Application of IT in the food and beverage industry - Increasing performance and leverage of innovation

MIS in F&B focusing in performance and innovation management

1. IT for Managers Assignment: Application of IT in the food and beverage industry

2. I. DESCRIPTION OF MCDONALD’S ORGANIZATION 1. McDonald’s introduction 2. Brief on the fast-food chain in which McDonald’s operates II. THE IMPORTANCE OF IT IN THE FOOD AND BEVERAGE INDUSTRY 1. The tangibility benefits of IT 2. The intangibility benefits of IT 3. How does McDonald’s increase their competitive advantage with IT III. IT APPLICATIONS IN THE FOOD AND BEVERAGE INDUSTRY 1. Packaging: Happy Meals deliver 3D fun with innovative packaging 2. Preparing: Order Ahead Lane and Ready On Arrival 3. Double Down on the 3 D's: Digital, Delivery and Drive Thru 4. Automated serving IV. BENEFITS OF USING IT FOR MCDONALD’S RESTAURANT OWNERS AND CUSTOMERS 1. Revenue increase and cost optimization: 2. Enhance customer experience and retention: 3. Effective inventory management with E-Procurement: 4. Error and risk minimization in the operations: V. DRAWBACKS OF USING IT FOR RESTAURANT OWNERS AND CUSTOMERS 1. Security issues of IT systems: 2. High initially implementing cost: 3. Decline in customer contact point and relationship management: 4. Difficulties in system utilization for certain types of customers. VI. CHALLENGES OF USING IT IN THE FOOD AND BEVERAGE INDUSTRY 1. Information system Security and Control challenges 2. System Quality & Ensuring System Quality challenges. OUTLINE

3. I. MC DONALD’ S INTRODUCTION

4. I. MC DONALD’ S INTRODUCTION Product

5. I. MC DONALD’ S INTRODUCTION Product McDonald's predominantly sells hamburgers, various types of chicken, chicken sandwiches, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. On a seasonal basis, McDonald's offers the McRib sandwich.

6. I. MC DONALD’ S INTRODUCTION

7. I. MC DONALD’ S INTRODUCTION

8. I. MC DONALD’ S INTRODUCTION

9. II. THE IMPORTANCE OF IT IN THE FOOD AND BEVERAGE INDUSTRY Replace manual labor by saving time and cost Support to marketing strategy Help company move fast and make great progress Enhance existing customers’ experience and attract new customers The tangibility benefits

10. II. THE IMPORTANCE OF IT IN THE FOOD AND BEVERAGE INDUSTRY Help in decision making and resource management Make the job of employees more straight forward, alleviate pressure Catch up with complex environment and societal changes Offer faster customer service The intangibility benefits

11. III. IT APPLICATIONS IN THE FOOD AND BEVERAGE INDUSTRY Packaging: Happy Meals deliver 3D fun with innovative packaging Happy Meals was created in the late 1970s specialized in kids’ marketing with several promotional gifts to kids. During the 1980s, McDonald’s turned the Happy Meal from a promotional item into a permanent menu item and the boxes are always their concern as “The boxes were complicated. In order to retain the Happy Meals attractiveness after decades, McDonald’s applied 3D innovation to its traditional Happy Meal boxes by introducing Shrek Happy Meal box with integrated 3D glasses which was inspired from the movie series “Shrek”.

12. III. IT APPLICATIONS IN THE FOOD AND BEVERAGE INDUSTRY Preparing: Order Ahead Lane and Ready On Arrival In December 2022, McDonald’s began testing a new restaurant concept for customers who are on the go. The first location of this opened in Fort Worth, Texas features an Order Ahead Lane, which is different from a typical drive-thru. Customers can use the McDonald’s app to place an order before they arrive, and then pick up their meal from a food and beverage conveyor belt. Now, McDonald's has just gone live a new technology called “Ready on Arrival” on 20 March 2023 by adding new functionality on its mobile orders integrating geofencing technology to support its staff prepare for order in the meantime the customers are getting close to the restaurants. Digital orders represented more than a third of McDonald’s orders in its six largest global markets in the fourth quarter, executives told analysts in January.

13. III. IT APPLICATIONS IN THE FOOD AND BEVERAGE INDUSTRY Double Down on the 3 D's: Digital, Delivery and Drive Thru T he Company will animate the McDonald’s in different ways: Maximizing Marketing, committing to the Core and Double Down on the 3D’s (Digital, Delivery and Drive Thru) which leveraged competitive strengths by building a powerful digital experience growth engine that provided a fast, easy experience for our customers.

