Jose Rizal University

College of Hospitality and Tourism Management

HTM C309 SUPPLY CHAIN MANAGEMENT IN HOSPITALITY INDUSTRY

Supply Chain Strategic Management Plan Paper of KFC

(Kentucky Fried Chicken)

Submitted by:
GROUP 1
BARREDO, Anna Rose
CALIMPONG, Julien Yna Marie
GABRIEL, Faulyn
HIPOLITO, Precious Anne
NAVALES, Ivy
BSHM-CMGT 301S

Submitted to:
Mr. Michael Bhobet Baluyot
Professor

October 31, 2020

 ACKNOWLEDGEMENT

First of all, we would like to thank God for giving us the opportunity, knowledge, strength, and
courage to finish this Supply Chain Strategic Plan Paper. This paper could not have been
accomplished without the marvelous support and cooperation of our professor, family, friends,
and our classmates.

Our sincere gratitude goes to our professor, Mr. Michael Bhobet B. Baluyot, CHP, MSHRM,
whose profound knowledge; rigorous guidance, generous assistance and patience have
invaluable in writing our paper. His support and showing us some examples help us to complete
this project. Without his consent, the completion of this paper would not have been possible.

Furthermore, we would like to thank our classmates and friends who supported, encourage, and
helping us to work out the problems during the whole writing process.

Finally, our great gratitude goes to our beloved family and our parents for their considerations
and great confidence in us. No matter how difficult it felt, they were always there and supported
us physically and financially. Words cannot express how we appreciate this kind of help.
 TABLE OF CONTENTS

Executive Summary 1
Supply Chain Strategic Analysis
Background about the Business Organization 3
Introduction 4
Mission/Vision/Goals and Objectives 5
External and Internal Analysis (SWOT Analysis) 6

Supply Chain Strategic Formulation

Market Development Strategies 10

Process Improvement Strategies 11
People Development Strategies 12
Product Development Strategies 13

Supply Chain Strategic Implementation

Supply Chain Strategy Map 14

Supply Chain Operational Plans 17
Supply Chain Management, Systems and Practices 21

Supply Chain Strategic Evaluation

Performance Measure and Indicators 24

Risk Assessment 27

References
 EXECUTIVE SUMMARY

KFC founded by Colonel Harland Sanders in 1940, KFC is the world's most popular chicken
restaurant chain known for its Original Recipe chicken and signature gravy. Through years of
hand-breaded goodness, KFC has made its way to the hearts of Filipinos. The very first
Philippine KFC was opened in 1967. Since then, KFC Philippines has continued to grow with
over 300 stores over the country. From buckets of chicken, freshly made sandwiches, a tasty
pasta and salad creation, to well-loved fixins, KFC offers a wide menu of finger-lickin' good
meals to flavor-loving Filipinos. The address of KFC Kalentong Branch is Ground Floor, AA
Tangco Bldg., Gen. Kalentong St. corner Shaw Blvd., Brgy Daang Bakal, Mandaluyong, Metro
Manila - 1552.

In this paper, supply chain strategic analysis is being discussed that tackles the background about
the business organization, specifically the KFC Kalentong Branch, its introduction, analyzing
mission/vision/goals and objectives of the organization. Moreover, this paper provides the
external and internal analysis of the company that sum up into SWOT Analysis.

Supply Chain Strategic Formulation is composed of 4 different strategies that need to formulate.
First, market development strategies where the targets are new customers in new segments. This
can be used to expand sales through new uses of product and introduced to new customer.
Second, process improvement strategies where some strategies introduced to improve the process
of products of the organization. It is the vision, goals and, set of steps that will enable an
organization’s process to achieve a sustainable competitive advantage. Third, people
development strategies where the organization ensures that the employee is growing personally,
developing their ability to achieve more in the workplace, and meet the organization’s goals.
Lastly, product development strategies were methods and actions used to bring new products to a
market or modify existing products to create new business.

Additionally, the next part of this paper is all about the supply chain strategic implementation
that able to show the supply chain strategy map of the organization that includes the 4
perspectives, namely: financial, customer, internal process, and learning and growth. The map
shows how the firm’s will achieve its ultimate goal.

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It is also included the supply chain operational plans of the organization were the four category is
being introduced and able to identify the operation of the business. First, the plan category that
composed of demand forecasting, product pricing, and the inventory management of the
organization. Second, source category that made up of procurement of the organization only. It
describes how the organization manage inventory. Third, make category which the firm’s
product design, production scheduling, and facility management introduced being operate into
new normal. It is where the manufacturing or making of products that were demanded by the
customer. Lastly, is the deliver category, here the products are delivered to the customer at the
destined location by the supplier. This is where the customer’s orders are accepted and delivery
of the goods is planned. Under this category are the order management, delivery scheduling, and
the process returns. Moreover, supply chain management, systems, and practices of the
organization also discussed on the latter part of the paper. SCM that deals with the man-power of
the organization and what are some recommendations we can introduced to improve their SCM.
The SC Systems is all about the systems being used in the premises, the technology weather it is
existing or not and able to provide some recommendation for the betterment of their operation.
On the other hand, SC practices tackle about the best practices that the organization being used.
We also provided some recommendations there.

