McDonald's gets a taste of future demand with Manugistics roll-out

McDonald's is rolling out a software system that will anticipate customer demand across thousands of European fast-food...

McDonald's is rolling out a software system that will anticipate customer demand across thousands of European fast-food establishments and improve management of food and materials stock levels.

The system, from Manugistics, is already being used in France and Germany where it has reduced costs and helped to make McDonald's existing supply chain more efficient.

McDonald's now plans to roll out Manugistics' advanced Forecasting and Replenishment product in the UK, Sweden and Austria. The fast food retailer then plans to deploy the manufacturer's products in operations throughout Europe's major countries within two years.

Lora Cecere, research director at AMR Research, said, "McDonald's has been a client of Manugistics since the 1990s and the European implementation is the second implementation. The Manugistics suite is one of the most scalable client server or web-based architectures and was selected after due diligence and testing."

Manugistics would not comment on the size of the contract, but Cecere, who is familiar with the deal, estimated that it could have ranged from £220,000 to £660,000 in licences and services.

Thomas Schachner, senior director of global logistics and supply chain integration at McDonald's, said, "Through high-levels of forecast accuracy, supply chain visibility and decision support, we have already achieved payback [on the systems that are deployed in France and Germany]."

The savings came as a result of improved restaurant inventory levels and in-restaurant efficiencies including product and recipe usage yields, reductions in waste, transport and purchasing costs, said Schachner.

"Based on these results across a network of nearly 2,000 European restaurants live today, we shall be rolling out aggressively across the rest of the region," Schachner said.

Cecere said that for companies to implement a demand-driven supply network they need to alter the way they think about traditional supply chains, and be committed to the expectations and requirements of the customer.

"This is a culture that is built upon the ability to listen, respond, and adapt to customers by using organisational resources as a weapon for market competitiveness," said Cecere.

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