SUPPLY CHAIN ANALYSIS OF KFC

Kentucky Fried Chicken (KFC)

Jalan Besar, Pekan Pasir Mas, 17000 Pasir Mas, Kelantan

GROUP MEMBERS MATRIC NO.

SITI SARAH BINTI ISMAIL 279341

AMIRA BALQIS BINTI NORSALLEHIN 282095

TAN XIAU JIA 281975

 TABLE OF CONTENTS

CONTENTS PAGES

TABLES OF CONTENTS……………………………………….………………. i

1.0 INRTODUCTION……………………………………………………………… 1-2

2.0 BACKGROUND OF KFC……………………………………………………….. 2-3

3.0 METHOLOGY…………………………………………………………………… 4

4.0 BUSINESS SUPPLY CHAIN MANAGEMENT SYSTEM…………………… 4-10

5.0 CONCLUSION…………………………………………………………………… 10-11

6.0 REFERENCES…………………………………………………………………… 12-13

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1.0 INTRODUCTION

The group report objectives are we need to know how the KFC company to get the

supply chain from which company and how they process it. The meaning of supply chain is

to process the procuring materials of organization, transforming raw materials into

intermediate and finished products, and distributing the finished products to customers.

Furthermore, we also need to recognize whether it is upstream or downstream of their

supply chain. The suppliers of the organization and the suppliers’ is including in the supply

chain's upstream process and the procedures for maintaining relationships with them. The

downstream component consists of the final users to supply and deliver products by the

companies and procedures.

The supply chain management system has been used by them in their business.

Supply Chain Management Systems for better maintain relationships with their vendors,

businesses use Supply Chain Management (SCM) systems. These systems allow

manufacturers, buying firms, manufacturers and logistics companies to efficiently share data

on orders, manufacturing, inventory levels, distribution of input products and services,

production and delivery of services.

How to supply chain management systems in the KFC company plan the coordinate,

productivity in their company, and how logistics processes by the suppliers? The answer is

the Supply Chain Management (SCM) systems will computerize the flow of information

between members of the supply chain so that they can make better choices about when and

how much to purchase, produce or ship. Supply Chain Management Software includes

software for the planning of supply chains and for the execution of supply chains.

Connectivity of global supply chains by providing organizations in various countries

is to exchange supply chain knowledge. Internet technology promotes the opportunity to

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management. Improved contact between supply chain participants often encourages

successful consumer reaction and moves towards a model powered by demand.

There are some problems that the organization has to present, and business

applications take advantage of emerging technology. It is tough to accomplish business

applications. They need extensive organizational reform, major new investments in

technology, and careful consideration of how organizational efficiency can be enhanced by

these systems. Enterprise systems, using online services and a customer architecture, are now

more adaptable, web-enabled and allowed access with other systems (SOA). In order to

analyse the lots of data they produce; business applications integrate data analysis

capabilities.

2.0 BACKGROUND OF KFC COMPANY

The name of company that our group is KFC PASIR MAS (KFC). It is located at KFC

Pasir Mas, Jalan Tengku Ahmad, 17000 Pasir Mas. A marketed chicken supermarket chain

operator, KFC Holdings (Malaysia) Bhd., (KFC Holdings). In Malaysia, KFC Holding

operates about 500 KFC franchises across the country.

The first KFC restaurant in Malaysia was opened in 1973 by QSR BRANDS. After its

growth, QSR BRANDS has become the largest restaurant chain operator. Yum! Brands have

been given the right to develop and operate KFC restaurants in Malaysia, Singapore,

Cambodia and Brunei, as well as Pizza Hut restaurants in Malaysia and Singapore. QSR

BRANDS is really the only one. Malaysia and Singapore are the target market operations by

the QSR BRANDS. KFC forms the largest part of our corporation and the major driver of our

growth. Now, QSR BRANDS operates more than 1,270 KFC and Pizza Hut restaurants that

serve approximately 25.6 million customers a month. Malaysia ranks as one of the biggest

KFCs and Pizza Hut stores among the Yum! Brands Global Franchise Network. QSR

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BRANDS' position in the country has made their restaurants the "Preferred Brand" for

partnership with Malaysian corporations as the leading restaurant chain operator and an

iconic brand among customers. Customer loyalty has been further verified through major

awards such as the Putra Brand Awards, Malaysia's Best Brands and Yum! Franchisee of the

Year.