In the last part of the paper is the supply chain strategic evaluation were performance measures
and indicators are able to discussed, also the risk assessment that the organization might
encounter. Performance measures and indicators are connected to the strategy map that discussed
in the first part of the paper. It is also included there the four perspectives but this time, strategic
objectives is being used and what will be the key indicators to meet the specific goals being
implemented. The performance measures is just the target only and the percentage introduced
there are the one that we want to achieve. PESTLE Category is being used in the risk assessment
that will identify some of the factors or risk that organizations faced and what will be the
possible of those factors that we come up. This part will evaluate how the firms operate their
supply chain in a day-to-operation.

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 SUPPLY CHAIN STRATEGIC ANALYSIS

Background about the Business Organization

(KFC)

Harland Sanders, founder of the original Kentucky Fried Chicken, born in 1890, just outside
Henryville, Indiana. After a series of jobs, in the mid-1930s at the age of forty, Colonel Sanders
bought a service station, motel and cafe at Corbin, a town in Kentucky. He began serving meals
to travelers on the dining table in the living quarters of his service station because he did not
have a restaurant. It is here that Sanders began experimenting with different seasonings to flavor
his chicken which travelers loved and for which he soon became famous. He then moved across
the street to a motel and restaurant, which seated 142 people. During the next nine years he
developed his secret recipe of 11 herbs and spices and the basic cooking technique which is still
used today. Sander’s fame grew. In 1939, his establishment was first listed in Duncan Hines’
“Adventures in Good Eating”.

KFC also known as Kentucky Fried Chicken is a chain of fast food restaurants based in
Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed
a concept of Yum! Brands when the company was spun off from PepsiCo as Global Restaurants
Inc. in 1997.

KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is
fried chicken, KFC also offers a line of grilled and roasted chicken products, side dishes and
desserts. Outside North America, KFC offers beef based products such as hamburgers or kebabs,
pork based products such as ribs and other regional fare.

The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952,
though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the
abbreviated form of its name in 1991. Starting in April 2007, the company began using its
original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the
U.S. as part of a new corporate re-branding program; newer and remodeled restaurants will have
the new logo and name while older stores will continue to use the 1980s signage.

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 INTRODUCTION

KFC is well-known in Philippines and worldwide for its fast and efficient services, high quality
products, excellent customer service and strong financial position. KFC is a company in the
business of selling fast moving consumer goods and food processing industry (J.S. Bain, 2002).
To maintain high quality and its reputed customer service KFC has to maintain a quick, flexible,
and responsible supply chain.

KFC is a restaurant that started in the U.S in at Kentucky and later on spread and expanded and
was started in other countries. Of course, KFC deals with fast foods. We all know for the fact
that the major product that is dealt with at KFC is fried chicken. The founder of KFC was
Harland Sanders to be exact. Harland Sander’s motivation and inspiration for KFC was the fact
that he previously had been selling friend chicken to people in a restaurant and he thus thought
that KFC would be a great idea. Harland had been operating the roadside chicken restaurant at
the time when states were experiencing depression in the economy.

KFC is the home of finger lickin’ goodness in the country, serving its range of world-famous
dishes and sides to Filipinos. From the variety of finger lickin’ good chicken, well-loved fixing,
to tasty new pasta and rice bowl creations, KFC offers a wide menu to the flavor-loving.

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 MISSION

“To be the leader in western style quick service restaurants through friendly service, good
quality food and clean atmosphere”

KFC Philippines is determined to produce chickens in a healthy environment free from all
germs. It ensures high safety, hygienic and quality features while producing fried chicken foods.”

VISION

“To be the primary built in food services group in the ASEAN region providing consistent
quality products and excellent customer-focused service”.

GOALS

KFC are not only to sell chicken to make money and make a profit, they are to expand as a
business whether that’s to be a worldwide business or just to open up a few more restaurants
around the country to provide a better and faster service for the customer, to beat
competitors/rivals such as McDonalds, burger king, pizza hut etc.

OBJECTIVES

Every organization and company has some certain goals laid down by them to achieve to make it
renown and have value added services to satisfy customers.
• Build an organization dedicated to excellence.
• Consistently deliver superior quality and value in products and services.
• Maintain a commitment to innovation for continuous improvement and grow, striving
always to be the leader in the market place changes.
• Generate consistently superior financial returns and benefits of the owner and employees.

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 EXTERNAL AND INTERNAL ANALYSIS (SWOT ANALYSIS)

The table below illustrates the firm’s strengths, weaknesses, opportunities and threats.

STRENGTHS WEAKNESSES

1. The firm has developed strong brand 1. Unhealthy food menu.

equity as a result of offering quality
products and services to the consumer.
2. Establishment of a strong and efficient
interactive marketing has enabled the
firm to develop customer loyalty.
3. Well recognized among the customers.
4. Known for delicious fast food.
2. Limited menu and stick with their
original recipe.
3. Eating fried food can cause health
problems such as coronary artery
diseases’.
4. Having fewer sales as compared to
McDonald.

