The urgent case for stronger quality control in the supply chain

On November 16, 2024By Littum

As an Efficio consultant, I have had the chance to travel a lot around the world. Seeing different places can be incredibly enriching and bring moments of culture shock as you adapt to different cultural norms and customs, such as the local cuisine. Yet any traveler will tell you that one constant around the world is the unwavering consistency of McDonald’s food. It is widely recognized as a key factor in the brand’s success – wherever you are, from Kolkata to Cali, you know exactly what to expect at a McDonald’s. This requires an incredibly well-oiled supply chain and processes. Anyone who has worked behind the counter of the Golden Arches will also tell you how robust and meticulously detailed their processes are, from the number of seconds a burger needs to be fried to the cleaning procedures.

The entire McDonald’s supply chain is known for its excellence. A highly sophisticated system is used to monitor its supply chain so that it can track inventory and identify exact locations of items at all times. This tracking capability enables McDonald’s to balance the stocks in different restaurants and when a problem occurs, to know exactly which products are there and to recall them immediately.

Yet that sophistication didn’t stop the fast-food giant from experiencing an E. coli outbreak recently linked to its Quarter Pounder burger. McDonald’s response was very quick, halting sales of the Quarter Pounder as soon as a case was reported and quickly identifying the source of the outbreak: sliced onions. The outbreak was traced to Taylor Farms, McDonald’s supplier of fresh onions, among others. The number of people affected quickly rose to 75 in 13 states. Although McDonald’s acted quickly, the incident caused an immediate drop in customer visits — 10% nationwide and 33% in Colorado, where the outbreak occurred. Such incidents can have long-lasting effects on the brand’s reputation, and McDonald’s has since launched campaigns to reassure customers of its commitment to food safety.

The outbreak exposed vulnerabilities in McDonald’s supply chain that we believe are likely linked to human error. Because of the location of the farm in California and the outbreak in Colorado, we know that contamination was not due to harvest, but occurred further along the chain—perhaps during handling, temperature control, or packaging. Contamination could have occurred anywhere in the chain, especially during a busy period. Although McDonald’s has strict food handling protocols, including checklists and timeframes for moving products to coolers and additional inspections before filling, these procedures may not have been strictly followed. Due to their fast-paced, high-volume nature, fast food chains are particularly vulnerable to such breakdowns; even a minor breach in protocol can lead to far-reaching consequences.

McDonald’s reliance on a single supplier, Taylor Farms, for fresh onions introduces significant risk. The quick action by McDonald’s prevented a major crisis, but the incident underscores the need for a more diversified supplier base. If this contamination had affected a larger or more widespread part of the menu, the consequences could have been even more serious. In the aftermath, McDonald’s has alternatives for sourcing, but more supplier diversity would reduce the risk of relying too heavily on a single provider.

To minimize risks, McDonald’s could strengthen its cross-checking protocols across the supply chain. Although onions are carefully inspected in facilities – where they are peeled, washed and cut – it is possible that only a single sample from the lot was tested, allowing other contaminated parts to go undetected. Increasing the frequency of audits and increasing the transparency of who manages storage and transport will help mitigate these risks. In addition, proactive management of supply chain risks rather than reactive measures is essential as global consumption grows. For fast food chains like McDonald’s, with its high-speed service model, even a small mistake can have widespread effects, underscoring the need for a proactive, robust approach to food safety and supplier diversification.

Here are some other tips and takeaways for those working in the food ingredient supply chain:

Avoid looking at a single source or sole source supplier under any circumstances unless it is monopolized;

Utilize automatic temperature tracking from loading point to delivery point, which would trigger any risk of contamination of the product;

Increase all franchise food safety tests and checks by three times instead of the random franchise checks which, assuming based on standard practice, are only two times the maximum;

Implement cloud-based adenosine triphosphate (ATP) transparency monitoring system to record the controls to ensure surface/equipment cleanliness, water monitoring and outdoor harvest on farms are always 99.99% free of contamination (including trucks);

Add camera deployment to the truck’s cargo area to provide transparency and visibility of handling to avoid mishandling or sabotage.

While McDonald’s has built an impressively robust supply chain that has driven its success and consistency across the globe, incidents like the recent E. coli outbreak underscore the complexity and vulnerabilities of such a large, interconnected network. The brand’s quick response and commitment to strict food safety measures demonstrates its dedication to maintaining consumer trust, but this event underscores the need for continuous improvement. Enhancing supplier diversity and implementing proactive quality controls can further strengthen McDonald’s resilience to potential disruptions. As global demand and expectations for safety grow, McDonald’s – and the fast food industry as a whole – must continually evolve to address supply chain risks and maintain the standards that have made the brand iconic worldwide.

AUTHOR BIO

Barbara Guignard is principal at Efficio and has over 18 years of experience in purchasing. She leads large, international procurement transformation projects across multiple sectors with a focus on the food, retail and manufacturing industries. Barbara’s primary areas of focus are Procurement Transformation and Strategic Sourcing, particularly in connection with international organizations and mergers and acquisitions.