waRvaRD| BUSINESS |SCHOOL 9907-414 McDonald’s Corporatio Supply Chain Managing a Sustainable Jn Jaunry 27 rank Marcheto, NeDona' Ser Vie Preset of Worktwie Supply Chin requmed his oie fm 4 mocing Bh Bob Lange, Vice Prdentof Corporte Soa [esptiny(CSR). Msqoto haa approved te formato tan neal Susinble Supply Chan Working Croup @SCWC) a he suns of 206 to "dovelp the sates and tol ecsst sompish McDonal's veion of susie souing” Lange 3 co leade of he SSCNG. ed st ‘Bzcste the groups preliminary Hndigs ih Mascot, ‘As dese int en! Worldwide Corporate Responsbity Rept and ners docu, McBeal envsone x sutinbe ply chain tat play sil high-usy afe predcts ‘ith supply inrrpton whe cestng «net beet for empovees Ther communities oder and te eitnment™ The SSCWG bebeved tut MeLonas exsing ststaable Sippy chain sf el the esautane nds; weer Bals iented many ies MEDORA {ellocededtaddze in onder tachire its on Muschato gio withthe SSCs apteanert He kw tat MeDonals ad sucess ‘nce ayo supplies nine soa eormetal ad ania wee pacts Ih fates he ook pea tthe tp urls od een ken with Cagis moe sup, Protect the Amazon ain fest ih Br rm desracien by soe fring. He an ote inthe Eman hoped hat by ndentnding the clean chalnges and opportune, MDa ould teil ht sce an proactively purse etdonpof ter nt ors La the roe Ne ‘ht a worldwide spy cain management eld ae to answer some cl ques How shoul! MeOorakts pritize suanabiliy relave 40 other supply chal goat (eg ensuring hod salty ane miming ore? = How shoud MeDonls recone diferent sstsnabty expectations ae pines around ‘hemor with tenders at al pacts sometimes impat he bal rae? = How should MeDonsld nga suppers acts and other stakeholder i ts ustalable sippy in ese?aang Stine op ‘As Muschstoguent out his window on an usally warm Jus day he pore hee questions and remembered founder ay Kew’ dese" Whatever we are dingo, We can do ‘McDonald's Supply Chain History! ay Kio, founder a st CED ofthe McDonal's Corporation, opaned the gin MeDonai's ‘ranch n De Ploy Mt 1585 Tom fe Begining he soup buld an orate Pp ‘Sain syten for povang restart busines, Elie mov eonteiprasyfassod facets ‘no pied sic by marking up the goods they reed the ranches fo buy, Kot ‘ign McDonald's intrest with stance” by prfting tom excelent resturant operates, He rfaed all ite and specal favors fre by supply insted, he focused cick on Securing the coven sup, excelent uals and volte ping tat wuld iat sucess In ‘heresurnts Kroc and his af made other supply ein inovatins. Unie other food eters atthe tine, MeDaml’s established sit sangins forthe ingens and appesance of each product MéDorald’ sia ofen sisted suppers ethout ening wo enou ther compliance. Kive {tenant thse spl ht could ho cater provide high quality ai dite vice ut ‘rtewnnded thse at id wi ysly ad volume tnt Re made RS Supls partes ns {que or fat oe gresaes| Success “ogees with ver 5800 independent one operators eho own and operate mae than 7% of a NED restaurants), MeDunal's eres mote tan 50 rilion peep daly in vee 30700 Testarant in 118 courte Total return sles i 208 of $343 ion ade it the Ingest feoserie ear the wld (se ExMbI 1 for hsinal ancl inormation. ‘MeDonali's spice an intel pst of ts succes. Honorary Chsrman and fmt ‘CHO Fred Turner harcteaed Mebonisaperations sea thesegze Sl, wh the employees fener operator and supplies othe te ge ae with to al hee are esse andl ee fave toe song and balan to succead”Js Heed, Vie Presiden of Purchasing for ongtine ‘plies Est Bal Bakery ope that ha aay Ben clabrative approach The thre epee ZL excly how tein ely work ogee Bs not ast we preety bays were fot eieback they ve gous" Suppers nt et McDonald's dads a acepnd the roe of partes Nave band: Many cy ppl tha dd buss wll Rave oa haha hve owe ts MeDerls rm al ‘Nistap to lndsty leaders tsMeDonalisrertaurants spent more han 8b on purchases of asta Wade Crue eri ep “yy rat pia a, SB hc ser a Bt Ba ten te em meons opin Manping Se Sepp Cn soa foo paper and toys in 205 sour net purchase inched bea cicken, och, ad daly rout but the fltive sas of pusher shit ae ew prot are iiraced nd customer rseence change. Complexity A slobal supply shin of this sie comes wih not only sigan purchasing power bt abo tremendous managenen cmplesy. in MeDosl’s Nighy decnlie sctoe, manages at ory lev stave fo support tise who rewe the cistomar: rotauent manages ‘Ster/operntors. Tis dcntlizaion i glded bys concep rece atcustd by MCDewaes osslont ihn» fomoncrk The thewerk. provides ase of pubes to strengthen MeDocali' operational exclence and band sound the werd Uy seing standards foe, among ‘ther things product ngedent estaurat leis, and ase of he Glen Aces ogo Freedom “pple toeveything el bse onthe bt at how oes decstrer aes Paton In prac, hb headguaters sts he paramos ad performs functons that verge he sale the etire sar ut daft deltone 19 oe Ine managers Area ofthe World (ROW) Kars manage MeDonals Europe MeDoalds Non Amr, MeDonals Latin Ames, nd Dual’ Aa Pace Mae Eat Aes (APNEA) laws Ihe