2-1 Gaining Competitive Advantage with unique wants and needs.

These segments might be based on buying behavior,

geography, demographics, sales volume, profitability, or expected levels of service.
Competitive advantage denotes a firm's ability to achieve market and
By understanding differences among such segments, a company can design the
financial superiority over its competitors. In the long run, a sustainable competitive
most appropriate customer benefit packages, competitive strategies, and processes
advantage provides above-average performance and is essential to the survival of
to create the goods and services to meet the unique needs of each segment.
the business. Creating a competitive advantage requires a fundamental
understanding of two things. First, management must understand customer needs To correctly identify what customers expect requires being "close to the
and expectations--and how the value chain can best meet these through the design customer. There are many ways to do this, such as having employees visit and talk
and delivery of attractive customer benefit packages. Second, management must to customers, having managers talk to customers, and doing formal marketing
build and leverage operational capabilities to support desired competitive research. Marriott Corporation, for example, requires top managers to annually
priorities. work a full day or more in the hotels as bellhops, waiters, bartenders, front-desk
service providers, and so on, to gain a true understanding of customer wants and
Every organization has a myriad of choices in deciding where to focus its
needs, and the types of issues that their hotel service providers must face in serving
efforts for example, on low cost, high quality, quick response, or flexibility and
the customer. Good marketing research includes such techniques as focus groups,
customization-and in designing its operations to support its chosen strategy. The
salesperson and employee feedback, complaint analysis, on-the-spot interviews
opening scenario suggests that organizations have many strategic choices in
with customers, videotaped service encounters, mystery shoppers, telephone
designing and operating their domestic and global value chains. These choices
hotlines, Internet monitoring, and customer surveys.
should be driven by current and emerging customer needs and expectations. In
particular, what happens in operations on the front lines and on the factory floor- Basic customer expectations are generally considered the minimum
must support the strategic direction the firm has chosen. performance level required to stay in business and are often called order qualifiers.
For example, a radio and driver-side air bag are generally expected by all customers
Any change in a firm's customer benefit package, targeted markets, or
for an automobile. In the highly competitive pizza business, efficient delivery would
strategic direction typically has significant consequences for the entire value chain
be considered an order qualifier. However, the unexpected features that surprise,
and for operations.
entertain, and delight customers by going beyond the expected often make the
Although it may be difficult to change the structure of the value chain, difference in closing a sale; these are called order winners. Order winners are goods
operations managers have considerable freedom in determining what components and service features and performance characteristics that differentiate one
of the value chain to emphasize, in selecting technology and processes, in making customer benefit package from another and win the customer's business. Collision
human resource policy choices, and in making other relevant decisions to support avoidance systems or a voice-activated music system in an automobile, for example,
the firm's strategic emphasis. Papa John's Pizza focused on "better ingredients, better pizza" as the order winner
to differentiate the business from the competitors. Over time, however, order
2-2 Understanding Customer Wants and Needs winners eventually become order qualifiers as customers begin to expect them.
Because the fundamental purpose of an organization is to provide goods Thus, to stay competitive, companies must continually innovate and improve their
and services of value to customers, it is important to first understand customer customer benefit packages.
desires and also to understand how customers evaluate goods and services.
However, a company usually cannot satisfy all customers with the same goods and
services. Often, customers must be segmented into several natural groups, each
2-3 Evaluating Goods and Services them prior to the purchase decision. They experience the service only
when they actually go through the process. This is why many are hesitant
Research suggests that customers use three types of attributes in
to use online banking or bill paying.
evaluating the quality of goods and services: search, experience, and credence!
Search attributes are those that a customer can determine prior to purchasing the Dissatisfaction with services is often the result of customers' inability to
goods and/or services. These attributes include things like color, price, freshness, properly perform or coproduce their part of the service. A wrong order placed on
style, fit, feel, hardness, and smell. Experience attributes are those that can be the Internet can be the result of customer error despite all efforts on the part of
discerned only after purchase or during consumption or use. Examples of these the company to provide clear instructions. The design of services must be sensitive
attributes are friendliness, taste, wearability, safety, fun, and customer satisfaction. to the need to educate customers on their role in the service process.
Credence attributes are any aspects of a good or service that the customer must
These insights help to explain why it is more difficult to design services and service
believe in but cannot personally evaluate even after purchase and consumption.
processes than goods and manufacturing operations.
Examples include the expertise of a surgeon or mechanic, the knowledge of a tax
advisor, or the accuracy of tax preparation software.

