The profit planning system at McDonald’s comes down to turnover and guest count planning. Planning is an estimate of future turnover and guest count based on current trends and past data, such as seasonal events and programs that have been held in the past. It is very important to plan accurately, as the calculation will directly affect the two largest expense items: grocery costs and labor costs (Information Resources Management Association, 2019). Planning is done for a specific period of time:
- Monthly and annual turnover (for P&L and for scheduling) (Information Resources Management Association, 2019);
- Hourly, daily and weekly turnover and number of guests (for scheduling and ordering products).
Monthly Sales and Guest Scheduling
Monthly turnover and guest count planning figures are used for P&L financial planning and can also be used to determine staffing requirements. Planning is based on the previous year’s turnover and guest counts, as well as trends and promotional programs (Information Resources Management Association, 2019). While planning the turnover and number of guests per month based on the previous year, various factors that may change from month to month, such as weather conditions, promotional programs and the appearance of new competitors are also taken into consideration.
Turnover Planning
One of the company’s main activities is to control the impact of the number of trading days on the sales turnover. Comparing the current month to the same period last year, the number of trading days in each month is taken into account (Information Resources Management Association, 2019). For example, Friday and Saturday are the busiest trading days of the week (Information Resources Management Association, 2019). Therefore, if the number of Fridays and Saturdays in the month whose turnover is planned differs from their number in the same month last year, it is necessary to take this difference in the number of trading days into account when planning.
Managers Are Always Involved in the Processes
Taking into account the requirements and wishes of its customers, the company has created a modern training center Hamburger University. Here, management works directly with customers to get to know them better, understand how their tastes are changing, and determine future business prospects (Information Resources Management Association, 2019). These management actions are a prime example of how Six Sigma techniques can be applied to improve the customer experience (Information Resources Management Association, 2019). When a company’s business processes are fully responsive to customer needs, any potential losses disappear on their own, as only those tasks that add value to the final product are performed.
By sending management to work as rank-and-file employees, the company manages to eliminate non-value-adding, useless, procedures, and unreasonable expectations of the management itself. According to its policy, McDonald’s will not hire an employee to the management team if he or she has not had experience working directly with customers in the restaurant (Information Resources Management Association, 2019). Or, if the decision was made to hire an employee with no restaurant experience for a managerial position, he or she would be required to complete a temporary internship there before taking on new responsibilities. Senior management at McDonald’s regularly arranges surprise visits to their restaurants to observe the processes and understand where improvements are needed (Information Resources Management Association, 2019). McDonald’s hires a third-party company to conduct covert audits to see if the changes implemented are having an impact and if all business process requirements are being met.
Conclusion
McDonald’s is a leader in production planning. It is the control over the turnover and the number of guests that allows the organization to predetermine the use of resources. This approach to doing business is advantageous because it can prevent a crisis or a shortage of raw materials or workers at a critical moment. Using the example of McDonald’s, we can assure you that this method is really effective, because the organization remains the leader in its niche for a long period of time. In addition, by integrating Six Sigma techniques, the company manages to control the quality of products and service, which also explains the leadership of the brand.
Reference
Information Resources Management Association (Ed.). (2019). Information diffusion management and knowledge sharing. Breakthroughs in research and practice. IGI Global.