5. KFC’s secret recipe known for original 5. Price- may be less reasonable compared
11 herbs and spices recipe. to the same products sold by other
business.

OPPORTUNITIES THREATS

1. An unfulfilled customer needs. 1. Shift in consumer tastes, away from the

firm product.
2. Growing Market
2. High inflation rate.
3. Arrival of new technology (to maintain
the quality and crispiness of the fried 3. Emergence of substitute product.
chicken product.)
4. Political & social instability.
4. Potential to capture additional market
share. 5. Increased competition from large firms
such as McDonalds.
5. The firm can improve its public image
by updating its restaurants.

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STRENGTHS

Strengths describe the factors that which the organization is good at and what separates it from
its competitors.

1. The firm has developed strong brand equity as a result of offering quality products
and services to the consumer: Companies are continues evolving for them to cope up
they need to develop, as part of it, they need to give their strong brand equity. The firm
will generate the product to be recognizable, memorable and bring it to its superior
quality.

2. Establishment of a strong and efficient interactive marketing has enabled the firm
to develop customer loyalty: Having an effective and efficient interactive market is an
advantage to expand the business goals and objectives. Giving a way to communicate or
to reach out between the business and its customers, show different preferences and
giving information through advertisings, prints etc.

3. Well recognized among customers: Make people aware of their business especially
when targeting relevant, high-quality customers and chances to increase of creating
conversions and dominating their market.

4. Known for delicious fast food: KFC menu normally tastes good for every customer. It
becomes strength of the business because it offers a variety of food that suit to the
customer’s tastes especially among teenagers and children.

5. KFC’s secret recipe know for original 11 herbs and spices recipe: One of the best
strengths of KFC because original recipe is trade secret and a source of comparative
advantage against firm’s competitors.

WEAKNESSES

Weaknesses stop an organization from performing at its optimum level. They are areas where the
business needs to improve to remain competitive.

1. Unhealthy food menu: One of the weaknesses of KFC menu is that they offer unhealthy
food that is largely formed of high calorie, salt and fat meals and drinks. Like their menu
offering prompts protests by organization that fight obesity and hence, decreases KFC
popularity. Customers always look for healthier choices.
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 2. Limited menu and stick with their original recipe: When it comes to the menu, they
have only limited choices and stick with the original recipe. KFC menu offered an
unhealthy food that the current generation is so much health conscious.

3. Eating fried food can cause health problems such as coronary artery diseases’:
Eating fried foods increased the risk of heart attack and stroke. The customers nowadays
are more health conscious because the more fried foods they eat, the greater the risk.

4. Having fewer sales as compared to McDonald: The sales of the business is become
low than the McDonalds. It is because customer preference has changed to a large extent
that a business should focused less cost food along with healthy food to attract customers
and increase the sales.

5. Price may be less reasonable compared to the same products sold by other business:
Other customers may complain about the price being introduced because it is too high
compared to other business and it will lead to unsatisfied customer and choose another
fast food restaurant that sold for reasonable price.

OPPORTUNITIES

Opportunities refer to the factors which the organization can use to its favor to grow its market
share, sales, brand recognition etc. It’s the second most important factor in SWOT Analysis of
KFC as it will shape the future of the company’s strategy.

1. An unfulfilled customer needs: The customer's need must be fulfilled. If they can’t
satisfy the things they get, it becomes opportunities in the company. There is always
room for improvement.

2. Growing Market: Innovating and highly competitive products that continuously grow in
the market. The businesses have an opportunity to increase their rates because of
continuous growing market.

3. Arrival of new technology (to maintain the quality and crispiness of the fried
chicken product.): Upgrading the technology in order to maintain the tenderness and
crispiness of the Fried Chicken which is the KFC is known for. The use of this material
will help to serve a better quality product.

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 4. Potential to capture additional market share: Customer relationship is one of the keys
to increase the market share, a regular customer must be satisfied because if it more likely
to spread through word of mouth that will lead to gaining market share. Few brands
building in the market will become the opportunity because more customers will go
straight to the branch.

5. The firm can improve its public image by updating its restaurants: Giving
importance and focus on the organization, employees, and upgrading the restaurant will
gain reputation and improve the public image.

THREATS

Threats refer to factors that have the potential to harm an organization in the future. Given the
fact, threats give a brand a far-sighted view about the problems that the brand is likely to face in
the future; it is one of the most important factors in the SWOT Analysis of KFC.

1. Shift in consumer tastes, away from the firm product: The food trends and
preferences are changing due to the emergence of millennial. Customers are preferring
foods that are healthy in nature such as low fats and calories. These put additional
pressure on KFC.

2. High inflation rate: It is not good for the business when inflation is too high of course.
Inflation will always reduce the value of money, unless interest rates are higher than
inflation.

3. Emergence of substitute product: It is threats to the business because the competitive

structure of an industry is threatened when there are substitute products available that
offer a reasonably close benefits match at competitive price.