This classification has several important implications for operations. For

example, the most important search and experience attributes should be evaluated
during design, measured during manufacturing, and drive key operational controls
to ensure that they are built into the good with high quality. Credence attributes
stem from the nature of services, the design of the service system, and the training
and expertise of the service providers.

These three evaluation criteria form an evaluation continuum from easy to

difficult, as shown in Exhibit 2.1. This model suggests that goods are easier to
evaluate than services and that goods are high in search qualities, whereas services 2-4 Competitive Priorities
are high in experience and credence attributes. Of course, goods and services are
Every organization is concerned with building and sustaining a competitive
usually combined and configured in unique ways, making for an even more complex
advantage in its markets. A strong competitive advantage is driven by customer
customer evaluation process. Customers evaluate services in ways that are often
needs and aligns the organization's resources with its business opportunities. A
different from goods. A few ways are summarized below along with significant
strong competitive advantage is difficult to copy, often because of a firm's culture,
issues that affect operations.
habits, or sunk costs. Competitive advantage can be achieved in different ways such
• Customers seek and rely more on information from personal sources than as outperforming competitors on price or quality, responding quickly to changing
from non- personal sources when evaluating services prior to purchase. customer needs in designing goods and services, or providing rapid design or
Operations must ensure that accurate information is available and that delivery.
experiences with prior services and ser- vice providers result in positive
Competitive priorities represent the strategic emphasis that a firm places
experiences and customer satisfaction.
on certain performance measures and operational capabilities within a value chain.
• Customers perceive greater risks when buying services than when buying
Understanding competitive priorities and their relationships with customer benefit
goods. Because services are intangible, customers cannot look at or touch
packages provides a basis for designing the value and supply chains that create and
deliver goods and services. In general, organizations can compete on five key which in turn lead to lower costs. Thus, a strategy of continuous improvement is
competitive priorities: essential to achieve a low-cost competitive advantage.

