Monday, July 21, 2014


A food retailer like McDonald's depends on suppliers for its fare.  The fast-food chain sets standards for quality and cleanliness and suppliers pledge to abide by them.  To make sure, restaurant companies audit suppliers regularly.  Still, it is possible for suppliers to cheat when not watched.   That is why this incident is maddening for McDonald's and Yum brands.  It is expensive to stand over a vendor's employees to make sure they are following rules.  Yet, that is what the fast-fooders might have to do.  They cannot continue to grow in China if they are compromised regularly by their supply chains.  It seems part of the problem is cultural.  Chinese employees might not be concerned about picking something off the floor and throwing it back onto a conveyor belt or mixing old meat with new.  The vendor, OSI Group LLC, works around the world, and it is unlikely that it tolerated what its workers were doing.  Almost certainly, it didn't know.  This means management at the Chinese plant was lax and should be changed.  Now, McDonald's and Yum have to rebuild their reputations in China.  It won't be easy, but one can be certain they will watch their suppliers closely.


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