MAJOR SERVICE

Quality control begins with the supply of all raw resources. The annual supplier audit

shall be carried out by an international third-party auditing company selected by YUM. The

audits are conducted by a team of food technologists from the KFC Quality Assurance

Department. Its functions are to ensure food safety, quality systems, packaging facilities,

distribution and transport.

KFC products are cooked well above temperature and are required by the World

Health Organization (WHO) to ensure that the food served is healthy and fresh in accordance

with strict temperature and shelf-life regulations. Product handling of KFC items is a very

stringent policy in order to address the risk of cross-contamination between raw and capable

goods.

ORGANIZATION CHART

An authoritative overview is a graph that externally detects the internal structure of an

organization by defining the positions, responsibilities, and relationships within the same

substance between groups. In the other hand, organizational diagrams are related to as

'organization graphs' or 'association outlines.' KFC have five accomplices and they oversee,

contract, and execute the activities of the administrations. The organization chart of KFC is

including the General Manager, Assistant General Manager, Unit Manager, Assistant Unit

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Manager and Shift Manager. In addition, all the Team Members of Unit Manager additionally

has gathering to help company KFC.

KFC Organization Chart

3.0 METHODOLOGY

The research was a form of documentary study. Data from secondary sources such as

books, academic papers, journals, internet, etc. have been collected. Together with the SWOT

research, the study adopted a critical evaluation approach to depict the strengths and

constraints of KFC's organizational strategies and management. Data was obtained directly

from the official websites of KFC.

4.0 BUSSINESS SUPPLY CHAIN MANAGEMENT SYSTEM

Supply Chain is a network of facilities which involve flowing content from suppliers

and suppliers at all levels, processing materials into semi-finished and finished goods and

delivering products at all levels to consumers and customers on their 'downstream.'

Depending on the case, major product elements, different sources, regional operations as well

as upstream and downstream activities can be found within the supply chain. It is necessary

to expand the whole chain beyond the immediate suppliers and consumers.

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 Upstream and Downstream Supply Chain

(Title: KFC supply chain, 2011)

KFC has a straightforward supply chain because of its comparatively limited activities

in the supply chain, which is why the rest of the operations are carried out by the company

itself. The supply chain process of the KFC can be summarised as the following three-stage

process:

Step 1: Raw material has been purchased from separate vendors and stored in two storage

facilities that rely on their characteristics for the usual stockpiling and cold storage.

Step 2: All product preparation is done at the branch except for the chicken and sold to

customers at the branch itself or delivered at the desired locations.

Step 3: Usually, transport supplies to each branch by using vehicles and drivers of

the business on demand of a branch manager three days a week.

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 KFC's Supply Chain Process

SUPPLIER OF KFC PASIR MAS

KFC has developed its own input criteria that enable suppliers to conform with

rigorous working environment standards, environmental effects, corporate ethics and most

recently human rights standards. KFC's assessment framework includes five fields of

efficiency, technical, financial, consistency and communication. The KFC supplier has been

evaluating and assessing every three to six months; at the completion of the composite

ranking, the procedure department and the buying department were evaluated, and the

supplier's amount calculated over the next period.

CHICKEN

Chicken is supplied by Ayamas Food Corporation Bhd. One of the main poultry production

plans in the nation is the Ayamas plant in Port Klang, Malaysia. A large fleet of refrigerated

trucks manages delivery internally. This direct shipping between plants and consumers

ensures product freshness and consistent distribution.

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VEGETABLES

Vegetables using in the KFC store are including tomatoes, cabbage, salad, and cucumber

which supplied by QSR Brands.