mA-conpoatns. Win AQT, atonal eg, McDonalds Bra) snd ssmetinee sasnasonl (eg, MeDoealds US. Eastern Dison lenders have considerable autonomy guide snd sere the restaurants. Restaurant anages dd owner/operator ave Un uta respority serve the castor, Supply chi management Sits bx hi “redor within a framework” structure. A global overs m, he McDuna’ Supply Leader Bard SLE) termine he ametok edad {S'dinne bey supply chin management sctiies. The SUB nes Macht te four AOW ‘ply chain nado nd McDonalds Corporate Vice Pein’ of Quay. The SUB 5 report {othe supply chain ode! McDanal' ssa wel a gh stats or ua, usies Plies, ‘na practices ened othe spay cin. Lack AOW supply ca managerent am ovens AOW andar and pcs tht lt pon thee at Be gia level They slo suppor county-ve purchosing manages who overste pocuerent decane by Toe dates The counsel anager eeu ut mort puch ae sourced Ilya spire are camanc et Netra’ puis arse well se wigue lal er sana elation As AL Bryan, Vie Present of Supply Chain APMIEA, dessibes the MeDonald's supply chan Ist rely che ‘ots oe of supply has alld ger: In aio to the many levee of management anc coordination requ fr a decntalized sappy ein tht ay ge ann of nel products at mee mary types sper het eps lence he purchasing foe ofthe Meola) 1 Secu ofthe inporance of consistent supply despite tet rom oobore esis nts dlisted oie uncontolabe ceeumanesy, McDoral’ supply chia must mala antigens plans estes oles contac with mule suppers of ech proc 4+ Bese of he Inge volumes hgh Guy, and campettve pres MeDonls equ tere Nt ow altratve supp to toe slay in te sytem, McDonalds can sn has angel ‘appli when warts, bth changes can be cs aa iptvrae cms corps Saging Seine On 1+ MeDoalas is sgt purchaver but ts power fun ite nd vane For istune the MeDona's satin he US bye ony about 15% by eg) of temates inte US. Sint eon though ts the gst et purchaser inthe US. only represents apps Sey weg of he marker ao mp ct natal an ayn Be py gmetad oly Integrated. or instance, in he US ~TheMeDoraldssptem purchases hamburger pais rm sb approved verses = Esch hambuger pty supplier parhase carain setions of cows fom some ‘ombiaton othe pptonnitely 3 sts approved for sappy ite te Neal's Exch auto puree ul gown cows rom many diferent ott and diy fans Each eal purchases calves fom handed r thousand of fret ranchers 25, feedlot purchased lees trom 600 ranchers aeh wi an abernge ero a eigtcons! {nds Deter, animal heh aso MeDogalas and former US Degstnent of Act (USDA) emplosee provides mxanple of how hve smite fore McDonald's ue dite typo nlc af ts supp ca Jn tho Int 190s wile wast the USDA larg tht shar was 2 pra sur pect or cneslaghte Bist wa oper pus some ain mater no tea Fries, Several fu thought should he pated but were unable to accomplish this ue > ‘sso sens legal auth inkrmad MeDenal's an they rewrote tha specctons Stan two wks bringing ths ange sboat hough hte suply chan a er Wh Iiade other buyer alse te notice. The US. goverment was tal able an he pace [a0 Thee ar oer areas whi McDonal's specications may fot be able toeraet3 dle change One emp the pron of igh ask mate a deo stock om DE ‘seopocsed io al uma fond MeDonasspeccions are et oh fed let ompany Bnd to sok ith ctwrs in fe Metaurant and. phurmacevtcl indstens {encourage anv suppor adios goveravet regulon which ily Pappened in 208 nana Dick Crawford, Vioe Pest of Goverment Relations, aks, "Mot people perceive the food Indust’ as nals dat cantingun fom faa te the proves, ap then to the esau The teh ta the restaurant duty fen as ore in coon with te nverage consumer ha we Inve with the grower or processor” Tomisgute some of thse alleges, MeDural sas supported ‘ore verte ington ine suply cain and has suceeded same pdt ars Su as ‘hishen Supply cn mangges alo bceve that cotnond consistent food production snd procesing Industes mig ab help omitgae some othe complet By femevng sep bere ‘McDonalds ten predaces Anata nampa SB ile Se ot Sis nig a8 NN m0 agi tannin 82 Comets Nemsma Caotaapng Ssin Sup Caia wae Leadership Working withthe SLB an his staf, Must lens he developmen ad iplemenstn of ser suppy stages, ichting the wisinable supply shan vison. He Began wering Sor ‘MeDonit's in 1977 and has hl eadrsup potas ance and sappy chan ange. {he er, he haste ey iit incading being a elective supply chat in Al fo Prove Inghquality Happy Mal promise and esabehing te SUB to forme the a leper tons global pole. Museo relied "The roiremer. or opporuny, to develop soppy States at enable McDorls to be compete ll act and be recognize ara spore rand hasbeen chlnging ond fon Sustainable Supply Ch ‘unt, fod safety, a compat pies have always concerned Moons sappy din management een decade sacl espns and he mote hls oa of usta ave Aso eared offi reopition. MeDonals employees point to thee primary motivations that Contibute tothe ncn importance of supply cain sushinabity wsuring supply dan ‘Seti “doing thigh thing an! potting coum usin fe McDonald tits oat basic ee a tina sup chain ust