Supply chain management deals with regulating the processes related to storing and distributing materials across the entire chain (Meng 3). These processes involve the participation of manufacturers, suppliers, distributors, and retailers. The cornerstone of supply chain relationships is “inventory movement and storage” (Esper and Waller par. 1). Effective inventory management can be considered the key to “supply chain management excellence” (“Five Strategies for Improving Inventory Management” 1).
The efficient management of inventory across the supply chain directly depends on the effectiveness of the employed principles and strategies. One of the most effective strategies for managing inventory is providing efficacious communication between the distributor and the supplier. Such a strategy helps to avoid such potential inventory problems as having too much of some products while experiencing stock-outs of other products.
The successful distributor should have a well-developed and efficacious system of controlling the number of stored products and be aware of the demand for them to be able to regulate the amount of supply he needs. Besides, if some products are no longer popular in one market, effective communication with other distributors can help to advertise the availability of certain material and successfully dispose of it (Schreibfeder 4).
Efficient inventory management also requires a careful choice of an appropriate location. The distributor should pay much attention to selecting the appropriate area of location for inventory storage, as choosing locations that are far from suppliers and manufacturers require spending additional cost for logistics. Sometimes these costs can be too high. Therefore, careful planning of activities involved in the transportation of the products is of vital importance for reducing the possible inputs and increasing potential revenues.
Location influences a customer’s “travel time” (Collier and Evans 121). Therefore, a location can be considered an essential competitive priority in a service business. McDonald’s restaurants can serve as an example of effective choices on facility location. The company strives for maintaining continuous demand for its services by ensuring the convenience of the location of millions of its restaurants. As the company ensures its international presence by selling franchises, it has developed a policy for location requirements to ensure providing appropriate conditions for customers all over the world. The company regard the location of each restaurant as one of the main contributors to its future profitability
The main positive aspect of the location and site selection of each of McDonald’s fast-food restaurants is convenience. The company considers convenience and accessibility to the main priorities of its location policy. Due to the McDonalds franchise location policy, a corner location is considered the most appropriate (Thompson par. 3). Such location allows putting up the signs that are visible from two streets. Therefore, such a location can help the unit to attract more potential clients.
A site near “a major intersection with traffic signals” is also regarded as an optimal choice for the restaurants (Thompson par. 3). Such a location is also able to stimulate the flow of customers. Each of the units should have ample parking space, which also creates additional convenience to the restaurant. Besides, the company has restaurants in malls, airports, and other places where a huge number of people gather every day.
Such choice also seems to be rather successful, as malls and airports are visited by millions of people every day and often become the places where people need to have a quick breakfast or lunch. The only negative aspect of such site selection is the noisiness of such places. The company’s location strategy appears to be rather successful and has helped it to earn the reputation of one of the most customer-driven fast-food chains.
Collier, David, and James Evans. Operations Management. 5th ed. 2014. Boston, Massachusetts: Cengage Learning. Print.
Esper, Terry, and Matthew Waller. The Role of Inventory in Supply Chain Management. 2014. Web.
Meng, Yue. The Effect of Inventory on Supply Chain. 2006. Web.
Schreibfeder, John. The First Steps to Achieving Effective Inventory Control. n.d. Web.
Thompson, Molly. McDonalds’ Franchise Location Requirements. n.d. Web.