4. Political & social instability: This threats can have a significant impact on business that
can result friendly’ policies, changes in business taxation and regulations, or perhaps can
affect the business itself.

5. Increased competition from large firms such as McDonalds: It is not still at number
one despite of having grown very fast during the past few years. KFC faces stiff
competition from other restaurants. Competitors are introducing new food items to their
menu to grow their market share and customer base and KFC needs to be on its toes to
beat the competition.

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 SUPPLY CHAIN STRATEGIC FORMULATION
MARKET DEVELOPMENT STRATEGIES
Strategies/Activities
Up-selling to Existing Customers
Geographic Expansion
Attracting Competitor’s Customers
Attracting Non-Users
Descriptions
The business can identify customers with a real
need for additional services. The current
customer base could benefit from their new
product offering that need to consider the
relationship with the customers as a gateway to
introducing their new solution.
One way to reach a new audience with the
product is by geographic expansion. KFC
Kalentong is only targeting Kalentong
customers, by research; the business can
expand their audience on a whole level. It
creates opportunity cost by taking potential
funding, resources and time away from
investing in other strategy.
The business can create a new product that
other competitors cannot do. They can
convince customers to come by adjusting the
price, offer incentives or discounts and deliver
a superior customer service experience.
Together with up-selling, the business can also
develop a plan to target non-users of the
product. This can be achieved through a variety
of methods such as cold outreach, advertising,
and etc.
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PROCESS IMPROVEMENT STRATEGIES

Strategies/Activities Descriptions

Adopting the Business in The business needs to adopt the platform to be connected with
Online platform the customer and to attract potential customers.

Offering Promos The customer can try the products through the discount and
promos that could lead to become a repeat customer.

Building Good Relationship Good relationship between the customer and the organization
to the Customer has a big effect to the sales, through this, they can establish
regular customer that could lead to word-of-mouth marketing.

Business Campaigns It is important to have an update to your organization’s timeline

to inform the customer how the business is going.

Short Term Indicators Sources Frequency

By time, effective achieving Promos Quarterly

quick boost of sales.

By time, be able to interact to Campaigns and Update Quarterly

the customer.
Long-term Indicators Sources Frequency

By time, connected with the Adopting the Business in Daily

customer and to attract Online Platform
potential customers.

By time, can establish regular Relationship to the Customer Daily

customer that could lead to
word-of-mouth marketing.

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PEOPLE DEVELOPMENT STRATEGIES

Kentucky Fried Chicken has extensive program prepared for the services crews or food service
workers in customer service, health and safety, cleaning procedures, and food preparation. After
many years of existence, KFC still holds the philosophies and values of hard work and excellent
customer service that Colonel instilled in all its stores around the world.

Employee development is paramount to the success of any business or enterprise. In many

regards, employees can either make or break a business. After all, workers frequently interact
with customers and handle tasks that are critical for general performance and professional
functionality. In many regards, employees greatly control or influence a company’s culture. The
people who work for a business and handle many of the mundane, day-to-day operations often
determine the daily energy and environment.

Strategies/Activities Descriptions

Collaboration with other organization

Involving with Different Organization in
Terms of People Development
increased productivity of the business.
Working together makes everyone wins and
synergy manifests itself in reduced costs,
flexible in adapting some changes, and can
increased capabilities.

The business can track and report on training

program. It is being used when recruiting new
Build a Learning Management Program
employees but they can also use external
customer-facing training sessions.

The business can use skill gap analysis to

classify the skills and competencies of their
current workforce. It ensures their workforce
Conduct a Skill Gap Analysis
as the skills to succeed as job roles change over
time. It helps the organizations and their
employees continue to grow and learn in
today’s fast-paced world.

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PRODUCT DEVELOPMENT STRATEGIES

The brand platform chosen for all communications was ‘That chicken urge can only be satisfied
with the irresistible, indescribable taste of KFC’. This was indeed a radical step - doing the exact
opposite of competitors and in the face of popularly-accepted consumer trends. While
competitors attempted to embrace healthy eating trends, KFC repositioned itself around the fact
that its product tasted delicious. In other words, KFC became proud of its chicken again,
reminding people about the heart of its brand and simultaneously connecting with what
consumers sought from the fast food market.

Strategies/Activities Descriptions

Creating a new version of an existing product

with minor improvements will inspire the
Modify an Existing Product
customers to buy an upgrade one. Modifying
the current products and relying on the changes
of the business ads influences customers to try
the latest version of the product.

Engaging customers by including additional

Increase Product Value
value with the purchase of a product. The
business can increase value by a larger quantity
of product, adding customer support or
offering premium offers. By this, new
customers may attract to the product because
of the added benefits, while the existing
customers may purchase again to receive great
deal.

The business can allow customers to

Specialize and Customize personalize the products to fit their needs and
lifestyle that can encourage them to choose that
product over a competitor.

Create New Products This is by relating to the market. By this, any

new products should complement to the
current product that does to the customer
instead of replacing the original.