onsite dlr the sight produ at the right tines forthe longterm. Assn he MeDona Sustnabe Supply Cha on ‘pine with “a spply sytem That probly piste Nght. sfe products without supply inerrption” in 380, supplies the Pet. pod ls McDonald's at thea twee severly dining. Te supply chin managenent team ined inated discussion th 1s ira Ct sem an tee experts Yo support sastubleStenes, Gary Jobs, Snot Duet of Wordwide Supply Chain Pecinn, rcs Hat etches vere sui dt a git ‘ere ng resid by peemmane,b thre were Sack mart forming cold ot he te Fibres ut of contol” For MeDeeal’, overfishing represented rot ei a test fo maine ‘Sjavrsy and fishermen ut als) re vet oe bly to meet cstomerdenan for PletO-Fahsendwches Beyond protecting supply chai continu, “doing the eight hing” Is 2 common mana 2t MeDenults Tsay semployes ace th sete bck a Ray Kio’ drip bu te bapa ty the personal beta Sd moat of inavideale an APMEA' Beant Sits “Twit fn Sten fo inher a ean, susinase orld” Many a¢ McDonal's al shred 9 spel $Date srtmanty as aad by J or ne, Sense Ve Peden f Supply Management for McDonaa's North Amica “Thi ithe price of ledeship. We touch so any ‘ope tnupout or stim ahd any ites” With many dierent peypecivesarund the worl the right” oie i ot aways lat 0 McDonalas makes dese ge pt by uncertain he ences tomes, CEO i ‘Skinner asc ening to out cstomer il he right thing fo dake a Bon se slivays wil be. Customers will ws if there ae ites Wi our Products and services {Cctemers wil ets Ano i they have concerns ver whee wee tig socly reps * {Consumer concer re ions pry forte importance bt so Rp tn potie satay ‘nitive tat il most enforce ttn he McDaniel ee > een as Wat Cre erty epwras tuna Sagi Sule Sepp Chin Goal Iitatioes ‘MDonae' isprogeed toward understanding and improtng the oi nd ence lunpct tts supp chain sig thet 1980 200 creed he lob supply Cn Vien ond Guelinsace Ext 3) dict fs Satan spply chan prormance a 2 whole (or ‘ine supplies) muneres bythe Supper Perormance ise he Sering stern McDonal’s So to mune, rcogiae an van spect of supper perormance Highs of pas and ‘sitet iniatines cade he falling Social and economic In 1955, MeDorl’s developed its Code of Const fr Suppers hich snes expectations of spplerveling to employment paces 1 asst fu "Neral wl yfse to approve so busnes th tow he do mo upheld he Code stone ell as words” Since 19) MeDlalds bas ied “igi and pret” umber supplies oss Coxe compan A 205, 69% fal tnd, packaINE a 1 "ouipment suppers ha signed an akaoweement ageing empl wah he Cade of Cond Environmental AcDorls supply cain sustains fonts begs) with an enorme foc In 18% in the mit of pubic alepetene tat cate eating Was easing Amazon ‘kjorestatin i ued» ln Forest Policy whieh sated at“ MeDonals ors ot hs nat an "ot permit destocton of opal an fone foro eo sappy. We dos ave not and wll ak purchoe bee iret rin forest eee forte ait fest ad.” MeDeval' lbs Enirenmerta poly fled in 1990 sen among er tgs, at NeDonal’s woul etace packaging and wrk with sples to manage sold at, corset and protect atta fests, {nd encosage cron ales and pasties worked open he ple a psp sth the NGO Erneta Defsse eof 199, MeDonas hd elnatet 150000 fon of packaging a eccle more than an le oot aaboar | 20, MeDooait’s began paterng with the NGO Corsrstion Inna] (CI to deep sustaable Iabery galas for managing Tebery qu, fsh stick nota, and ‘rine cnservaton Aa of 28, McDonald wed te gules ost mae han 18 meio ah purus fo more sane soc Cl sso worked with MeDomls Yo seep + more mpechersive envionment sutamaby Smear for te suppl cai asa rel ih 2008 Meturld's funehed a plot tet ofthe Enernmertal Scorecard wit hey product Suppers {potatoes pouty, punk beet st buns) io measie water se, energy smut, sold ast Producto and a tnasons of suppl Plot rere showed that most supplies laced Ensizcnentlepacs Eee 208 ae 2009208 Doral’ began expan he Score {Wallet uppiom sf ay prod nis op sine markets Animal welfare sth the guidance of ts Animal Welle Coun 2000 MeDonsls isd it Amal Walia aiding Pope dese fo aur at anima In McDonald's suppy chain se “ese rom cy aut, and ge According tp Dx. Tepe Gear, reso f Anal SSence at Colorado Sate Univer, who worked closely th McDonalds to develop and Implement the principles in cate laughter thee Ie the proMcDorlds exe andthe pot Niassa tie night rd day “* A abate io McDonald supply cain are ui ach Jr or animal etre compan nN, 1s ofl satis eee a Psi re ial ae {5% ote est nese concn and po soond aude The tht id ot pss rear ‘emitted or eae to follow ast plan for emeaton and improve. in TN ik gi on 2 " ‘om nen 2 ame neonl Canin Maing Ste pps han ras 1 2002 ater eps st that he over of grow prmting abit compromise the al f aumas and crated aman teistance fo atin NeDonas ‘sted ts Gaba ‘Anite Plicy for Farm Annas to contol and mize the ue of anbites i the supp ‘in All et supple tt ae werd intprate and ave conto over the aa alse {psa chicken soles) have lined gronth homens. MeDona’s Europe Uke MeDonalis supply chain management as whole, usainable supp chain lors oe centrale il babs ue me encouraged to bul on ght poles ed programs to met incl nds MeDional'sErope in prtaar as respond oe spac once of employers [Sotomer and egltrs 8 putning adonl seule ppl alls “Though the McDonald's Agricultural Assurance Pogounme [MAAP) launched in 2001 each ajo product bought by MeDonl'spurcaner x Eopeas detaled production stds hat ‘el polces for enstoer, gical praices, animal welfare aml men aa meio, tapas, and gents, Each stndard har bth sor and longer components 6 ‘stings miu egueens om tins proven. 