1. Cost.

2. Quality.

3. Time.

4. Flexibility.

5. Innovation.

All of these competitive priorities are vital to success. For example, no firm
today can sacrifice quality simply to reduce costs, or emphasize flexibility to the
2-4b Quality
extent that it would make its goods and services unaffordable. However,
organizations generally make trade-offs among these competitive priorities and The role of quality in achieving competitive advantage was demonstrated by several
focus their efforts along one or two key dimensions. For example, Amazon research studies. Researchers have found that:
competes primarily on time, cost, and flexibility. Apple, on the other hand,
• Businesses offering premium-quality goods usually have large market
competes on quality and innovation.
shares and were early entrants into their markets.
2-4a Cost • Quality is positively and significantly related to a higher return on
investment for almost all kinds of market situations.
Many firms, such as Walmart, gain competitive advantage by establishing
• A strategy of quality improvement usually leads to increased market share,
themselves as the low-cost leader in an industry. These firms achieve their
but at a cost in terms of reduced short-run profitability.
competitive advantage through low prices. They do this through high volumes and
• Producers of high-quality goods can usually charge premium prices.
the efficient design and operation of their supply chain. Although prices are
generally set outside the realm of operations, low prices cannot be achieved Exhibit 2.2 summarizes the impact of quality on profitability. The value of a
without strict attention to cost and the design and management of operations. good or service in the marketplace is influenced by the quality of its design.
Improvements in performance, features, and reliability will differentiate the good
General Electric, for example, discovered that design determines 75
or service from its competitors, improve a firm's quality reputation, and improve
percent of its manufacturing costs. Costs accumulate through the value chain, and
the perceived value of the customer benefit package. This allows the company to
include the costs of raw materials and purchased parts, direct manufacturing cost,
command higher prices and achieve an increased market share. This, in turn, leads
distribution, post-sale services, and all supporting processes. Through good design
to increased revenues that offset the added costs of improved design. Improved
and by chipping away at costs, operations managers help to support a firm's
conformance in production leads to lower manufacturing and service costs through
strategy to be a low-price leader. They emphasize achieving economies of scale and
savings in rework, scrap, and warranty expenses. The net effect of improved quality
finding cost advantages from all sources in the value chain.
of design and conformance is increased profits.
Low cost can result from high productivity and high-capacity utilization.
In many industries, strategies often lead to trade-offs between quality and cost;
More important, improvements in quality lead to improvements in productivity,
some company strategies sacrifice quality in order to develop a low-cost advantage.
Such has been the case with new automobile start-ups, especially with Hyundai structure; business consulting; Levi's jeans that are cut to exact Some examples
Motor Co. However, goods quality has evolved over the years and now is generally include Sign-tic company signs that are uniquely designed for each customer
considered to be an order qualifier. measurements; personal Web pages; estate planning; Motorola pagers customized
in different colors, sizes, and shapes; personal weight-training programs; and
Operations managers deal with quality issues on a daily basis; these include
modular furniture that customers can configure to their unique needs and tastes.
ensuring that goods are produced defect- free or that service is delivered flawlessly.
Customer involvement might at the design (as in the case of custom signs),
In the long run, it is the design of goods and service processes that ultimately
fabrication (Levi's jeans), assembly (Motorola pagers), or postproduction
defines the quality of outputs and outcomes.
(customer-assembled modular furniture) stages of the value chain. Mass
2-4c Time customization requires companies to align their activities around differentiated
customer segments and design goods, services, and operations around flexibility.
In today's society, time is perhaps the most important source of
competitive advantage. Customers demand quick response, short waiting times, 2-4e Innovation
and consistency in performance. Many firms, such as CNN, FedEx, and Walmart,
Innovation is the discovery and practical application or commercialization
know how to use time as a competitive weapon to create and deliver superior
of a device, method, or idea that differs from existing norms. Over the years,
goods and services.
innovations in goods (such as telephones, automobiles, computers, optical fiber,
Speeding up processes in supply chains improves customer response. satellites, and cell phones) and services (self-service, all-suite hotels, health
Deliveries can be made faster, and more often on time. However, time reductions maintenance organizations, and Internet banking) have improved the overall
can only be accomplished by streamlining and simplifying processes to eliminate quality of life. Within business organizations, innovations in manufacturing
non-value-added steps such as rework and waiting time. This forces improvements equipment (computer-aided design, robots and automation, and smart tags) and
in quality by reducing the opportunity for mistakes and errors. By reducing non- management practices (customer satisfaction surveys, quantitative decision
value-added steps, costs are reduced as well. Thus, time reductions often drive models, and the Malcolm Baldrige criteria) have allowed organizations to become
simultaneous improvements in quality, cost, and productivity. Designing processes more efficient and better meet customers' needs.
and using technology efficiently to improve speed and time reliability are some of
Many firms, such as Apple, focus on research and development for
the most important activities for operations managers.
innovation as a core component of their strategy. Such firms are on the leading edge
2-4d Flexibility of product technology, and their ability to innovate and introduce new products is
a critical success factor. Product performance, not price, is the major selling feature.
Success in globally competitive markets requires both design and demand When competition enters the market and profit margins fall, these companies often
flexibility. In the automobile industry, for example, new models are constantly being drop out of the market while continuing to introduce innovative new products.
developed. Companies that can exploit flexibility by building several different These companies focus on outstanding product research, design, and development;
vehicles on the same assembly line at one time, enabling them to switch output as high product quality; and the ability to modify production facilities to produce new
demand shifts, will be able to sell profitably at lower volumes. products frequently.
Flexibility is manifest in mass-customization strategies that are becoming 2-5 Om and Strategic Planning
increasingly prevalent today. Mass customization is being able to make whatever
goods and services the customer wants, at any volume, at any time for anybody, The direction an organization takes and the competitive priorities it
and for a global organization, from any place in the world from a standard base sign chooses are driven by its strategy. The concept of strategy has different meanings
to different people. Strategy is a pattern or plan that integrates an organization's development, engineering, etc.) develops to support its particular business
major goals, policies, and action sequences into a cohesive whole. strategy.

