McDonald’s and Deforestation: Supply Chain Traceability vs. Visibility

We recently started to cover McDonald’s recently announced commitment to eliminating deforestation throughout its supply chain. The announcement pays more than lip service to the opportunity, in part because if will cascade across multiple tiers of suppliers rather than just tier-1 or direct suppliers to the fast food giant.

There’s also a number of other rather curious elements to the program that warrant further analysis, one of which is contained within the Supporting Addendum McDonald’s Corporation Commitment on Deforestation that explores the difference between how McDonald’s is defining traceability vs. visibility.

In the Q&A section, McDonalds notes that, “this commitment does not imply full traceability, but focuses on visibility to the raw material origin, in other words, knowing where and how our raw materials are sourced.” Further, the organization notes, “we will work with suppliers and expert advisors to determine the appropriate level of visibility and traceability needed for each product to ensure responsible production at origin.”

By avoiding the issue of “full traceability,” McDonalds is significantly reducing certain issues surrounding the analysis and documentation of multi-tier suppliers. But the question remains: is this good enough? If you follow what typical manufacturers have pursued around multi-tier supply chain compliance for conflict minerals, many have come up short in providing anything close to traceability, especially on a continuous basis (as sources of raw materials can change).

A simple attestation statement from suppliers is not true multi-tier supplier or third-party management. Perhaps McDonalds could go to school on the challenges inherent in conflict minerals compliance approaches by studying more successful multi-tier programs in supplier diversity, aviation/defense spare parts and active pharmaceutical ingredients.

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