200 319°. of procs pending on tie paring categry) twee pllchused fom MAAPcomplint suppers ‘éDnal's Europe fa sp Regn te independent cerindon scenes ht sppor fe AAT ‘andar; eanly mae 5 commitment to leds “nti cee fom ceed SUNS” ‘chs Rest Allange and Ute Kap, 1 2006, MeDonai's Europe underok 3 complete reascsmet of supply chan sstanalty spate and polices Eurpeon management indie intra zacarch ad ett) Bef akeolders, cing suppers Wo eeu the acracyof henson and the ity of he ‘xpecatinns for improvement easement read na goa foe 27 a aly mapping hey [SPA chine nd taenang carbon fcspane for bee, chen and potatoes. Adee nappy {REh tanapeonntpoitons ured bang filed tsp contin epementten Leadership Bob Langer has wore om sstanabe supply chain tors ot MeDonal for most of his career. He started st NcDopal'in 583s Sstution manager forthe Midwest gon then moved ‘ther aes of eons etd to the eneronmeneheryy management anal elle Rand McDonalds Chie Chase and emerging ees management Whe workang a MeCural ‘he ened Bis MBA fm the Kellys School of Management m Noches Univer, 8a Vee Fretdont of CSR be coordinates ll SR eforts thine compa. He soen hear saying at he Je "etd in is vars and Desi nthe board of Net np” Soyain the Amazon Background (on Api 200 Grenpeae posta an atid “McAmazon (ee Exhibit anda page report ei Eating op he Arran ont we te They spt inde MeDaral sf de mentee Aawos Mons Capt Maing Sein Chas struction of endagzered parts of he Amazon rain forest in Braz. "MeAmazon” sted th = ‘doz on the McDonal Sane ti. glbaly known symbol: the golden aches an be enn many cours acu the word: But heer ie ft fod pn wants Jou 1 fee fe olsen aches tnd For, ‘MeDali's tay stands or in omat destruction Aad Wat oe ery Untuppy Ml oe theplanet Teagmested, or supplies might ely adst the MéDoralds sega of ther production For ‘Eun even thous fe Sutaable shee guideline sooo Fe anproving he nt oF ‘owns apply, McDnal's buy ese than fal wht fh sls he or and pp has onsen achat compton stl buy om oer aresase Mdeuttcnpuin anagig Sotaibi CComplenity lo cress ificuie ange nplemetaton tine for spies. According 6 Denis reac, Vice President of Eniromental and Corporate Alas 2 20 spi Sahel Pots "eher mulupe cuter cond diferent guidelines sel just sy ‘mpy ate’ conten {hud ieee We eat met hen al” McDonald's on fps the poem a has in soe ‘hes he ade “208 Langer one I ip push the convering ofthe Natal Perk Beard dass ‘Seve conformity in aia ele stands wel a ha alt ses Finally, purchasing power doesnot always taste Ino raid change i apesing pracices Acoring f Devin Coe, Vice Prssent and Gara Manage of te MCofal Buses: Unt at ‘hcken supplier Tyson Fonte, "Large Son des not neceery lend We to sap decisions sn ‘hangcs Wen you have big efiets you hae to ink trough and aks Sane ge csk ‘dlecve supply eo sins change Hall” Coen Ruta, Dracoe of Capornc Portes at Ws easy to say MeDonls asap its ges, ut i a much captive of supplies ait isa mut’ of tm gos bos ways Therese na lt of compare at hve he pest fo supply McDade oven, and ow a needs Dios set "Shout workng wth suppers but ina way they hind of ave to And Huy are wing to walk tay, buttey dont want ‘cca ofthis management complet, Masceto Hele that ls inpstn for MeDunais ob raise about what me comnt -Wo ca hangs every nty ba we can help IRR ‘howe who want tape un Cultural differences Somstimes the “heer within a fameor approach works wal or supply chin sstaiy efrs The Anal Weare Cain Princes sae pete bebef about prsventing animal sling butesch AOW can have shy afer pei standards Jered {plement thve beets Fo tance, fll foods hoe peorsuble dr same aw, eure 8 Parulr metodo sage s0MeDunl' hs ese anal wel ada thst meet hall ostements inthe pref the wa where customers ead In oer cases, sustinabe supply chain efforts and CSR lots nore genta) hallngs the “tps within s Hameo” approach While castes in deen sof the word have Aieren deintons ofa pete or sstiabiy, he lb cece ate cst ad {neat coupe mana dtns can everett empath bal brand. As Musee puts, cultura snl ejpous norms vary slg so Hu ep to each AOI to apply the fuidelines We have to be ue they ad 0 and ud pen late guns but pot Setac nd not Dut the ital rand atk” Even when they agree on the sme gal in concept AOWNS stat tn diferent posons and progress a cifeen pests For inetanc we il ADs ght support NcDonal's carota Emunieent, the average Eopenn supplies Mkly to start trom beter poston on he