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 SUPPLY CHAIN STRATEGIC IMPLEMENTATION
STRATEGY MAPPING OF KFC RESTAURANT

KFC RESTAURANT STRATEGY MAPPING

Long Term
Profitability Strategy Business Value Productivity Strategy
FINANCIAL

Improved Improved cost

Cost Increase Asset
profitability structure
reduction Utilization

CUSTOMER VALUE PROPOSITION

CUSTOMER

Price Quality Function Service Image

s

Product/Service Attributes Relationship Image

Customer Innovation Regulatory and

Operations Management Social
INTERNAL
PROCESS

Supply Growth Opportunity Environment

Production Productivity Identification Safety and
Distribution Sustain Design/Develop Health
Risk Management Launch Employment
Community

Human Capital/ Information Capital/ Organizational Capital

LEARNING

GROWTH
AND

Culture Leadership Assessment Training

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FINANCIAL

The financial perspective indicates whether the business’ strategy and operations add value to
shareholders. The theory for financial perspectives that brings up objectives for a business unit is
improved profitability, cost reduction, increase asset utilization and improved cost structure.

Improved profitability can help the business to reduce costs, increase turnover and productivity,
as well as help to plan for change and growth. The business can review the areas of business
waste and reduce them such as power supply costs. It is important because it provides an
indication of the health of a business’s sales and it is an effective method of assessing how
successfully a business is at selling its own product and services.

Cost reduction helps the business to reduce the cost of operation. It helps also to set competitive
price of product or service as well as increasing market share and profit or return in the industry.
It provides more money for labor welfare schemes and able to improve management relationship.

Increase utilization and improved cost structure added to financial because it can be used to
extend the useful life of capital equipment for greater return of assets. This is the key indicators
especially in manufacturing space because it improves energy consumption to reduce costs and
increase profitability.

CUSTOMER

The customers is closely linked to conventional marketing strategy of gaining a competitive edge
through various practices, such as identifying the best target customer group through
segmentation and providing different product combinations for different customers segment, e.g.
high-end and low-end goods.

The attributes added are the product/service such as the quality and functions of what is sold.
Customer relationships is how a business handles its customers and how they distinguish
themselves while excluding the product or service, and what goals the company can strive
towards presenting the correct image to its customers in order to achieve the objectives of the
company.

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INTERNAL PROCESSES

The internal business process addresses long term issues in a company strategy. While financial
is mainly short term with slight focus on the long term. The customer and internal processes
focus more on long term competitiveness. The internal processes addresses for innovation, to be
able to compete in the future, beyond the short time frame that a focus on financial numbers that
some control systems focuses on. Innovation is not only about the functions in a product or a
service delivered to a customer, but also about predicting and shaping future demands from its
customers.

In order to be able to influence customer demand in a way that enables a business to gain a
competitive advantage over the competition, the operation process refers to activities that are
also listed in the financial and customer sectors, the production of products and the distribution
of goods, but the emphasis here is on the production and workflow of the company and how they
can enhance it in order to produce superior value to its cost.

LEARNING AND GROWTH

The last is the learning and growth. This is the main supporting function amongst the four and it
focuses on employee capabilities, information system capabilities and motivation, empowerment
and goal alignment. Employee capabilities address the importance of having competent
employees that has the knowledge, skills and authority to interact with customers. Motivation,
empowerment and alignment are the last main categories of the learning and growth perspective.
These categories address the importance of keeping satisfied staff, as satisfied staff will perform
better in their interactions with customers, creating a circle of positivism. The first two
categories, motivation and empowerment, highlights the importance of creating a sense of
responsibility in managers as well as front line personnel. Alignment brings us back to the topic
of goal congruence, a common point where an implementation of a management system can fail
is the lack of alignment between personal goals and corporate goals in an organization.

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 SUPPLY CHAIN OPERATIONAL PLANS

As a fast food supply chain, KFC had unbroken reputation in global market share because of
their strong operation management. To continuously maintain customer requirements, the
companies have to maintain unbreakable supply chain to make fast food like Krushers, French
Fries, Chicken buckets, Ice Cream and etc. The operation management takes part to know the
quantities of daily, weekly, monthly and annually requirement of demand and supply.
Furthermore, through the Operation management system, the company got to know the pattern of
goods utilization. It was directly push the company to planning, organizing, managing
controlling and supervising of the whole business process.

PLAN CATEGORY

➢ Demand Forecasting

A demand forecast shows the shape of the day and the anticipated demand. That way, managers
can see exactly how many employees they need in each area to meet that demand. It also takes
into account exactly how much time employees need to deliver each activity. In this current
situation that we are facing right now due to COVID-19 pandemic, the restaurant needs highly
accurate forecast for the supply needed because it is so hard to forecast today. Due to many
restrictions when it comes to delivery, sourcing of raw materials and bring it to the restaurant is
hard.

➢ Product Pricing

The target audience of KFC is middle and upper middle class and prices their products
accordingly. There are different pricing strategies that KFC uses for its products and its variants.

