McDonald’s on its vendors: ‘Test, reward, and share’ By Allie Williams

McDonald’s on its Vendors: ‘Test, reward, and share’

By Allie Williams

Companies are looking harder and harder at their supply chains. Case in point: Francesca DeBiase, vice president, Strategic Sourcing and Worldwide Supply Chain Management at McDonald’s Corporation, notes three recent innovations McDonald’s is using—and that other companies may want to emulate:

1. Testing vendors.
McDonald’s wants to go to sustainable beef by 2016; obviously that’s a big project and a tough goal to meet. “We will need to be able to trace beef from beginning to end,” said DeBiase.

Idea: Test countries with an initial project. That way, they can see if they get the information they need to trace the supply chain, and thus get the sustainable beef they want. “We want to know what the countries’ plans will be, and [how we will] work together to map out how to get this done, and test it in the real world,” she said.

2. Vendors apply for “Best of ….” awards. McDonald’s is looking to reduce waste. “Packaging, after beef, is our second priority,” she explained. “There’s the consumer side of waste, so it’s the packaging that the consumers see. Do we need to have the same amount of packaging for someone who goes through the drive thru as someone who eats in the restaurant? If we reduce the amount of packaging we use, we will have a positive sustainability impact and save money. The difficult part of this is that 70 percent of our consumers are going to the drive thru – so what happens to that material? Waste cycles are very local. We need to educate consumers on how to reduce the amount of waste.”

One way is to get the vendors involved in coming up with ideas: To do that, McDonald’s initiated an award called, “Best of Sustainable Supply.” DeBiase continued: “Working with
 the supply chain is one of our biggest strengths. We believe that we have a competitive advantage by having long term relationships with trusted suppliers – working on a handshake, being transparent – so we have a collaborative effort for our solutions.

“We have an environmental scorecard for all the major food categories, so the suppliers complete the scorecard and send information on water, waste, air and energy. It’s a continuous improvement process [and] allows them to compare their
own facilities around the world, as many of them are global suppliers. Many have zero waste initiatives. We started rewarding suppliers for what they do. [We have received] over 500 entries from suppliers this year. We bring them together for a ceremony each April and it means a tremendous amount to them, as they take great pride in this award.”

3. Assembled purchasing committee of influence franchisees.“This is a group of some of our best operators from select restaurants around the world,” DeBiase said. “They come together to deal with the cost impact of key stakeholders – in this case, franchisees. The committee is formed to share strategies around specific categories, such as beef, poultry, potatoes, bakery, distribution, waste, packaging, etc. Then these committee members go back and share the story, and with added credibility, since they are closer to the other franchisees, so it’s not just coming from on high.”

Allie Williams is the executive director of the Corporate Responsibility Officer Association.
Posted April 28, 2014 in 25115