McDonald’s “Secret Sauce” for Supply Chain Success

This is an excerpt of the original article. It was written for the December 2016 edition of Supply Chain Management Review. The full article is available to current subscribers.

December 2016

It’s December and thus time once again for our annual “Executive Guide to Supply Chain Resources.” This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain in the coming year.

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Is there a “secret sauce” for consistent supply chain success? McDonald’s—which is consistently ranked in the top echelon of supply chains by Gartner—thinks so.

Gartner’s influential rankings of the top supply chains for 2016 once again has McDonald’s occupying the No. 2 spot. In fact, the company has occupied the No. 2 slot since 2013 and has been entrenched in Gartner’s top 10 rankings since 2011.

So what is the secret sauce? According to McDonald’s, it is creating long-term supply chain success based on a “System” where everyone wins. University of Tennessee researchers studied McDonald’s System as part of its research into what is known as the Vested business model. McDonald’s relationships with its suppliers embodies the Vested mindset of expanding the pie and sharing the pie. Suppliers that help McDonald’s succeed also succeed by building their own businesses. Both McDonald’s and its suppliers create value rather than simply exchanging value, as in conventional transaction-based relationships.

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