Supply Chain and Mcdonald

Green Sourcing Process for Mcdonalds French Fries

McDonald is a global and largest food chain specializing in fast food with more than 68 million customers. The company operates in 36,658 outlets across 119 countries. Major brands of Macdonald include French fries, cheeseburgers, hamburgers, chicken products, breakfast items, desserts, milkshakes and soft drinks. However, Mcdonald's French fries is the world most famous fries produced from premium potatoes, Shepody and Russet Burbank. Mcdonald has been successful from selling the French fries because their fries are made up of one-third of French fries sold in the United States. In the last few years, Mcdonald has faced criticisms because of inability to follow green initiatives when procuring the ingredients used to prepare the French fries.

The purpose of this document is to provide recommendations to assist Mcdonald completing the Green Sourcing process for French fries. The report uses the following steps in providing the recommendations. First, the study explores the current Mcdonald sourcing practice for French fries. Afterward, the report provides the recommendations revealing each step to assist the company implementing the Green Sourcing process for the production of French fries.

Current Sourcing Process for French Fries

The Mcdonald French fries are prepared with the following ingredients:

• Potatoes

• Canola oil

• Hydrogenated soybean oil

• Safflower oil

• Natural flavor

• Dextrose

• Sodium acid pyrophosphate

• Citric acid

• Dimethylpolysiloxane

• Vegetable oil for frying

While Mcdonald has portrayed their French fries as the most famous fries in the world, the reality is that there are some shortcomings in the company unsustainable sourcing process for the ingredients used to prepare their French fries. The potatoes are the major ingredients used to prepare the French fries. Yearly, Mcdonald purchase over 3.4 billion pounds of potatoes across the United States. While the company prefers Russet Burbank potato species, however, the potato variety is susceptible to rot and other diseases leaving farmers no option but to use a significant amount of pesticides to preserve their crops. Rural communities in Minnesota living near the potato farm plantations are always the victim's pesticide drifts from the dust, and sprays blown by wind from the potatoes farms. The picture in fig 1 reveals the example of pesticide drift from potatoes plantation.

In essence, the bulk of potatoes that Mcdonald is using to prepare the French fries are affected by the pesticides and having negative public health impacts on the environment. Typically, nearly 98% of 50,000 acres of potatoes grown in Northern Minnesota are sprayed every five days with chemicals and pesticides to prevent fungus. The EPA (Environmental Protection Agency) identifies pesticide drift as the drifts carried by the wind from the target crop. A quality test carried out between 2006 and 2009 revealed that pesticide contained carcinogens such as pendimethalin, and chlorothalonil, which can disrupt children nervous system development, and put farm workers at a risk of developing abnormally shaped sperm.

Fig 1: Pesticide Drift

Thus, Mcdonald's procurement practice is not sustainable because the pesticides used for the growth of potatoes have a negative impact on human and animal health. The pesticide drifts also have the ecological impact resulting to economic loss. The EPA asserts that farmers waste approximately 70 million pounds of pesticides from pesticide drift yearly. Moreover, thousands of people lodge a complaint with the local and state agencies about the pesticide drifts yearly. While Macdonald has defended the use of a pesticide for the quality growth of potatoes, however, a group such as Toxic Taters Coalition has accused Mcdonald and potatoes growers of contaminating the environment. The group urges Mcdonald to mandate potatoes suppliers reducing a significant use of toxic pesticides for potatoes production to adopt the sustainable green agricultural practice.

Apart from sourcing for potatoes in a non-greener method, Mcdonald also does not follow the sustainable procurement initiatives in sourcing other ingredients used to prepare potatoes fries. For example, Mcdonald uses Canola oil to produce French fries and most canola oil is currently genetically modified. Moreover, Hydrogenated soybean oil is now being extracted genetically making the oil more saturated and unhealthy for human consumption. Safflower oil, which is one of the ingredients for French fries is heated with high temperature and can cause inflammable in the human body. The natural flavor added to French fries can potentially contain the brain and nerve monosodium glutamate. The Sodium acid pyrophosphate, which is one of the ingredients to colorize French fries can be hazardous for ingestion. The TBHQ (tert-butylhydroquinone ) is linked to stomach ulcer, and hydrogenated soybean oil used to prepare the French fries can damage the DNA, linked to heart disease and cause cancer when eating for a long time.