Basically, a strategy is the approach by which an organization seeks to Our particular focus will be on operations strategy--how an organization's
develop the capabilities required for achieving its competitive advantage. Effective processes are designed and organized to produce the type of goods and services to
strategies develop around a few key competitive priorities such as low cost or fast support the corporate and business strategies.
service time, which provide a focus for the entire organization and exploit an
2-5a Operations Strategy
organization's core competencies, which are the strengths that are unique to that
organization. Such strengths might be a particularly skilled or creative workforce, An operations strategy is the set of decisions across the value chain that
customer relationship management, clever bundling of goods and services, strong supports the implementation of higher-level business strategies. It defines how an
supply chain networks, extraordinary service, green goods and services, marketing organization will execute its chosen business strategies. Developing an operations
expertise, or the ability to rapidly develop new products or change production strategy involves translating competitive priorities into operational capabilities by
output rates. making a variety of choices and trade-offs for design and operating decisions. That
is, operating decisions must be aligned with achieving the desired competitive
Strategic planning is the process of determining long-term goals, policies,
priorities. For example, Progressive automobile insurance has developed a
and plans for an organization. The objective of strategic planning is to build a
competitive advantage around superior customer service. To accomplish this, its
position that is so strong in selected ways that the organization can achieve its goals
operating decisions have included on-the-spot claims processing at accident sites;
despite unforeseeable external forces that may arise. Strategy is the result of a
"Total Loss Concierge" service to help customers with unrepairable vehicles get a
series of hierarchical decisions about goals, directions, and resources; thus, most
replacement vehicle; and the industry's first Web 2.0 site, with easier navigation,
large organizations have three levels of strategy: corporate, business, and
customization, and video content. To illustrate how operations strategy can support
functional. At the top level, corporate strategy is necessary to define the businesses
competitive priorities, consider two types of business strategies for a manufacturer:
in which the corporation will participate and develop plans for the acquisition and
allocation of resources among those businesses. The businesses in which the firm 1. Produce a well-defined set of products in a fairly stable market
will participate are often called strategic business units (SBUs) and are usually environment as a low- cost leader.
defined as families of goods or services having similar characteristics or methods of 2. Provide high product variety and customization in a turbulent market that
creation. For small organizations, the corporate and business strategies frequently requires innovative designs to meet customer-specific requirements.
are the same.
In the first situation, the firm would be best served by emphasizing quality and
The second level of strategy is generally called business strategy and cost reduction in their make-to-stock strategy. This would require a well-balanced,
defines the focus for SBUS. The major decisions involve which markets to pursue synchronized supply chain approach with strong supplier involvement, efficient
and how best to compete in those markets-that is, which competitive priorities the assembly line final assembly processes, and high work standardization. Some
firm should pursue. equipment and processes might be dedicated to a particular product line or family
of products. In this case, a highly efficient manufacturing system is needed.
Finally, the third level of strategy is functional strategy, the means by which
business strategies are accomplished. A functional strategy is the set of decisions In the second situation, the firm would need to be able to operate at different
that each functional area (marketing, finance, operations, research and levels of production volume while also achieving high quality and flexibility. An
operations strategy based on mass customization would be appropriate.
 Product design would require constant innovation and shorter development manufacturing. The European Union has set targets for reducing emissions to 20
cycles. Operations would need to be highly flexible in a make-to-order percent of 1990 levels by 2020.
environment, producing batches of unique, customer-specified orders in low to
Companies that have embraced sustainability pursue this strategy
moderate volumes, and using employees with high skill levels and diverse
throughout their operations. For example, computer maker Dell Inc. has announced
capabilities.
that it is committed to becoming "the greenest technology company on the planet."
Operations and supply-chain strategy for service businesses is somewhat Such a strategy often requires considerable innovation in value chains, operations
similar to manufacturers but differs in seven unique ways, as described in Chapter design, and day-to-day management. For example, Dell launched a program called
1. In Section 3.6a, we discuss how operations strategy is reflected at McDonald's to Design for the Environment that seeks to minimize adverse impacts on the
achieve its competitive priorities. environment by controlling raw material acquisition, manufacturing processes,
framework encourages Dell's product designers to consider the full product life
How operations are designed and implemented can have a dramatic effect on
cycle, and distribution programs while linking green policies with consumer use and
business performance and achievement of the strategy. Therefore, operations
disposal. This it provides them with a platform for collaborating with suppliers,
require close coordination with functional strategies in other areas of the firm such
supply chain experts, and external recycling experts and other downstream
as marketing and finance.
partners to help them fully understand the environmental implications of their
2-5b Sustainability and Operations Strategy design decisions.