14. III. IT APPLICATIONS IN THE FOOD AND BEVERAGE INDUSTRY Double Down on the 3 D's: Digital, Delivery and Drive Thru Digital MyMcDonald’s was announced as a new digital experience growth engine to transform digital offerings across drive thru, takeaway, delivery, curbside pick-up and dine-in. The Company’s digital sales exceeded $10 billion or nearly 20% of Systemwide sales across its top six markets in 2020. 2. Delivery Delivery and the use of app is booming during COVID-19 which has illustrated the competitive advantages of McDonald’s. This is absolutely an advantage for McDonald’s to meet customers in terms of speed and convenience. 3. Drive Thru McDonald's tested new concepts and technology to make the customer experience faster, therefore, maximizing the advantage of its strong drive thru presence. This includes Automated order taking, a new drive thru express pick-up lane for customers with a digital order; and a restaurant concept that offers drive thru, delivery and takeaway only.

15. III. IT APPLICATIONS IN THE FOOD AND BEVERAGE INDUSTRY Automated serving Self-service kiosk * Self ordering kiosks are one of customized made self service kiosks designed to meet the specific self service need of restaurants. * Restaurant Ordering kiosk with touch screens and integrated hardware for cashless payment processing, reduce queuing and checkout time, interactive experience increases order process efficiency and provide convenience for diners and waiters. Order prediction: Predict menu offering to drive sales. McDonald’s has been testing a solution that recognizes the license plate of customer in the drive-thru and uses that information to provide AI-based recommendations of menu items. McDonald's AI voice ordering McDonald’s is testing a new AI ordering system to automate McDonald’s drive-thru order-taking experience due to consumer demand for drive-thru has been at all-time high and hospitality brands nationwide are struggling to fill open positions.

16. IV. BENEFITS OF USING IT FOR RESTAURANT OWNERS AND CUSTOMERS Revenue increase Velocity Growth Plan in 2017 increased 4.8% of direct sale & 5% of drive-thru service Mobile ordering app brings USD18bil earning (60% upsurge in digital revenue over 2020) 2. Cost optimization Automation RPA technology which help in cutting unnecessary cost AI to propose a menu could result in operational cost and sale lost reduction 3. Enhance customer experience and retention Implement cutting-edge technology in selling counters allows to take orders from the table Improved online and mobile ordering capabilities and offer free Wi-Fi For retaining loyal guests, “ MyMcDonals ” in 2017 enriched individual customer to more targeted proposal 4. Effective inventory management with E-Procurement Faster procurement cycle, lower transaction costs Reduce stock, including those that have expired. Improve supply chain management and data management. Assisting businesses and organizations in purchasing higher-quality goods. 5. Error and risk minimization With Kiosks self-ordering system, e-menu containing trendy items suggested by AI, smart delivery service, personalized reward application, McDonalds can take advantage to overtake problematic barriers successfully, reduce almost possible fault in serving circle McDonald invested in IT system to build up many management program that determine to help associates and managers observe and control data more effectively +

17. V. DRAWBACKS OF USING IT FOR RESTAURANT OWNERS AND CUSTOMERS Security issues of IT systems Due to inadequate access supervision, McDonald's Korea left a copy of the backup file with the personal information of its franchise and McDelivery customers exposed via file-sharing protocols High initially implementing cost In 2019, McDonalds invested 300 million US dollars and another 3.7 million to purchase Dynamic Yield company and a mobile app developer Plexure They sold off the tech companies due to many reasons 3. Decline in customer contact point and relationship management CRM solutions are unable to fulfill the needs of organization which they require a system that can keeps track of activity data and advises in order to close deals as winners Reduces the interaction with customer in real time to collect the utmost exact references - 4. Difficulties in system utilization for certain type of customer. For elderly guests, it would be complicated and difficult to use with many steps to function and tools on the complex interface due to their old awareness and habits Phone apps require user to check and update to new version can be another barrier company need a throughout training program to educate staff in details of how to use the state-of-art technology

18. VI. CHALLENGES OF USING IT IN THE FOOD AND BEVERAGE INDUSTRY Issue: McDonald’s is the latest high-profile company to be affected by a data breach, leading to the exposure of private information of customers and employees in South Korea and Taiwan. Proposed solution: Development of a culture of "risk understanding". All levels of employees need to be aware of how their choices and actions affect the risk to the company so they could acknowledge better in IT security protection Build up procedures, security policies and any technical measures to deter potential thefts, unauthorized access, alterations or physical damage to system Have risk management policy to react to problems and security plan to ensure that company has everything in place while business is running Issue: 1. McDonald’s app related issues. Rank 2.1 (by 1.700 users) in Apple Store preview. Outages: There’s time the App down Payment: Twice charge or payment made but the restaurant closed. Usages: Difficult to use Order: App stuck on old order 2. McDonald’s AI voice ordering tests underperforming on accuracy. McDonald’s drive-thru voice ordering accuracy rate at 24 Illinois restaurants was in the low 80% range, which is below the 95%-plus order accuracy rate the company wants before broader adoption Proposed solution: Use software metrics as objective assessments to evaluate system. By using metrics, the information system depart. can work with end-users to measure the performance of the systems and identify potential problems. Conduct various testing stages to discover the errors and make changes. Information system Security and Control challenges System Quality & Ensuring System Quality challenges

19. THANK YOU!