Enionmnial Sneed then te verge Chnwse supper. That i rh, scoring 10 APMEAs [iyans MeDonal's need stay focused opr benchmarks bt on "igh tadards and ontinanus improverent” Mats Loerhaser former senor exc and curren a senie ‘Sdvisor to McDonald's ade thatMeDonald's wants to be reagan each ea ote ‘won ly ealzing tat th tay nan subnet dierent gsm ch alte Prioritization Foun within the sme lel aes, iagreemen's ove susan pire: ‘gen occur ant afc adele ae inevitable. Win Breil, for tae, some people suppor [reuving is natural sores tll ots he ster Bete that ers shoud have the ‘tkonamy to grow and support the communis above al ele, Fre, shoal esto poteNeDowtesCouatin Saging Suis Ch wo ‘he Amazon rin frst Be emphasis above thas o pokt ote fag eos in Bez Farber dsngectoets xs er the defn ofa forest wee doortend an something ee valuable” tegn? Governments have ng supped fo scone valid opposing nee such ‘hese now malinatns! corporations Ike MeDena' face the same thalge Accaing ° Some rst ke fae obvi because we nee ther for ou be supply cl Foe ter proste sw hare wo have an impact, howe we at makes mpl, a ha ‘hecortbrwit adele cant us espn to erst groupe cn thre 09 ‘nh dif ews. They cae aut ruses bu ot about the os hose dein Sustny walde fll Sonne suggest tht McDonal's should nol wast tine debiting opis, ut ae pick a er profs and moe frwar According t Senor Vie Present Restaura lanvaton ab fre Sippy cia lade, Kon Kori They [NGO salsholor| mi fat hear but we decided See tat isopod tha We dn want ae Sto ashy ly on ot id ore ‘ake matersorse.” Oe the company ssges hat McDanalss avoiding eos ant trying o plese too many inert groups They ould peter hat MDoels aeal stdy wht “Tobalans hese vaso viewpoints, McDonald's lis Nevily on expt and conser opis 1o determine sires sacs advisory group such the Amal Wale Coun ad nation) Scie Ader Coun understate ast esoch on anal wre and he ere Bat Consumer pcerenes come fist sometimes ten the expe of stably Noe Ameri's ‘Gonzner Mende states tat poi Some chang ve had than ters Bests consumers pus back We wete uring bowen Inge Benes they are ore ensronmertly tena, Bt conuers it hey made Fd sem ls ean an fh han whiten, one sviched bck We carmel Stbsck wah he ange. ust as consumer prefeenas deve store design and mene choices 50 10 do thy play & sigan sole nsupply chan utility neg at McDonald bat he ious thy see Cont constraints Some of McDon' sustinbity ntes ane fancy ert han is cline packaging ager secuces ery te la ses sony, Oe ter amt tnpeove lagen raat ntangsiy through enhanced Hand rast fut cs the coun the short term Fors company tht comptes ina low pre, valueiver markt, paying mote or Inputs isnot deon sae ght Consumer valve the ernment but they seen vale convonin an lowe pies mors AS [Novth Ain Gonzaer Mendes pus Asan usr lender, being a soil responsible company ihe gens ee, Pople expet “ompanes ike MeDonli's tobe espns but hey dow recesal want a fr ‘Theresa tug diferncebetwecn tbat people yen what peopl do Thy [0 cstomes {Mid tey varie lobe envioanetaliy Cocoa nd eye bt he hey ely net wa See want MeDona's fo be environmentally snack Ou cusames evenly Festa our mstorereeyeing ees ‘To remain compete, MeDoals must purr ts sustainability isn in a wey that supports it need for compete ping sche onan that McDunals ha undertnd the 2‘ost of doing most of tase things Weave make 2 prot and our competion are nt dng these Tangs Pie Sent apps to ctor round nora Evens Harpe, ere he pe tore concerned about sendy impacts, supp ha Ider DeBiee wars that "ee sey Sant tobe aes of custome, but consumers re sll pe srlve We have alee Beg ‘soe pc ad dig wha’ ight Suppliers ako recognize the igneant challenge of cst to sustalnably eles. Acoeing to Tyson tole We wan to doting but we ao need the consume o cate about ito understand he costs The public ees to dare too move to be more involved in where thal food cote Homey don understand the tes for la canto aad genera we ea el [at ahead oa oe ues tron fw cou aod fo ext at Metals, We have to ee proiaby"people pene fx be -eveyone has die that com ese hinge Eresnporeant INGOs agree tat consumers ill ot pay mite for sisbinable product but bebe that sfc” tunability soltons beet the ete movement Eetrontental Cte’ ts sgt hat "MeDopals has bec ae fo ake progres a eaves, WUC grat oe ‘ery Feep sustainably rom boa lanery fe portunities Leadership postion McDooalt's to is industry on many sistnbity inseste ‘wppliers ate vifualy unatinous in ter asseion that McDonald's sands cot tnong el utfomers. According to Lane Locke CSR Office ast Ble Babery, “MeComalds sete 08 SSelnding edge nal thre nue They have beth eth ng fhe mountain” Tor Kasey hi Engineer Enwiment at enh iy supple Mean Fol Limited gees ht °MeDonal's 5 the lender. No oe ese dau eythngfemotely Uke this" NGO leaders ge, I's Buchanan ‘i, “MeDol’ scl abe We pack te restaurant category a in the onde aso ‘od and acute they arene the ears” McDonald’ can leverage is lendeship pesto in many ways AS evidenced by