Optional Pricing: Optional pricing is basically used by companies to attempt to increase the
amount customers spend once they start to buy. Optional ‘extras’ increase the overall price of the

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product or service. In KFC’s case, customers can buy the main items present in their menu and
can then opt for “extras” or “sides” like drinks or desserts which go well with the main item that
they purchased. The end result is that the customer ends up paying for the main item that he/she
wanted to buy and also for the add-ons.

Bundle Pricing: KFC bundles different products together and offers it to customers at a slightly
lower price. KFC provides different combo offers to its customers and also provide an option to
its customer to make the combo of their own choice.

➢ Inventory Management

The restaurant follows Just in Time (JIT) and First in First out (FIFO) to manage inventory.
Inventory, is divided into three types consisting of Daily, Weekly and Monthly inventory. The
daily inventory consists of fast moving products like Krushers, Non-veg items, ice-creams.

Here the orders are placed by the inventory department every night after the restaurant closes for
customers. The requirement sheets are filled in order to place the order and products are moved
from inventory. The weekly inventory consists of Dry storage items like disposal plates;
equipment and recipes needed to cook. The requirement sheet is filled while placing order which
is placed every Thursday and the products reach the outlet to the max by Monday or Tuesday.
The monthly inventory consists of detailed stock verification of the items present in the store and
the products disposed of due to non-consumption on reaching the standard time are also
recorded. The restaurant needs to check inventories always if the supply needed for customers is
enough to cater the demand of the products.

SOURCE CATEGORY

➢ Procurement

The organizations are struggling to keep pace with new shifts and disruption in the procurement
and the processes of supply chain. Due to COVID-19 pandemic, some companies are adopting
AI-driven procurement processes that enable them to select a cheaper supplier.
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They can site multiple suppliers’ sources to procure raw materials that needed in the restaurant to
operate daily. Adopting intelligent digital methods will enhance value. The date-driven will
includes identifying opportunities, ensuring fact-based decisions, and coming up with results that
can be tracked and measured.

MAKE CATEGORY

➢ Product Design

The design of the product of KFC is still the same which influence by the needs of customer.
Due to customers demand, KFC has enriched its menu with other products such as chicken
burgers and wraps, desserts, side dishes, and drinks. The service accurately designed to gain a
competitive edge in the market and appeal more to customers.

➢ Production Scheduling

The restaurant needs to come up with proper scheduling when it comes to their production; this
is for the operation process flow with maximum efficiency, by balancing the production needs
with available resources in the most cost-effective manner because it’s hard for the organization
to produce goods and services due to the pandemic. By this, it is making sure that orders are
fulfilled in the most efficient way, without interruptions, delay or even stress.

➢ Facility Management

Nowadays, KFC Kalentong Branch was able to manage their facility in accordance with the
safety protocols implemented by the Government. Before entering in the restaurant, checking
temperature is a must. Inside the premises, social distancing is required by stepping into circle to
avoid contact with other people in a short distance. Also in the counter, they put shield screen
and it can see that the employees are following the protocols properly while conducting their
operation inside the facility. The table is also put into single availability and the workers are
wearing mask and face shield. This new normal was put the restaurant into positive one because
they were able to management the facility very well and it well-organized for the customers as
well as the employees.

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DELIVER CATEGORY

➢ Order Management

When customers order inside the restaurant, still there is a safety protocols that they need to
follow. Such as, the payment is put in the small plastic plate after ordering, the customers must
go to other side to wait their order or sit a while for number to be called. This for avoid
overcrowding inside the restaurant and also to minimize the volume of customers. The
restaurants manage the customer orders by following safety protocols. When it comes for
ordering online, they have the same process but if the location is closed for other people, the
customers who purchased the products need to meet up in the location that is allowed. This order
management is the process of the restaurant of receiving, tracking, and fulfilling customer orders.

➢ Delivery Scheduling

The type of deliveries used by the KFC Kalentong Branch is direct deliveries which are sent
directly to customers when ordering through online. The delivery and online pick-up opens at 9
AM until 1 hour before the regular closing time. The business still follows their schedule in
delivering goods and services and for now they will able to include some safety protocols. Also,
30 minutes delivery time is temporarily suspended due to pandemic. It is because the company
needs to ensure the safety of their man-power.

➢ Process Return

Considering of what we are facing right now, there are some customers that still returning their
items once it delivered to them. In the case of KFC Kalentong Branch, they are not required to
provide a refund or replacement if they will change their mind. However, they can choose a
refund or exchange if the products has a major problem. This is when the item has a problem that
would have stopped someone from buying the products if they had known about it.

