Responding to market demand

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Fast food chain McDonald’s is perhaps one of the most well-known brands in the world. With 30,000 outlets in 119 countries worldwide and serving tens of millions of customers a day, the company must ensure its restaurants can fulfil orders without fail. That is why McDonald’s Europe has been installing a forecasting and replenishment solution in France and Germany and plans to extend implementation to the UK and the rest of Europe soon.

McDonald’s Europe is using demand-driven supply chain management solutions provider Manugistics Group’s advanced Forecasting and Replenishment solutions enabling the company to make more informed decisions on likely demand, the availability of products and shipment delivery.

The system has already been deployed and gone live in France and Germany where it is meeting the goals of increasing McDonald’s Europe’s responsiveness to market demand, reducing company costs and further optimising McDonald’s existing supply chain. McDonald’s Europe now plans to roll out Manugistics’ advanced Forecasting and Replenishment solutions in the UK, Sweden and Austria. The food service retailer then plans to deploy Manugistics’ solutions in its operations throughout Europe’s major countries within two years.

McDonald’s Europe’s supply chain, in the countries already deployed, is supported and operated by its logistics partners – LRServices in France and Germany’s Alpha Management.

Business scope for the Manugistics solutions include all food and non-food products, franchised and company-owned restaurants, distribution centres, as well as dedicated and non-dedicated suppliers. The functional scope covers sales forecasting at item and restaurant level over a one-year horizon and takes into account a wide variety of factors including likely promotional and competition impacts.

The Manugistics solutions also enable planners to model 90-day replenishment plans across the McDonald’s Europe’s supply chain and simulate supplier capacity constraints for critical items.

“The Manugistics’ solution was seamlessly integrated into the legacy execution system, and has proven to be an advanced and robust backbone for the planners on the McDonald’s Europe integrated supply chain,” says Olivier Chasseloup, supply chain director for LRServices. “The appointment of Manugistics with a world-wide remit has also resulted in first class local consulting and support services. We have already formed a strong basis for a lasting partnership.”

Thomas Schachner, McDonald’s senior director of Global Logistics and Supply Chain Integration, adds: “McDonald’s Europe intends to strengthen its leadership and competitive advantage through on-going service level and efficiency improvements. These are delivered through an integrated supply chain approach, supported by market-leading applications of Manugistics. Through high-levels of forecast accuracy, supply chain visibility and decision support, we have already achieved payback, with outstanding gains in the areas of restaurant inventory levels and in-restaurant efficiencies – including product and recipe usage yields – as well as reductions in wastage, transport and purchasing costs. Based on these very significant results across a network of nearly 2,000 European restaurants live as of today, we shall be rolling out aggressively across the rest of the region.”

Jean Claude Walravens, president of EMEA at Manugistics, adds: “We are very pleased with what we have accomplished for the McDonald’s Europe team already. We believe that by implementing Manugistics’ solutions, McDonald’s Europe has moved one step closer to optimising its supply chain which will allow it to serve customers even better.”

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