Monday, November 19, 2012

McDonalds - No Product Out of Stock - Ever!

I like it when a company knows and understands its core principles relative to the supply chain.  I see so many companies make the mistake of trying to develop a culture where everyone can suggest trade-offs.  When that happens then everyone has a great idea on what should come first, second and third in terms of priority.

In this article titled, McDonalds Wants to Be Assured of Delivery, the McDonalds Director of Global Supply Chain Integration and Logistics, Alex Bahr makes it pretty clear that first and foremost nothing can be out of stock - ever.  And, it is for a very simple reason: efficiency of the restaurants. He states:
"A typical McDrive needs to be able to handle 120 cars per hour in Europe, and as many as 150 to 160 cars per hour in the US. That leaves us no time to suggest alternatives if a product is out of stock."
I believe more supply chains need to be just this blunt on what the priorities are.  I once worked in automotive service parts where the objective was 80% of last nights orders are delivered by 10:00am the next day and the remaining 20% were delivered by the end of the day.  This was a "non-negotiable" standard and any cost cutting project had to be done in the context of this objective.  An idea which said we could save $xx dollars if we pushed delivery out a day was rejected immediately.

Clarity brings simplicity and unity of purpose for a team.  Are your supply chain objectives this clear?

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