The Challenge:

• Taste must be the same in all the outlets, yet all the products used must be secured locally.

One of the most unique McDonald's outlets was the 700-seat McDonald's in Moscow. McDonald's wanted the Big Mac to taste the same in Moscow as it did in New York, Paris, or Sydney, yet it wanted all food products to be secured locally.

McDonald's prepared for this challenge by planning the supply chain for the Moscow restaurant six years in advance, when its experts began to work with Russians to upgrade their production standards to supply the desired quality of meat, wheat, potatoes, milk, and other basic ingredients.

Supplier location was an important part of the supply chain at McDonald's, and past experience had shown that what worked best was a combination of a number of independently owned-food-processing plants dedicated solely to supplying McDonald's restaurants.

This type of centralized system, called a food town, reduced both transportation and material handling costs. A $60 million food town was established in Russia that combined a bakery, meat plant, chicken plant, lettuce plant, fish plant, and distribution center.

Each of these processing facilities was independently managed, but all shared cooling and freezing facilities with the distribution center. To maintain the standards of quality & customer service; McDonald's located dedicated processing facilities. The system also reduced capital set-up costs, inventory and material handling costs, and distribution costs.