its le in soya susan in Bra tea mae an pct Neynd wat ts acl buying porter woul tase Tysons Cle note tha the sar nd sop of Mears ha lowed he nay foal puss Sch quicker Other ‘low thoi tandarde tripe renter than at the ercnnge ot ‘al banes, Beane thy st he stands in consumers mings Bengal ose te anaes 8 ‘onsamerr’ mins Is vsuble becuee lowes McDansi's wo ern suai sate that Soveeail with fe own Buses needs ahr than having wo comply wih stands set by 3 Conpettor According to Reyuran Innotase’s Koil ad “We kaw we do Ht ot ue Seale wth the ih ope eveyone ce a Fy ath op Nebo’ ano ee oe MeDonai’s eadensip has ss came cad with NGO and govemmentparmer When Speen, » Danish fish supplier, ft td to coqwine the Euopssn Union tena scr Standards for fishing to ance sina, fad dicly. Hr made more rogess fe MeDonslis joined the disco When “McDonald's ces tothe esting wh Fou” Sy {Spent Preilent and CEO Klass Nee “the ete, ‘uly, McDonalds commitment to enerip poston ao bls cedity with suppliers tod ves then conidence osu the seestments cess for progress in staid. Tneben Caen Mann Ste Se Cole yates this commitment “MeDonals has elute of being the ade for te og tr — they renot jut yng popula ay Supplier selationships Any progess toward a sutainabe supply cain vison relles on suppliers theecees, Mona's Govern wth suppies presents a opportunity we thir ‘xfer odesgn the most fient phe suri As Bee Panty Serr ta WorttideSuppy Cha observes "-Donl's sos’ prs nyting aa we aed SUPP to ft things done. We hve fous clasts he frameworks They are dase © Foust can igus othe best slr Suppers value that approsch, Asin 4 Est Blfs Helle, “They dont it sy hat do you tthe? They sy hw can me work ogee fo imprine™ Huh MDonls more ef 3 Parmershp-it comes down to tat McCains Kinz nds, “Other custo snd eensive “emonmaval guestennaes Da hey don invoe ss the deepen het Pogams ah thay don ak or fetus MeDosal's ys, “Hecs what we want. How ean we do Bis? Ging Uheupple neve, melange en” By lst o supplies and ung he experts, MeDonal' eter understands the callnges ty ce snd epee es pst ars ke cst For neta, Eaprsen's Nae pois ot at the fhing nda ww van ofthe ple wi unsustnable fh catches oan re Bat Expeeon didnot cabins comprokentive appse ntl Mc's gt wale We wonld have doneit sone bens ws cesar, Dt we would have dene ln without MeDona' McDonald's eed our hands o gt ne Higher cot dont ‘materi you beet the night approach an your bayer wane and toy Te wig rove om oe species nate, event eane sgh cost Seca MeDonal's tns ttsuplire and comprehend the clnges they fot os ot to make the pres fn pal Euops DBs explains that McDonalds "edu sho the Bale very quit, We Jot waut to el oat paras supper pul: we wan o work ‘Seer with thm fo fix avert Covemtent Relation sister ak "I ter he {Exot than stk Yow do’ rst uppers by beating the up. You hve postive cnt, Sow shar fst pacers and you ba the acount Ir ba mute of coins improve” {fs Buchanan ages that ths can bert bow for sustainably: coter compares ave axe lnumadite levee foe quick changes bse they can mabe ene derands to walk sey, Dt eDunalds won ot and suppors Know thoy wot be topped verngh ste, hy ork ‘egeter nd Tn ong tr sons” Supplier ta conser themselves prs ar ore pe ling rom McDonald staying sn tine ith the conse of soonumen For instance, McCuin Was working on eirermetal ‘stably een bore McDopalts appressed to lp cate the Eormetal Score Bat Kass ackowlaige tt Meus “hpedcytalize fe They helped sgt 0 he formal ‘Dearne nc havenom, beonae ty lp ws nestand wat he pub waking ke” ‘MeDoli’ sbuenclosly engage wh suppor on stinabiity sues he pst, bu I seh to boom nen me 40,40 er fon Macht to ap sapere We at pase with ur progress arose a mame of rontsGiven theft a we see ‘though we hit is god pin fo tke tak fora escent Wha working? Whats ‘0 What athe meg-tends ete fate ur supply an? What owe need 200 ‘Say ahead? Given te tendth and importance ofthese empl sustaiaby ses we Wa totnwe you to fup us ith thi rigomus osamiation of eur pris or the tne‘helt precede lly Supe ymposum fr the CEOS ofthe top en lal supplies a Dona’ headgear n Auge 200 In addin fo docu Ste men noon sd ‘ution seat Langer aitate shear dion abot stanly at McDonal' ht how supplies could support 1 Quesone about Ingementation ‘emt, but Suppers rent pontvely to the symposia Meals sustunliy von, MeDunal’ sippy dan keer Flakctolvorage ths partes and th going interest insta Partnerships Farmeships have lng been a sure of opportunity for MeDonals supply chain mrtsnsly efforts When McDensi'spartwsed with Envioretal Defence ithe te Iss0s It was such Succsy according to Lange that MeDonal's deed to rect ut 10 oer |roups to move seply chan nana race frana Who atv ous cle tenon [hina ele tras nth mls 1, thy Fa propose slong, MeDonals reach ot te animal were expert Dr Temple Gani or ep In een Years MeDatals as cond fo rey hei on partnership wth expert and NCOs to advances sustrbty programs: According to Langet, McDonald's experience working. wih pares continues