own beef through contracted producers, process their own meat, create their own spices and mixes in factories that they contract, grow their own potatoes and other vegetable through contracted producers, transport their goods on their own. McDonalds is a fine example of how vertical integration can keep costs down and profits up. McDonalds the King of Vertical Integration The real staggering fact is that McDonalds outsources 100% of their supply needs. The numbers are simply staggering! All this activity requires an amazingly efficient supply chain that is cost effective and dependable. 60 million people have downloaded the McDonalds App.9 million pounds of French fries are sold everyday.There are 550 million Big Macs sold each year.They sell 75 hamburgers every minute of everyday around the world.They buy over 2 billion eggs annually just in the US.This company has over 69 million customers around the world. Today there are McDonalds fast food restaurants in over 100 countries! Just about everywhere you travel there will be a McDonalds serving up their burgers and other fare. McDonalds began its franchise operations in the 1950’s and has grown exponentially every year since. As a matter of fact, McDonalds and Unilever were the supply chain giants that is until of course Amazon came a long and took the helm. The McDonald’s system has been duplicated many times over by other franchises, but no one has been able to knock the “double arches” out of its top spot. The amount of strategy and planning that goes into McDonald’s logistics must be simply staggering. McDonald’s supply chain is largely responsible for its amazing success and continued growth.
It is impossible to take a bite from a Big Mac at any McDonald’s franchise and not be blown away by this giants’ incredible success.
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