McDonalds Australia Featured in Popular Series of Magazines, Australia's Best

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Bean Media Group, publishers of the market-leading series of publications entitled Australia's Best, have confirmed an editorial feature on McDonalds Australia in their latest issue of Australia's Best, released late July 2008.

Australia's Best have released their latest edition of the popular series of business magazines with an in-depth editoral focus on McDonalds Australia. The editorial discusses the importance of key suppliers to the company.

McDonald's Australia is a franchise operation with around two thirds of restaurants in Australia owned and operated by Australian small business people. Each of these restaurant owners have the freedom and flexibility to run their restaurants as they see appropriate within the framework set down by McDonald's Australia.

"First and foremost, we believe in a "partnering" approach - developing a long term relationship with our suppliers. This means that we engage suppliers from a climate of trust and respect, that we include them in our business planning and developing solutions, and that we work with them in a manner that provides continuous improvement.

Suppliers are without doubt critical to the success of the McDonald's franchising system and are viewed as equally important contributors to the success of the corporation and the restaurants. Our Founder, Ray Kroc used the analogy of a 3-Legged Stool to illustrate the important role suppliers have within our system. One leg represents the restaurants, the second leg the corporation and the third leg represents the suppliers. The 3-Legged Stool is our system belief that for one of the legs of the company to be successful, all three of the legs must be successful.
Our fifty-three year history has proven the value of this approach to business. It may be harder to keep this perspective when times are tough, but it has been proven to be the most effective approach."

"Transactional, requests for tender, partnership, joint ventures, and vertical integration are all different types of business dealings that we have, or different approaches to doing business. McDonald's uses all of these, some every day, others from time to time depending on the product, market conditions and so forth."

Partnering is the type of approach to doing business that McDonald's chooses to take with key products. Partnership is defined as follows:

The key elements of partnership are; developing a relationship based on trust and openness as well as sharing the risk and sharing the reward. The bottom line is that McDonald's want to deliver a competitive advantage and we believe that we can achieve a better result or a greater advantage by working together with our suppliers and adopting the partnership approach.

"McDonald's does not own any businesses that supply to McDonald's, however there are suppliers that have facilities dedicated to McDonald's production. It is our relationships with our suppliers that make it possible for McDonald's restaurants to serve consistently safe and high quality food. We aim to ensure our supplier relationships are long-term and mutually beneficial. It is important to us that our suppliers operate sustainable and profitable businesses and benefit from their partnership with McDonald's.

"We know that our influence in the marketplace brings with it a responsibility to ask for more than quality and price. Our progress in relation to a socially responsible supply system is motivated by our commitment to our customers, leadership on sustainability issues and our desire to 'do the right thing'.

"Our vision is a food supply system that profitably yields safe high quality food products without supply interruption whilst creating a net benefit for employees, their communities, biodiversity and the environment.

"Developing a sustainable food supply is an important priority for us. This brings with it numerous challenges and opportunities. We expect our suppliers to share our core values - and they do - and we are working in partnership with them to address the challenges of ensuring a high quality, sustainable supply system.

"In the same way that our menu and commitment to customer choice has developed considerably over the past few years, we are embarking on another journey to meet the needs of our environment while maintaining the large volume of quality produce that we require for our customers.

"We are making progress and we expect to see some significant developments over the next few years. Our recent switch to sourcing Rainforest Alliance CertifiedTM coffee beans for McCafe is an exciting and important step in the right direction.

"Likewise, our international fish team is currently developing sustainability standards in relation to farmed fish and is in dialogue with the Marine Stewardship Council regarding endorsement of our programs. And these issues don't only apply to our food suppliers - currently our major carton board supplier is working towards certification with the Forestry Stewardship Council at the moment.

"Global guidelines are in place to articulate our social responsibility efforts with suppliers and, in Australia; we have well established programs in place to assist our suppliers to understand and meet our expectations and to monitor their progress. These guidelines focus on three key areas: social, environment and animal welfare. Social Accountability Audits are conducted regularly with our core suppliers to ensure they are meeting our social responsibility expectations.
Over the past four years over 200 hundred Social Accountability Audits were conducted.

"In Australia we also have specific issues relevant to our country and climate that we are working with our suppliers to address. The challenges with drought and water availability present real issues for farming in Australia and we are working with our produce suppliers to develop a strategy for sustainable supply of produce.

"The food we serve our customers everyday is critical to the sustainability of our business. Among other reasons, our customers keep coming back to our restaurants because they enjoy and trust the food we serve them. This means the choice of food we offer, the quality of our products; our safety standards and our produce supply are all ongoing priorities for us.
At McDonald's we have a responsibility to partner with suppliers that operate ethically, and to leverage our influence as a purchaser to help shape social, environmental, animal welfare and food safety and quality issues.

Ray Kroc, our company founder summed up the partnership approach simply as 'None of us are as good as all of us'."

A number of key suppliers were selected for involvement within the feature, including Australian Frozen Foods, Detpak, Fonterra, Heinz, Golden State Foods, Keystone Foods, McCormick Foods, Perfection Fresh, Novo Foods and Coca Cola Amatil.

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CHRIS DUTTON
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