A report by ESRC. (2008) also shows that potatoes used to prepare the French fries can contain a large amount of toxic residues from pesticides, which can be harmful to consumer. Thus, it is revealed that Macdonald French fries contain some questionable ingredients that can have an impact on human health. Mcdonald has to implement quick action and use the sustainable ingredients to prepare their French fries before a government or legal intervention forces them to adopt sustainable procurement practice. Typically, Mcdonald needs to integrate the sustainable procurement in their supply chain to reduce the number of criticisms levied on them, which can tarnish their business practice. Meehan, & Bryde, (2011) argue that organizations are required to incorporate sustainable practice in their overall supply chain and should encompass the environmental, social and economic elements. The environmental laws in the United States and Europe make increasing number of organizations integrating the TBL (triple bottom line) that composes of environmental social and economic elements in their business practice. According to Birkin, Polesie, Lewis, (2009), the concept TBL is a paradigm for the sustainable development. Thus, firms that intend to employ sustainable practice in the business model must work with their suppliers to reduce the amount of toxic materials used for production.

Blome, Hollos, & Paulraj, (2014) support the argument of the previous authors by pointing out that increasing number of organizations are making environmental sustainability mandatory and integrate it into their business model. Typically, increasing number of businesses are incorporating green procurement in their operations. For example, Samsung uses the sophisticated green procurement strategy to motivate their suppliers to pursue greener initiatives. (Meehan and Bryde 2011). Macdonald can face reputation risks for failing to integrate sustainable procurement practice in the business model. Jens, Johanne, & Stefan, (2014) argue that firms are required to implement sustainable procurement practice in their entire supply chain, and failure to implement the greener sustainable practice can lead to significant consequences for financial performances and reputation. Thus, Mcdonald can face the reputation risks, which can affect the company financial performances. It is essential to realize that reputation risks are the major drivers that make large number of organizations adopting "environmental sustainability supply chain management practice." (Jens, Johanne, & Stefan, 2014 p 695). Apart from the reputation damage and negative publicity, organizations can face a legal risk that can damage a firm market value. Thus, it is advisable for Mcdonald to implement the sustainable procurement sourcing for potatoes and other ingredients used to prepare the French fries.

Recommendations

McDonald should make a managerial decision to implement sustainable practice when procuring potatoes from farmers. Typically, the company should understand that it is their business responsibility to work with suppliers to preserve the environment and use resources efficiently. Mcdonald should employ different strategies to produce the French fries and adopt effective environment sustainability. First, Mcdonald should collaborate with potatoes farmers to use lesser quantities of pesticides for the potatoes production. It is essential to realize that Mcdonald is the largest buyer of potatoes in the United States and the company has higher buyer power over the potatoes suppliers. Thus, Mcdonald can easily influence the production technique of potatoes. According to Mark, Zhaohui, Michael, et al. (2010), Mcdonald should open the farmer support centers to train them using the sustainable practice to produce potatoes. Instead of using toxic pesticides to control the pests that affect the potatoes, farmers can use the biological methods to control the pests. For example, farmers can use the biological products such as biopesticides as an alternative to the toxic pesticides. Greaves, (2015) argues that biopesticides can play a significant role in enhancing sustainable supply chain because of its benefit in the preservation of the environment.

Greaves, (2015) defines biopesticides as the pesticides "mass produced by biologically based agents used for the control of plant pests." (p 3). Examples of biopesticides include living organisms' pest natural enemies, nematodes, invertebrates, and microorganisms. Other examples of biopesticides are Genes, natural occurring substances, and plant-incorporated products. SP-IPM (2006) point out some countries in Southern Asia have used the biopesticides successfully for the production of rice and has resulted in a reduction of the use of chemical pesticides. SP-IPM (2006) also points out that some insects, microorganism, mites, and other species that can prey on parasite and serve as a natural control of the pest. Thus, a human can intervene to boost the growth to boost of pest predators to control the spread of pests in the potatoes plantations. Thus, Mcdonald can hire pesticide specialists skilled in controlling the pests biologically to assist farmers developing the biological method to control pests since microbial pesticides can be used in a similar way to chemical pesticides.

Despite the benefits that Mcdonald can derive from the use of microbial pesticides or biopesticides for the production of potatoes, only 2% of farmers globally use the biopesticides to control pests in their farms. Thus, Mcdonald can encourage farmers to use the mixture of pesticides and biopesticides for the potatoes production. Alternatively, Mcdonald can encourage farmers to use less toxic potatoes pesticides for potatoes production. Moreover, Mcdonald can provide training for farmers to apply the integrated pest management technique to control pests. An outcome of research carried out by the Oregon State University provides the examples of less toxic pesticides that can assist Mcdonald to reduce the pesticide drifts and toxic effects of pesticide in the potatoes. Example of low toxic pesticides includes Botanical Insecticides Rotenone, BT (Bacillus thuringiensis), and Beauveria bassiana.. In the United States, Mcdonald is the major buyer of potatoes, thus, the company has the ability to dictate to suppliers to choose the low toxic pesticides for the potatoes production.