Day 125 - 12 May 95 - Page 37
1 what it became. Far from winding up the disorganised
2 cluster of independent suppliers, McDonald's created what
3 even most of its competitors concede as the most
4 integrated, efficient and innovative supply system in the
5 food service industry". Presumably, you would agree with
6 all of that?
7 A. Oh, absolutely.
8
9 Q. Then it goes on: "Today that system is increasingly
10 responsible for preserving McDonald's as the industry's
11 standard setter on uniformity of product. In the 1950s
12 McDonald's achieved its extraordinary consistency by
13 devoting more attention than anyone else to field service
14 and training at the store level, but beginning in the late
15 1960s the chain began shifting some of the labour involved
16 with food preparation at the stores back to the food plants
17 that supplied them. Products were produced in a more
18 standardised fashion and in the manner that made food
19 preparation in the store nearly fool proof.
20
21 Production was concentrated in huge plants devoted
22 exclusively to McDonald's. By the mid-1980s McDonald's had
23 converted its distribution system into the marvel of the
24 food processing business. It had reduced its beef
25 suppliers from 175 to just five, all of which run hamburger
26 plants that are among the largest and most efficient in the
27 meat processing business". Presumably, you would agree
28 with all that?
29 A. Yes.
30
31 Q. In terms of the quality of the product, when it reduced
32 its beef suppliers from 175 down to five, which is quite a
33 dramatic reduction, that did not all happen in one weekend,
34 did it? That was a process, presumably?
35 A. Ask that question again?
36
37 Q. Sorry. When you had, whatever it was, somewhere near 175
38 beef suppliers producing your products for you -----
39
40 MR. JUSTICE BELL: It was put to you it did not happen
41 overnight. It could have been the story of the late 20th
42 Century that you have fewer and bigger suppliers of
43 everything?
44 A. Yes, it did not happen overnight. We wanted to ensure
45 that we had adequate supply to our restaurants, so that
46 adequate notice was given to some of the local suppliers so
47 that they could deplete their inventory; they knew ahead of
48 time when they were going to lose us as a customer which
49 gave the meat supplier, the frozen processor, an ample
50 opportunity to take on the additional restaurant. So, it
51 was done in a fairly orderly fashion; the time frame of
52 which I am struggling to recall, but I want to say it was
53 within a two or three year period of time, if that long.
54
55 MR. MORRIS: I think the implication here was round about the
56 mid-1980s, early to mid-1980s, that process took place?
57 A. That is right.
58
59 Q. Or dramatic reduction of suppliers.
60 A. That is about right.