Sustainability is defined in previous chapters using three dimensions- Companies are also paying closer attention to ethical issues of outsourcing,
environmental, social, and economic sustainability. Stakeholders such as the particularly the human resource practices of off-shore suppliers, which may include
community, green advocacy groups, and the government drive environmental unreasonable work hours or unsafe working conditions. Such issues are more
sustainability. Social sustainability is driven by ethics and human ideals of protecting difficult to monitor when control is relinquished to an off-shore manufacturer.
the planet and its people for the well-being of future generations. Economic
2-6 A Framework for Operations Strategy
sustainability is driven by shareholders such as pension funds and insurance
companies. Therefore, sustainability is an organizational strategy- it is broader than A useful framework for strategy development that ties corporate and
a competitive priority. Sustainability requires major changes in the culture of the marketing strategy to operations strategy was proposed by Professor Terry Hill at
organization (see box on General Electric). Templeton College, Oxford University, and is shown in Exhibit 2.3.10 It was originally
designed for goods-producing organizations; however, it can also be applied to
Companies such as Apple, Kaiser Permanente, and Nike view sustainability
service-providing firms. This framework defines the essential elements of an
as a corporate strategy. A majority of global consumers believe that it is their
effective operations strategy in the last two columns-operations design choices and
responsibility to contribute to a better environment and would pay more for brands
building the right infrastructure.
that support this aim. Likewise, retailers and manufacturers are demanding greener
products and supply chains. In 2007, Walmart Stores Inc. announced that it would Operations design choices are the decisions management must make as to
transition toward selling only concentrated laundry deter- gents, which use much what type of process structure is best suited to produce goods or create services. It
less water and therefore require less packaging and space for transport and storage. typically addresses six key areas-types of processes, value chain integration and
Every major supplier in the detergent industry was involved. Government actions outsourcing, technology, capacity and facilities, inventory and service capacity, and
are also driving these initiatives. The 2009 U.S. stimulus package earmarked $70 trade-offs among these decisions.
billion for the development of renewable and efficient energy technologies and
 Infrastructure focuses on the nonprocess features and capabilities of the
organization and includes the workforce, operating plans and control systems,
quality control, organizational structure, compensation systems, learning and
innovation systems, and support services. The infrastructure must support process
choice and provide managers with accurate and timely information to make good
decisions. These decisions lie at the core of organizational effectiveness, and
suggest that the integrative nature of operations management is one of the most
important aspects of success.

Operations design and infrastructure criteria and decisions in Prof. Hill's

strategy framework define the value chain that supports environmental, social, and 2-6a Operations Strategy at McDonald's
economic sustainability. McDonald's Corporation is the world's leading foodservice retailer, with
A key feature of this framework is the link between operations and sales of almost $23 billion in more than 32,000 restaurants in 117 countries,
corporate and marketing strategies. Clearly, it is counterproductive to design a employing 1.6 million people." The company's vision provides the basis for its
customer benefit package and an operations system to produce and deliver it, and strategy:
then discover that these plans will not achieve corporate and marketing objectives.
This linkage is described by the four major decision loops illustrated in Exhibit 2.4.
Decision loop #1 (shown in red) ties together corporate strategy which establishes
the organization's direction and boundaries-and marketing strategy which
evaluates customer wants and needs and targets market segments.

The output of red loop #1 is the input for green loop #2. Decision loop #2
(green) describes how operations evaluates the implications of competitive
priorities in terms of process choice and infrastructure. The key decisions are "Do
we have the process capability to achieve the corporate and marketing objectives
per target market segment? Are our processes capable of consistently achieving
McDonald's vision is to be the world's best quick-service restaurant
order-winner performance in each market segment?"
experience. Being the best means providing outstanding quality, service,
Decision loop #3 (blue) lies within the operations function of the cleanliness, and value, so that we make every customer in every restaurant smile.
organization and involves determining if process choice decisions and capabilities To achieve our vision, we focus on three worldwide strategies:
are consistent with infrastructure decisions and capabilities. The fourth decision
1. Be the Best Employer
loop (yellow loop #4) represents operations' input into the corporate and marketing
strategy. Corporate decision makers ultimately decide how to allocate resources to • Be the best employer for our people in each community around the
achieve corporate objectives. world.
2. Deliver Operational Excellence
• Deliver operational excellence to our customers in each of our
restaurants.
 3. Achieve Enduring Profitable Growth franchised McDonald's and Partner Brand restaurants. McDonald's is committed to
• Achieve enduring profitable growth by expanding the brand and franchising as a key strategy to grow and leverage value chain capabilities. Over 75
leveraging the strengths of the McDonald's system through innovation percent of McDonald's restaurants worldwide are owned and operated by
and technology. independent businesspeople-franchisees.

