USING TEAMS IN PRODUCTION AND OPERATIONS MANAGEMENT
CONTEMPORARY BUSINESS
MAY 13, 2012

Facts
In this case study, I have been asked to research a leading manufacturer or a major retail or restaurant business. Analyze the company’s production and operations management system and evaluate the use of teams in its production and operations management.
1. Describe a major global corporation: (1) a leading manufacturer or (2) a major retail or restaurant business. Describe the type of business, market share, financials, size, and global presence;
2. Describe the company’s production or operations management;
3. Describe and evaluate the company’s use of teams in production and operations management;
4. Analyze and evaluate the company’s ability to adjust to a major economic, environmental, or natural crisis (such as the real estate crash, financial crisis, nuclear meltdown, hurricane, flood, oil spill, etc.) and communicate effectively with their employees and customers about issues caused by the crisis.
Analysis
Describe a major global corporation: (1) a leading manufacturer or (2) a major retail or restaurant business. Describe the type of business, market share, financials, size, and global presence.
In this scenario, I am going to address the above mentioned topic, regarding describing a major global restaurant business. The restaurant business that I am going to discuss is the McDonalds Corporation. McDonalds for the past decade has lead the fast food industry in sales, with serving nearly sixty eight million (68,000,000) people in one hundred and nine-teen (119) countries each day. McDonalds’ total sales to date are $27.441 billion and the company has one point six million (1.6 million) employees. McDonalds is well known for is Big Mac and its dollar menu. As a result, of these products and other products, McDonald’s has been able to capture market shares all around the world. Due to this about eighty-five (85) percent of McDonald’s restaurants are run as franchises. The other fifth-teen percent are run as affiliates but still generate significant revenue due to the McDonalds brand.
McDonalds, is known as the fast food restaurant who introduced the drive through window. Over the past couple of years, McDonalds sales have continued to increase by about five (5) percent each year and because of this McDonalds has been able to return over five point five (5.5) billion, to shareholders through dividends and share repurchases.

| McDonalds | Core Business | Fast Food | Size | 1.6 million + | Financial | $27.441 bil (sales) | | $ 97.38 (stock price) | Global Presence | Serving nearly 68 million people in 119 countries each day | Use of E-Business | Global | Sources: Forbes.com, mcdonalds.com/us/en/our_story/Corporate_Info.html |
Describe the company’s production or operations management.
In this scenario, I am going to address the above mentioned topic, regarding operations management. But before I address this topic, I would first like to define operations management. Operations management deals with the design and management of products, processes, services and supply chains. It considers the acquisition, development and utilization of resources that firms need to deliver the goods and services their clients want (MIT Sloan School of Management, 2012). Operations Managers for McDonalds are in charge of overseeing the day to day operations of the company, such as but not limited to company employees, customer service, and the company’s production processes.
Operations Managers are said to carry out four (4) major task in a company: * Production processes; * Design layout; * Implementation for the production processes; and * Quality control of the production process (Kurtz, 2011). .
McDonald’s provides production processess by continuosly offering a variety of different products on its menu to its customers. One example of this, is McDonalds’ dollar menu. Also, McDonalds covers design layout by making sure each of its facilities are set up in a similar manner so that no matter where the customer and or McDonalds’ employees are they will feel like they are at their home location. Next McDonalds carries out implementation for the production processess by selecting the best suppliers and controlling the inventory. Finally, McDonalds applies quality control over the production process in order to maintain the highest possible quality. This is accomplished through implementing processes that take into consideration customer service, hygiene and quality of prodcts (i.e. food). McDonalds’ operations management has allowed it to be the standard for the fast food industry.
Describe and evaluate the company’s use of teams in production and operations management.
In this scenario, I am going to discuss teams in production and operations management. McDonalds uses a variety of teams in relations to productions and operations management. Before for I address teams in relation to McDonalds, I am going to define the term team. A team is is a group of people with complementary skills who are committed to a common purpose, approach, and set of performance goal (Kurtz, 2011). At McDonalds, each individual employee work in collaboration with one another to achieve customer satisfaction. This first begins when the customer walks through the door and approaches the cashier and places an order. Upon receipt of the order the cashier relays the customer’s order to the cooks and the cooks begin to prepare the customer’s order. Once the cooks have processed the order the cooks then deliver the final product to the cashier, who then delivers the order to the customer.
McDonalds has structured this process so well that three (3) employees can implement this process while working with twenty (20) or more customers and still delivery quality customer service. This, is the ultimate implementation and achievement of teams production and operations management.
Analyze and evaluate the company’s ability to adjust to a major economic, environmental, or natural crisis (such as the real estate crash, financial crisis, nuclear meltdown, hurricane, flood, oil spill, etc.) and communicate effectively with their employees and customers about issues caused by the crisis.
Between November 1999 and February 2000, McDonald’s stock declined from $48 to $32 per share. The financial analysts surmised that McDonald’s in the United States had reached market saturation. Martin Huber, CFO of McDonald’s Switzerland, concluded that every opening of a new McDonald’s restaurant intruded upon the revenue of other restaurants already in operation. As a result, McDonald’s decided to pursue a “diversification” strategy. McDonald’s Switzerland, headed by CEO Urs Hammer, chose to pursue ventures in the hotel business and in 1999, received the green light from McDonald’s headquarters (Thunderbird 2008).
Despite a favorable location, media attention and brand awareness, the Golden Arch Hotels failed and were sold off after just two (2) years. The Golden Arch Hotels faced multiple challenges: 1. High turnover in staff 2. Because of the high cost of construction, the debt service on the construction costs could only be recovered at a three-star price range and above but consumers found it difficult to believe McDonald’s could off four-star accommodations 3. Competition of new properties 4. Design issues with the properties (e.g., size of meeting space did not allow for large conferences) 5. Outbreak of SARS and September 11, 2001 impacted travel
(Thunderbird 2008).
However, failure of McDonalds’ hotel industry did not stop the company in its diversification process as McDonalds, decided to diversify again in 2002, horizontally by introducing its dollar menu. The dollar menu strategy was communicated effectively to McDonalds’ employees and customer as an attempt to empower the individual to get a lot for a little. This campaign has been successful over the last decade as numerous fast food restaurants have implemented similar campaigns, reflective of McDonalds’ dollar menu. McDonalds is an industry leader in production operations management and uses teams effectively to accomplish superior customer service and the company’s mission. As a result, McDonalds will continue to be and industry leader in the fast food market for many years to come.

References
Kurtz, Dave. (2011). The Changing Face of Business. In Contemporary Business. (13th ed.). John Wiley & Sons Inc., 330-359
Forbes. (2012) Retrieved from http://www.mcdonalds.com/us/en/our_story/Corporate_Info.html
MIT Sloan Management. (2012). Retrieved from http://mitsloan.mit.edu/omg/om-definition.php
Thunderbird the School of Global Management. (2008). Retrieved from http://knowledgenetwork.thunderbird.edu/research/2008/07/11/anatomy-of-mcdonald%E2%80%99s-failed-venture-in-hotels/