to be a cpportanty moving forward Desnuse "porters toy pide expertise they ld rey and ‘in fuip bud brges” The was ait im McDonald's response to fe ope cmpaigh ae ‘ecognsed by both ses valuable According Grepesce’s Savon, We otf each ther (qe wel Row we respec each her more and we understand cach oer more” MeDooad {Eeopes Van Bergen ates "rom hee we cn fd oe otto ree rest ana pro fom sch other's wisdom, Cf cure we would rather hve dive tha have people sing in ou ‘esaaranes dane chiens? ‘McDonae's ako jst hegning 1 esplove the opportunites alle to work with other leading companies ssiable supply chan etn eas sucesflie woraag ith tke ujopean fetal to adds te soye te and is 9 member of the Sustinable Agrcature ive «up of td cies woking devel bo paces se rae [European leadership Sccasse Eoropean customers and governments often deny and addres ustrabty sues eaier than fhe et of te worlds McDensl's Europe has ore ‘apeence considering and addressing supply hai usable than ober AOWs, as ‘madestsprionty. Dee Hiei, Hessen of McDonald's Europe, case on responsi sup {hain management when apesing at te most recent MeDonalds sytemside cones ‘Copotte sil soposity seve eae et Bt alay an esiment Tope, tour suppers we are sepa or wha we buy, bu a ow eu ‘he MeDoral's syste at wholes aired eared tm Europe's nl fon it ela enema responsi nse and tions. Aceoring 9 Restaura Innovations Kosi we twee infueced by Europe They hped ws undertandtht we ped fo be case fr soo hot ust, Preventing bad” Many within MCora’s recognize the oppor fo conte feng tom Europe, both abou what consumers nthe as fhe orl key Heme cere sot ‘hetatse swell the mer eesti way to aes pacar urinal ee Looking Forward Muschetio efcted on McDonald's achievements as he considered the challenges and ‘opportnies at he and tangert had dncaed i pol we to aoe beyond thesia sy Inftauve another speci erst 4 more comprenensvesactaiable supply chain sayy HeMw capers Sina Supp Cia wan believed that McDonakt's could and should resin seston in the indus 08a sustain caer ut what waste bast path each tht gol? Hind wandered back ose ofthe bey eestor: ~ Hove should MeDonat's pone ssi weave to othe supply chin gous (eg. ensuing ond ae and mining eos” ~ Hoy should MeDorai's sconce dient sib expectations and proiie aout ‘he world eh undertone npc omens impact the gba band? ~ How should MeDunals ngage supple, seis and oer tabskldesin saan supply intrort Monn ang Sun Spy “Exhibit McDonalfsCorprtion Facil sormation saa ep to oe esExhibit kontneed) Sune Mee pnt 38vss sn cpu Managing Ste ps Oa ExiDiL2. Case faterviones Adams, Catherine: Compote ioe President, Worswide Quality, Food Safety, & Netsion ‘McDonalds Conporton [yan AL Vie Present Supply Chain APMEA,MDonai's Conportion ‘Buchanan, John Seo Dror Buss Prater, Conservation internation Cole, Devt: Vise President and Genel Maar, McDonald's Basness Unit, Tyan ood ‘Caford, ick: Vice President of Govermen elton MeDonal'sCrporton Daly ck Senior Vie Presiden Corporate Relations, McDonals Corporation| Francesc: Vice President of Sepp Chin, McDenal' Etope Detwiler Linda A: DVM Anal Hest Consultant Feinberg Bruce Senior irc f Worldwide Supply Chain MeDoasli's Corporation CGonsaleeMendex,|C:Seior Vie Present Supy Chain. MeDonals Noth Ames Holley Joe Vie Present of Purchasing, East Bl Bry Jaramillo Rebecs: Chie Quality Execution Oc MeDorals Europe ‘Johason, Gary: Senior Dieter, Worwide Supply Chain Prtens MeDonals Corporation ‘Kaa, To: Chief Engineer, Environment. MsCain Bods Limited Kenny Ket Senior DoS Sourcing & For Sty, McDenai's Europe oie, Ket Senior Vie Preside of Restrnt novation, MeDonal'sCorporaon ruck, Fk: Distr, Environ nd CSR McDenal's Europe Langer Bt: Vie President of Crperate Sahl Respesiiy, MeDonae's Corporation Lederhausen, Mate Senor Asoo McDonald's Corporation Lock, Louie: Corporate Socal esponsbity Oi, ae Bal Bakery {Uyman Jerome: Vie President of Supply Chain, McDooals Latin Ameria Muachet, Frank Senior Vie Present of Woldeide Supply Chain, McDonald's Corporation ‘else, Klaus: President and CED, Espesen Rose Jer: Corporate Vie Prescot, Cargill ata, Gis: Drs of Compas Panarshps,Enlrneentl Defense Suven fbr: Acting active Cizetor, Geenpence UK Treacy, Denis: Vice Peden of avionmental nd Corporate Alsi, Smell Foods ‘an Bergen, Kaen: Vice Presider, Compote Relatins MeDeeae’s Buoys igi. avs: Director of Consmnctony, MeDonalds Bal Ht ey td Capac hemebans Cones Maing Sih pps Cn wna ovo tc naporiny a ‘SUSTAINABLE SUPPLY SYSTEMswan ons Cut: Maing» Susie Cala MeAmazon Depa rato tly non sym th gn a an ese may ue ‘McDonald's today stands foe rainforest destriction, And that ls one very “Unhappy Meal” forthe Phne ‘The Amazon anor eds no inoue mere mention ofits ans cours up images o( 4 huge unuched wilenes bursting with aang ide But go McDuvwl's ad faa of ge Soe traders the Amazon meare somthing completely ferent meas chp Ton and ‘hep nbour Chap and test fi of olen, chaxp Lou Beste some a he pple who ‘woot cating den