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SUPPLY CHAIN MANAGEMENT, SYSTEMS AND PRACTICES

SUPPLY CHAIN MANAGEMENT

The supply chain management of KFC Kalentong Branch is adopting the democratic
management style which allows workers to delegate to other members of the company to get
things done. The form of democratic management style is responsible and is more successful
when the authority carry out the mission is provided at the same time. KFC attaches great
importance to the well-being of employees. However, autocratic leadership style is being used
also that KFC organization conditions are dangerous, rigid rules can keep people out of harm’s
way. Many times, the subordinate staff is inexperienced with the type of work and heavy
oversight is necessary. Also, the motivational theory is being used within the KFC. Employee
motivation is a process to stimulate a person working in an organization to act towards some
desired purpose or goal and change the behavior of employee in some desired way such as
acknowledging professional achievement, encourage friendly competition, and many more. The
communication channel between the manager and employees is relatively open that clearly
displays a rigid and strong culture. Additionally, the managers of the restaurant always keeping
the employee into orderly and focused on organization goal. The organization in KFC Kalentong
is complex and very clear. It because it depends on the reward system and it’s really obvious to
the employees that just follows the rules then they will be rewarded. At KFC, all employees
receive initial training that covers food safety, business familiarization and online testing. The
training is web-based in virtual reality classrooms where future employees are prepared. After
employment, team members continue their training through a program called CHAMPS.

All of the management stated above is well-managed by the organization and always come up
with best communication or management to be effective and efficient in day-to-day operation.
We would like also to recommend to the managers when it comes to their employees to treat
them in a nice ways in all things that matter and if they did something wrong or not following
some rules and regulation, just talk to them one on one in a private place not shame them in
public. Be professional enough to handle employees.

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SUPPLY CHAIN SYSTEM

The supply chain system being used by KFC Kalentong Branch is Point-of-Sale (POS) System.
This system helps the restaurant management to track the daily sales, inflow and outflow of the
cash, orders or raw materials, sales of specific food product, and etc. It is directly transmitted to
the kitchen when a customer places an order. It has fill efficiency in the operations by
minimizing the time of entering the food to the order fulfillment of customers. The restaurant
also is offering the free Wi-Fi as an incentive to attract customers to surf the net at KFC premise
and at the same customer will buy some food and drinks. Additionally, the systematic approach
of taking order at KFC Kalentong Branch is going to the counter, order products, get receipt and
number, sit down and wait the number to be called. By online delivery, phone call of customers,
request order, cancel or place an order and choose specific order type. The reward system is
being used too that employees are motivated because of the system. They reward the employees
in terms of promotion, incentive, and payoff free meals depending on the level of the employee
and how much they perform their job well.

The existing system used in the restaurant has managed the operation efficiently and effectively.
Therefore, we would like to recommend that the system needs a reliable connection and internet
service provider to ensure the uninterrupted workflow of the system. Having this kind of
technology can give advantage to the business, however strong internet connectivity must need
to maintain all the time. Having said those ordering, this system can often become a complete
mess due to corrupted software application that makes the whole system collapse. Therefore,
KFC needs a back-up plan about those kinds of problems that might happen. They can make a
chose another way to order such through email or any form of delivery channel that can be used.

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SUPPLY CHAIN PRACTICES

The company has these practices that look after the safety and health of the workers. Since KFC
is one of the fast food chains, then its workers inside the restaurant are very busy, the
organizations need to protect their respective employees from potential hazards in the workplace.
Additionally, KFC always ensures that their employees work for voluntarily, it means that the
company detests forced labor. Also inside the premises, it always been fair and few employees
complain about how the organization handles such unusual occurrences. Moreover, some of the
best practices they have used are speed with service that requires a sense of urgency mindset so
every employees of KFC has this kind of practices to do the job properly. Training is a must also
because the more training a team member has the more comfortable they are in their job duties
and of course they able to perform better.

All of the practices above that used by the organization is good enough to manage their man-
power efficiently and effectively. That practices will able to give good performance to the
organization as you can see that the employees are really well-trained to perform their tasks in
day-to-day operation. We recommend to the company to improved more their practices so that
no one will left behind and every workers have the guts to give their all powers for the services
they operated and can give satisfaction to customers and by that the availability of increasing
sales. Improving in terms of motivating the employees after the working hours, by just saying
you did a great job. By that, employees have desires to do their job without worrying the
performance they do.

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 SUPPLY CHAIN STRATEGIC EVALUATION

PERFORMANCE MEASURE AND INDICATORS

STRATEGIC OBJECTIVES KEY PERFORMANCE PERFORMANCE

INDICATORS MESUREMENT
TARGET
Profit and revenue growth % Net profit margin 10%
$ Net cash flow 6%
FINANCIAL

Lower production costs % System labor cost 15%

% Production costs 8%
Sell more profitable products % Margin upgrade 5%
% Revenue target 10%
Increase customer satisfaction % Survey excellence score 30%
% Call abandon rate 15%
CUSTOMER

Brand recognition # New customers 6%

% Market share 3%
Increase sales $ Revenue per client 5%
$ Ave. customer asset 5%
Improve service delivery % Active projects running 70%
on-time and on-budget 50%
INTERNAL
PROCESS

% Process optimized 8%
Build strong system management % CHAMP 75%
% Internal Audit Rate 85%
% Service Rate 80%
Improve knowledge and skills % Employee retention 90%
LEARNING

GROWTH

% Employee promotions 30%

AND

Nurture high performing % Employee satisfaction 75%

employees % Employee turnover 9%

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FINANCIAL

Financial performance measures the business strategy, implementation, and execution that
contribute to bottom-line improvement. We stated its financial goals simply: profit and revenue
growth, lower production costs, and sell more profitable products.

