Progress Report on McDonald's Pakistan

Operations and Production Management

Progress Report on McDonald’s Pakistan

McDonald's rests at the apex of the fast food industry. For a considerable amount of time, it has remained amongst the Fortune 500 companies. McDonald’s operations all over the world minted out revenues of $ 24 billion in the year 2011 alone. Business experts all over the globe acknowledged the company for its quality on operational practices, strategic vision and its consistent practices. The “golden arches” extent has its spread in more than 120 countries with over 30000 franchises. This success is not only attributed to fortune but also to challenging priorities, steadfast faith and visionary commandeering. Ray Kroc revolutionised the brother’s first burger stand in San Bernardino in 1954 and set up a food service’s legendary chain called McDonald's. He is remembered as an innovator who altered the dynamics of the food industry to meet the fast-paced routine of the 1960s. He fulfilled the customer’s need of craving quick nourishing meal, sanitary conditions and pleasant service.

McDonald's resisted the strategy of “cumulative attraction” and “affluent segment being the trendsetters” by initiating their franchises in Nazimabad, Karachi and Gulberg, Lahore instead of “Boat Basin” where most restaurants were located. Middle class and working classes in Pakistan mostly live in Nazimabad and Gulberg. The fast food industry thrives on pace generated by the consumers and high volume sales. In the early 80s, many companies experienced rapid expansion in terms of international operations by adopting the franchise structure for the business. Although these conglomerates wanted to stick to their original plan, they had to change their antics to regional tastes. McDonalds’ operations in Pakistan are not distinct to this thinking, but they refuted the traditional marketing strategy of “cumulative attraction inexpensive prices instead of premium pricing strategies.

McDonald's in Pakistan

McDonald's chose Lakson Group of Companies for running its day to day operations in Pakistan back in 1998. The Lakson Group is a corporation whose business portfolio comprises Tobacco, Insurance and consumer goods. McDonalds’ long-term approach is executed consistently in Pakistan though it did adopt the format to the consumer preferences as per the country’s culture. With 44 restaurants in 16 major cities of Pakistan now (Karachi, Hyderabad, Lahore, Multan, Faisalabad, Kala Shah Kaku, Sialkot, Gujranwala, Gujrat, Islamabad, Rawalpindi, Jhelum, Peshawar, Quetta, Sahiwal and Bhera), McDonalds has become one of the biggest fast food chains in Pakistan as well.

Problem Identification

Following our conversation with, Mr. Ammad Mushtaq Awan, Brand Extension Coordinator South at McDonalds Pakistan, we were informed that the fast serving restaurant is not able to meet its set time limit of fulfilling customer orders as per its international standard of 60-90 seconds during rush hours especially during weekends when the footfall is high through drive-in and even conventional dine-in also. Upon further investigation, the reason for the delay was found to be a bottleneck that exists in their order processing system. The bottleneck is the cooking of patty. Once the order of the burger is received, beef or chicken is freshly fried to order to serve the customers. During that period, other ingredients of the burgers are ready, but without the patty, the burger is incomplete. Once the meat is fried, sauces are applied, and patty is placed on buns which takes less time than the frying of the meat, the burger is finally served to the customers.