the fet or wrk on the farms in he Aan ae stly aver, You ean it saves ow inthis posse you ak? Wel goes something ke this snnoculure The ter te he soya ad bp ito arog wheres fet anmals he cen npg Te aia th ein at od eos ike McDanal's Mugged many ‘ter pret ound in soos and supers,onl Crp Magu Sepy hie sas “The joey from rainort to eta might sound imple nought thas taken a yearlong lovemtgain, using stele images, srl suredlane previous “unless overcent ‘dcuments nd or iheground monitoring to expec What we oud wos 2 bal dein soya fom finest ceutacign sh the Auazon to MeDonals fet fod outs afd supermaghts Aco Europe Most fe lab ade i soy cools by small amber of mae aders Car, Bunge and Archer Daniels land (ADM). In raz, ths cel lays the le of bank 1 te fame inca odin ane ey ive farmers Sd, fete an cides inet for sya at Test: Bunge alone pied he eget of ely USS ion worth of seed, fetiser and hebiides Balan fares in 208 This ges the companies indet control over huge aes of and Yat ase tobe snore ogee te nines ane response fr sro 6) percent ct heal aneing fy producionn ‘The sae of Mato Grosso raz worst n terms of deforestation a fors fis accounting for seal half of al he defovestaninte Araaon ip 2X08 in Mato Grosso the goveme, Biro Maggs toon lab asthe Soya Ring His oun massive soya company Grupe Anate Mogg “ntls mac of he vya production in fe sate and sn selon 2002, fore desecton ik Mato Grows has cent 30 percent Banks to have boon cught up inthe destruction of the Amazon. The Internation inane corporate (FC), the pve ling am of the Word Bak, wrongly asssed oa fo Grupo ‘Ave Mogg bn tow ervirruetlrk deapte evidence he conan. Ofer Bak ‘velo nt huge suze f mony fae company without conducting heir bn vier foci sud 0 fz, Rabbank, the Nebel biggest agra bank has nt over USES milion to Grupo Ate agg Rabbank adit ha td ts hr onerent of the riko the ars, Simply aceping Se aed) acumen of he TF, ‘Soft fod and supernates sy eer on i banks areal washing the Amazon ners {re an rack soya has more an 700 (4490 mes) fro far inte Amazon to chicken pron Europe hee na ence the food Indust otto Hv ae Ne fod came From, anv domand hw eacae of Amagan so em ha supply can ee Comp tip agen g/min min sc on ey 3207, ai 2 Crna tamerYY Mevicory Visor ast fo lane pladges vo ap pote the Amazon 25 uly 2008 Inverational—In an hist desl tht has inact fr beyond the golden aches an in the ‘lta gical naka, MeDoald's is now the lading company ih he campaign to halt EiRtettion or the expansion soy ing in he Amazon Thanks to enor pesice fom the hounds of emai and ees Set 10 thot European hendguntery by you cur supporters MeDunals has agro o sep sling che fede 293 {rows inne deforested ate ofthe Atazoneifret In cect ears, he sexing unstoppable expansion of oy farming inthe Amazin fad come one of the sa threats to te ors eget faors. The soya wrt being used 0 fee the ‘tov ned twats ooo ar ana destin fo at fod a speak chs cs In April we nunched our campaign exposing the foo ter le in anor destruction, Os seperti lip te snus, dened hos ner somes were pleted ‘Tabet lan grabbing slavery and sence. Sce hen hee as beso change nse Gsing the fo indus towards the problem mused nace chetevens agesion Mannings Sutil Sp aie sre “The ceultishat McDonald's an ther big fot ess have work with sto develop 420 Aeforestton plan The pn mill abo blp bing a ed he and grabbing nd soil ice at (Sreinthe Atsaon Pressure for change By commiting to the ln the comp’ ss buying power has reat huge demand or soya that hasnt teen gn in he ashes of the anforest. Ths pu pes on te bg ve’ sya tars Carp, ADM Bunge, Drees and Ams to come tote negating able with the are large ars ofthe Amaze anor sah 1m espose to the pete, the rya tars commited 16 ned two eae moratoria of buying soy fom dels! nc The two jen ne rae of the sop ters mores FS Ing no more thon ken geste, less the det iver wal hang protect the Amazon. CGovenpencedersnking thi the moron stays unt proper procedures for lay axt governs vein pc ad unl duc ey agnemn with he Braiion Government a ey ‘holders on long tempreecton for he Arason forest A working geoup wl be ets, tnade up of oysters pres, NGO ad govern opti place an ein las Kaen Van Bergen, Ve resent f McDonaht’s urop ad “When we were St alert 1 hi lesueby Grenponce we teil shed out outsole ther NCOs and oer spas to moive tus baue nd ke act. We ae deterred fo do the Hh dng together wa cat ‘Splish Brain govcnga pent the Amazon from arther desta The twenties fot inv weap, nica ofthe sense of urgeny th ‘nhich he sya tades wah fo implant the germane programe and al of coon We ‘hpect thor shnld some af the tenures ake longer an the ted wo yeas fo plant, ‘Dettori meu cemoiinexatence nal cormmtnets ave bee a There ae some compas, howevey, who seit ply ball Kentucky Fred Chichen (KFC) hove pian refuel toa thei rl in Amazon destracton also we ned 0 shaw the ew Eid theyre tecoming En the Colonel now ad el um fat Reena McDonah can hei tet the Amazon soe git nateh at lester