Profit and revenue growth are measured by net profit margin and cash flow with the target
performance measurement of 10% and 6%. Lower production costs are measured by system
labor costs and production costs with the target performance measurement 15% and 8%, while
selling more profitable products are measured by margin upgrade and revenue growth with
targeting 5% and 10% in performance measurement.

CUSTOMER

Many businesses nowadays have the mission that focuses on the customer. The most typical
mission statement is “To be number one in delivering value to customers’. The business provides
value to its customers and determines the level of customer satisfaction with the company’s
products or services by monitoring through customers perspectives. Of course, the customer
satisfaction is an indicator’s of the company’s success. This is by how well a company treat its
customers can literally affect its profitability.

Customers’ goals simply: increase customer satisfaction, brand recognition, and increase sales.
Increasing customer satisfaction plays a vital role for all the businesses. It acts as a key
differentiator that enables the business to attract new customers in a competitive business
markets. Of course, it is not only leading indicators used to measure customer loyalty and
retention rather can be used to identify unhappy customers, reduce customer losses, and negative
word of mouth whilst increasing revenue. Brand recognition is really important when launching
new goods and services because it attracts customers’ decision when differentiating between
competing companies. It also encourages repeat customers and leads to increase in market share.
On the other hand, increasing sales build loyalty and trust between customers and business. To
increase sales, the business has to introduce new products and services, expand market share, and
increase marketing activities or improve customer service.

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INTERNAL PROCESS

A business’ internal processes determine how well the entity runs. We put some objectives in the
performance measurement and indicators to helps evaluate the company’s products and services
and determine whether they conform to the standards that customer desires. These objectives
help the business to formulate marketing strategies and pursue innovations that lead to the
creation of new and improved ways of meeting the needs of customers.

We include improve service delivery and building strong system management. The business
needs to measure the performance and continuously improving service delivery to achieve
customer service satisfaction and can also increase sales. They need also to empower the
customers with one step at a time, they can grow a rich, continuously self-improving knowledge
base from which the business can provide customers with highly effective service.

Building strong system management such as information management can give advantage to the
business by proper handling and disbursement of information. The business must establish a
system that allows information to flow freely to the customers, employees, and suppliers.

LEARNING AND GROWTH

In these perspective is important in optimizing the objectives with favorable results. The personal
will demonstrate high performance in terms of leadership, the entity’s culture, assessment, and
training sets.

This is the foundation in any strategy and focuses on intangible assets of an organization, mainly
the internal skills and capabilities that are required to support the value-creating internal
processes. We include 2 objectives for the business to achieve: improve knowledge and skills
and nurture high performing employees. These objectives will really help the business to achieve
a competitive advantage towards competitors because the operation within the business starts
with the man-power. The sales will tell how the organizations manage its employee within the
different department.

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RISK ASSESSMENT

PESTLE FACTORS POSSIBLE SOLUTIONS

Following the restrictions of the health

and safety regulations is the company’s
Health and Safety Regulations
top priority. From packaging,
distribution, and employee responsibility
POLITICAL in handling food products.

Tax Reforms The business can reduce tax reform

evasion and avoidance, and allow for
more efficient and fair tax collection that
can finance public goods and services.

The Government can use wage and price

controls to fight inflation. They can also
Inflation Rate
employ a monetary policy by reducing
the money supply within an economy
ECONOMIC via decreased bond prices and increased
interest rates.

Consumer Disposable Income The best way to increase disposable

income is by spending less. By this, it
will not require longer hours or incur
any extra tax.

It affects the restaurant menu. By this,

Nowadays people are more health
the business will prefer organic food
conscious. lover to increase the customer base.
SOCIAL

People are always busy in their routine

People busy lifestyle and late hours
work in the office.
and have no time for proper food,
workout or sleep. The restaurant must
prefer carbonated drink and coffee in
their routine

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 By installing CCTV Cameras control
with mobile phone, they can have a
Rapid Technology Advancement
closer look at their employees and other
operations. They can use also a manual
TECHNOLO- register to take care of the restaurants.

GICAL
The business can showcase their full
menu online. They can also provide
Changes in Technology
nutritional information about each
offering such as the calories of
individual meats, veggies, and other
meals.

Consumer Protection Laws It aimed at ensuring that consumers are

protected. Designed to hold sellers of
goods and services accountable when
they seek to profit.
LEGAL
Protect consumer against unfair
discrimination at work and when
Employees Protection Laws
applying jobs. It ensures that no one is
discriminated against on the basis of
such things as age, religion, and etc.
Also employees receive protection from
dangerous machines.

Food Waste Management Policy Improper storage leads to a massive

amount of food waste. By this, the
business can store food correctly.
ENVIRON-
MENTAL Come up with a plan regarding the
weather condition such as if the storm
Weather/Changes in Climate
strike, they able to understand the
Conditions employees and customers may be
distressed and this will give positive
impact to the brand.

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