For the moment there is no central ERP system. This is being looking at as part of a global initiative. Locally there are a variety of systems and databases, although the financial system is at the heart of its dealings, with various bolt on modules to meet local needs.

“We’ve always known we may have to replace this so the modules we’ve developed can be re-used and it shouldn’t be a big deal. Meanwhile we face the dilemma of keeping our systems active while we wait to hear about the global initiative,” says information services manager Peter van Dyk.

Eventually all suppliers will need to have some form of connectivity but until a scoping exercise is complete its not known what else would be required. Dealing with partners the size of Coca Cola is unlikely to present too many difficulties and for smaller suppliers, once connectivity is in place, McDonalds is likely to supply any missing links to get them talking to its network.

“It is now becoming more imperative to review our business processes to see what system will best address our needs,” says Mr van Dyk.

Part of that will focus around McDonald’s co-owned distribution centers in Auckland the South Island, which have their own logistics and distribution systems to deal with suppliers of raw materials for the restaurant chain. The company is now in the planning stages of a restaurant network or extranet to disseminate key information and help rationalise the supply chain to get suppliers more involved.

“We’re a strange customer, in that we expect our raw product suppliers to give us stuff at the least cost without holding stock but to never run out. Obviously if we run a promotion we can’t suddenly ask them to grow more lettuce by tomorrow. On the other hand we don’t give then quality information to understand our requirements. We don’t have the systems in place so we’re addressing this big time,” says Mr van Dyk.

McDonalds is also looking at putting in an electronic invoicing system that will be integrated into its network. Initially we’ll scan in invoices and use workflow to improve the approval process. We’ll look at standardizing the format in the next phase,” he says.

Ultimately all suppliers will become part of McDonalds extranet with the goal of getting more accurate information and trends and keeping costs down. “If we can get accurate information about yearly trends and the effect of promotional activity the theory is the supplier will be able to rationalize their business and avoid stockpiling. It’ll allow us to be more intelligent and reduce costs throughout the business,” says Mr van Dyk.

By Keith Newman
August 2002