McDonald's also defines its "Values in Action" policies, program, and practices, The core competency to profitable growth is maintaining low-cost and fast
which is basically "doing the right thing." In its Corporate Responsibility Report, it service. To support this strategy, McDonald's has many operational decisions to
defines the following four sustainability initiatives: make, such as: Does it adopt an assembly-line approach to process design? Does it
standardize store design to make process flow, training, and performance
• Build a sustainable McDonald's that involves all facets of our business. For evaluation consistent among stores? Does it standardize equipment and job design
example, McDonald's is developing an environmental scorecard that drives work activities? The french fryer equipment and procedure are a good example of
greater awareness of resource use (energy, water, air emission, and waste), standardizing equipment design. There is "only one way to make french fries" in
with the ultimate goal of reducing the environmental impact of its supply 32,000 stores worldwide, and this contributes to consistent goods quality, fast
chains. service, and a standardized training program. Likewise, ordering by the numbers
• Commit to a three-pronged approach-reduce, reuse, and recycle. For and digital print- outs of customer orders in the drive-through improves order
example, 82 percent of McDonald's packaging is made from renewable accuracy and speed of service. Of course, the entire human resource function is
materials. In some global markets, McDonald's delivery trucks use their built around the needs of the McDonald's value chain and operating systems.
own reprocessed cooking oil for fuel. McDonald's has been identified as one of the best places to work by Fortune and
• Strive to provide eco-friendly workplaces and restaurants. Better recycling The American Economic Review. Examples of supportive infrastructure include
efforts have diverted over 58 percent of waste normally targeted for a good hiring criteria, recognition and reward programs, training, and promotion
landfill to other recycling uses. Green facilities have been built in countries criteria.
such as Brazil, Germany, and France.
• Work with suppliers and outside experts to continuously improve A second corporate objective is operational excellence. The ultimate objective
purchasing decisions and evaluation of supplier performance regarding of operational excellence is satisfied customers. Operational excellence includes
animal welfare. Animal welfare scorecards and supplier audits in addition value chain, process, equipment, and job efficiencies, as well as superior people-
to better designs of animal-handling facilities are two examples of this related performance-all focused to support the service-encounter level.
initiative. McDonald's strategy is to deliver exceptional customer experiences through a
combination of great-tasting food, outstanding service, being a good place to work,
McDonald's also actively participates in social media platforms to share profitable growth, and consistent value. McDonald's service goals also include
information about its sustainability policies and initiatives. extended or 24-hour service to make McDonald's the most convenient food-service
What is the CBP that McDonald's offers? Exhibit 2.5 shows the CBP, in which choice for customers. To put sparkle in McDonald's service, initiatives include
goods and service content (food and fast service) are equally important to the training for the unexpected and keeping it simple.
primary mission, and are supported by peripheral goods and services.

Exhibit 2.6 illustrates how Hill's strategy framework can be applied to

McDonald's. One corporate objective is profitable growth. The marketing strategy
to support profitable growth consists of adding both company-owned and
 McDonald's supports its social responsibility objective with over 200 Ronald
McDonald House Charities. Social responsibility activities also include funding
immunization programs for 1 million African children, Olympic youth camps,
disaster relief, and sponsored mobile health centers in underserved areas. Other
corporate objectives not shown in Exhibit 2.6 include a high return on investment,
exploring nontraditional locations for stores, and commitment to the environment.

Competitive priorities are derived from McDonald's vision statement and

strategy. The ranking in Exhibit 2.6 reflects their importance. The competitive
priorities tie the corporate and marketing strategies to the operations strategy. The
competitive priorities provide direction on key operations-strategy issues listed in
A third corporate objective is leveraging innovation and technology capabilities.
the last two columns of Exhibit 2.6.
In the United States, McDonald's has 40 distribution centers to support more than
12,000 restaurants and about 350 suppliers. More than 2,000 safety and quality
checks surround McDonald's food as it moves through its supply chains (from farms
to restaurants). Information technology is used to coordinate the activities of
McDonald's value chain.

Another corporate objective is developing and maintaining a diverse workforce.

Diversity at McDonald's means. understanding, recognizing, and valuing the
differences that make each person unique. Hamburger University, located in Oak
Brook, Illinois, has trained over 275,000 managers in 22 different languages and
also manages 10 international training centers in Australia, England, Japan,
Germany, and elsewhere.