SBPPSE

School of Business, Public Policy and Social Entrepreneurship

Supply Chain Management Assignment

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McDonalds Corporation: Managing a Sustainable

Supply Chain

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Submitted by- Astha Sabharwal

Himashu Sagar

Minal Deedwania

Neha Sheokand

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Q1. What do you understand by a Sustainable Supply Chain?

Ans. The United Nations Global Compact defines Sustainable Supply Chain as The
Management of Environmental, Social and Economic impacts and the encouragement of
good governance practices, throughout the life cycles of goods and services"
Organizations don't work in isolation. They are a part of larger system, which involves
various stakeholders. Sustainable Supply Chain Objective is to create, protect and grow long-
term environmental, social and economic value for all stakeholders involved in bringing
products and services to the market.
With the progressing time, the need to integrate environmentally sound choices into the
supply chain is significant.

Q2. How can a company align supply chain sustainability/corporate social responsibility
with its business strategy? How well is McDonald able to do so?

Ans. Company can align its Supply Chain Sustainability/ Corporate Social Responsibility
with its business strategy through the following ways:-
A. Involving Suppliers: - To align Supply Chain Sustainability with its Business
strategy, one needs to collaborate with the suppliers as they are the one who is closer to the
issues and can figure out the best strategies and solutions. Involving the supplier in the
process also give the suppliers a sense of importance and responsibility.
B. Involve Customers: - Organizations should take into consideration customers feedback.
They should take into account their emotions and culture while developing the strategy.
C. Collaborate with NGO's:- Collaboration with NGO's helps Organization to reach to the
Experts who are working in the particular domain. They can provide a better solution and
help the Organization to advance its sustainability programs.
McDonalds Sustainable Supply Chain vision states That Profitability yield high- quality,
safe products without supply interruption while creating a net benefit for employees, their
communities, biodiversity and the environment"
McDonald is able to align its Supply Chain Sustainability/ Corporate
Social Responsibility with its business strategy. McDonald is achieving its vision through the
following strategies:-
1. Partnerships: - Partnerships have been a source of opportunity for McDonald's supply
chain sustainability efforts.
McDonald partnered with Environmental Defense in late 1980's. Also, Mc Donald relies
heavily on partnerships with experts and NGOs to advance its sustainability programs.
2. Supplier Relationships: - McDonald's closeness with its suppliers presents an opportunity
to use their expertise to design efficient path to sustainability. They use collaboration to
establish the framework. By listening to suppliers and using their expertise, McDonald better
understands the challenges they face and helps them get past barriers like cost.

Also, because of the Leadership Position that McDonald have in its industry Mc Donald is
able to have an impact beyond its actual power. Ex:- When a Danish Fish Supplier, first tried

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to convince the European Union to enact stricter standards for fishing to ensure sustainability,
it had difficulty. But this made progress after McDonald joined. So, McDonald has earned
credibility with NGO and Government Partners.

Q3. Managers see sustainability as a constraint. What is your view on it? How can a
firm turn it in opportunity?

Ans. Managers see sustainability as a constraint because they think that a sustainable supply
chain will require a lot of money, time and complexity. Lot of investment is also required for
a sustainable supply chain. Since it requires a lot of money, firm will have to increase the
price of its product and customers will not accept it. Consumers value the environment but
they seem to value convenience and low prices more. If a sustainability project supports a
corporate goal, it will engage in it. However, if a sustainable practice threatens their quality,
safety or especially the low prices, a firm will be hesitant to adopt it. Also consumer
preferences come first, sometimes at the expense of sustainability. There is also a challenge,
making sure all interests are respected, both globally and from a local sustainability
standpoint.

Our view on it is that sustainability is that By managing and improving environmental, social
and economic performance throughout supply chains, companies can conserve resources,
optimize processes, uncover product innovations, save costs, increase productivity and
promote corporate values.

For proactively addressing social and environmental issues in supply chain develop the
strategies and tools necessary to accomplish vision of sustainable sourcing. Do this in a way
that is feasible, scientifically-based and affordable for our system. Consumers want low
prices. If a firm can provide low prices by following sustainable supply chain then
sustainability is not a constraint but if the price of a product increase then sustainability is a
constraint. Firm can turn it into opportunity-

By eliminating packaging weight or reducing energy use, it saves money.

As the firm will set the standards in consumer minds, other firms will have to follow
their standards.
By prioritizing sustainability initiatives will reinforce trust in a firms brand, its most
valuable asset.
A sustainable supply system will yield high quality, safe products without supply
interruption while creating a net benefit for employees, their communities, the
environment, and animal welfare.
The primary motivation behind sustainability efforts is preservation of natural
resources to ensure future profitability.

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Q4. Which stage of the supply chain is best suited to start developing sustainable base
and how could this stage be engaged to progress on sustainable vision?

When a firm buys raw material from a supplier i.e. the very first stage of supply chain is best
suited to start developing sustainable base. At its most basic level, a sustainable supply chain
must consistently deliver the right products at the right times. If the suppliers will think about
the environment, waste costs and risk, then only a firm would be able to maintain sustainable
supply chain.

This stage can be engaged to progress on sustainable vision by-

Signing agreement with the suppliers.

Working in partnership with the suppliers to promote continuous improvement.
Measuring sustainable supply chain performance of the suppliers and use the score to
measure, recognise, and reward the suppliers.
Making more comprehensive environmental sustainability framework for its supply
chain.
Working with suppliers to manage solid waste, conserve and protect natural
resources, and encourage environmental values and practices.

Involving with all the parties that can help achieve sustainability.
Working with suppliers to proactively manage the impacts in a positive way and
facilitating realistic solutions to complicated issues.

A firms commitment to its leadership position also builds credibility with suppliers and gives
them confidence to make the investments necessary for progress in sustainability.