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USER PERSPECTIVE

Vikram Bakshi, managing director & joint-venture partner, McDonald's India (north & east), talks about global standards.

What are the problems in logistics you face?

Prior to McDonald's arrival in India, the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in predetermined and stringently enforced climatic and hygienic conditions was at a very nascent stage of development.

For five years prior to opening our first restaurant, McDonald's pioneered the effort to develop this Cold Chain so that our high standards could be met. This concept has today been adopted by various Indian and international players to deliver the quality produce which are as good and fresh to consumers. The Cold Chain in India is still under developing phase and McDonald's with its key logistics partner is continuously working towards enriching the existing setup.

Our supplies are managed by fleet of refrigerated vans which adopt roads as the means to reach out to our restaurants. The octroi checkpoints and entry timings of various states vary and increase the overall time-span spent on road thus reducing the overall efficiency of the supplies. Currently the infrastructure especially road network is an area of concern, and we are witnessing a gradual improvement in its condition.

How do you combat these logistics problems?

We have developed our own Cold Chain which keeps pace with us as we grow. Radhakrishna Foodland (RKFoodland) has been partnering us at every step in this process.

Apart from developing a cold chain we have formulated the solutions that have been made based on the existing infrastructure setup to maximize efficiencies.

What is the supply chain from factories to retail outlets/stores?

In 1990, six years before the opening of the first McDonald's restaurant in India, McDonald's worked closely with local Indian companies to develop a logistics model that would meet McDonald's stringent quality standards throughout the Cold Chain.

Setting up this extensive cold chain distribution system was an extensive effort that involved transfer of state-of-the-art food processing technology by McDonald's and its international suppliers to pioneering Indian entrepreneurs, who are today an integral part of the cold chain.

We have imparted technical training to all our suppliers on how to operate the imported machineries, instilled the McDonald's philosophy of Quality, Service, Cleanliness and Value (QSCV). We have ensured that our suppliers understand the core values of providing standardised food to our customers.

Our suppliers maintain the stringent quality check on the products that they supply us in accordance to the international standard maintained by McDonald's world over. So, in spirit our suppliers are like global suppliers.

McDonald's invested about Rs 400 crore even before our first restaurant commenced operations on October 13, 1996, to ensure we had backend linked up to the farm level to ensure delivery of our commitment.

How many factories do you have and in which locations?

McDonald's India has partnered with local suppliers and works extensively with them to ensure the McDonald's standards are maintained at every step.

We have more than 90 per cent of our supplies that are procured locally. Our major suppliers are: Vista Processed Foods "� Taloja, Maharashtra "� Chicken & Veg Patties, Amalgam Foods "� Cochin, Kerela "� Fish Patty, Mrs. Bector's Foods "� Greater Noida , Buns, Dynamix Dairy "� Baramati, Maharashtra, Cheese, Meena Agritech / Trikaya Agriculture "� New Delhi / Pune "� Iceberg Lettuce, Distribution Centers "� Noida / Kalamboli (Maharashtra) / Bangalore/ Kolkata.

How much of logistics is in-house and how much is outsourced?

McDonald's India has dedicated SupplyChain team that oversees all purchase pricing functions. The team work s closely with the RK Foodland which undertakes responsibility of ordering, storing, shipping and inventory management on day to day basis.

Who is it outsourced to and why?

McDonald's logistics handling is an outsourced function, undertaken by RK Foodland, who has pioneered the logistics management under key guidance from McDonald's International resources. RK Foodland was selected because they aligned with our vision of 100 per cent customer satisfaction and quality assurance.

What is the transport mix? Trucks, railways, etc.? Depending on the transport mix,how many trucks, etc., required for transportation every month/quarter?

The refrigerated vans operating for McDonald's at present for transportation of its pre-cooked, raw food materials are listed below:

National Inbound - Supplier to DC: 20 vehicles+02 for Kolkata=22 Vehicles.

Outbound North - DC to store (7 Multi-Temp, 6 Single temp) Outbound West - DC to Store (5 Multi Temp, 6 Single temp) Outbound South - DC to Store (01 Single Temp) Proposed Kolkata- DC to Store (01 Single Temp).