OIL

The oil used to fry the chickens and potatoes of KFC is carefully examined for the origin,

safety, and influence of frying. KFC commits that they use non-hydrogenated palm oil that

contains insignificant amount of trans fat, and it is 100% cholesterol free.

PACKING MATERIAL

This is purchased from local party namely Malex Paper Products Sdn Bhd. Due to frequent

redesigning of boxes and deals offered by KFC, the inventory of these is kept at a

minimum.

SAUCES

Region Food Industries Sdn Bhd (RFI) supplies Life tomato ketchup and Life chilli sauce to

KFC. RFI transforms high-quality raw ingredients into high quality sauces. Its products are

also sold in most large supermarkets, hypermarkets and supplies shops.

OTHER MATERIAL

Other materials of KFC were imported from abroad to Malaysia. For example, French fries

and corn were imported directly from America.

KFC’S WAREHOUSE

It is also an essential aspect of the supply chain system, which is preserving freshness

and nutritious value for food items using cold storage systems. For various items comprising

of dry storage and cold storage, KFC incorporates separate storage. Dry storage for other

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items includes cleaning products, disposable plates, spoons, towels, recipes and others. Dry

storage. The items are kept at room temperature. Storage of cold food includes vegetable

items, cold drinks, and chicken at temperature (-1oC to -4oC).

INVENTORY MANAGEMENT

KFC's inventory management system is the FIFO method, meaning "first in first out"

where the products which first join the branch are first used. The inventory consists of a

regular, weekly, and monthly inventory of three forms. The daily stock contains fast-moving

items such as drinks, non-vegetables and ice creams. The orders will be made every night

after the restaurant is finished, the necessary sheets will then be filled in to position the order,

then the items will be shipped from the factory to the branch that orders the merchandise. The

weekly supply includes dry stock products such as cooking appliances and spices. The

requirement sheet is filled while placing order which is placed every week. The monthly

inventory includes the detailed quantity verification of the items present in the store and the

products that were disposed because they have not been eaten on standard time or spoiled.

LOGISTICS MODEL OF KFC

Restaurants report the distribution centre of the division under the KFC supply chain.

It is the responsibility of the distributor's office to determine the region's full demand. The

distribution centre now orders the supplier after review of the entire market. The KFC supply

chain is based on the method DRP. Three output plans and two input files are used in this

framework (B.Kaur, 2010). The Distribution Requirement Planning requires the use of the

preparation, procurement, distribution, inventory file and supply resource file. The store

manager orders all necessary raw materials such as chicken, potatoes, vegetable, oil and other

miscellaneous goods to the distribution centre. It contains dry goods, frozen food and wet

products, including bread and vegetables, which have a very limited shelf life. Dry products

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and frozen items are typically ordering regularly while wet products, depending on demand,

are purchased 2 to 4 days a week.

KFC does two planning styles, strategic planning and operational planning. Strategic

planning improves the market value and Operational Planning involves introduction of a new

product to modify or innovate the consumer product line. The aims of KFC's strategy are to

spreads the company across the UAE, build and increase the quality of its clients, pursue

marketing matching tactics and provide KFC and KFC workers with superior financial

returns. Research is used to prepare the menu. The supply chain management planning

encompasses the whole supply chain management process, which covers the supply and

packing of chicken, spices and packaging products. In addition, the supply chain management

planning priorities include increasing the outsourcing level, increasing globalism, increasing

supply, increasing pricing demand and growing consumer efficiency.

CHALLENGES THAT KFC COMPANY APPLICATIONS POSE AND HOW THEY

TAKE ADVANTAGE OF NEW TECHNOLOGIES

Through the selective use of their resources, KFC achieves more competitiveness. In

today's corporate life, an organisation's willingness to bring value to the experience of its

consumers is a vital factor in selecting the client for its enterprise over another. In order to

maintain this strategic edge, KFC should introduce creative ways, such as consumer benefits.

This would increase consumer satisfaction.

A lack of appealing promotion is one of the problems that confront them.

Furthermore, the costs and discounts of McDonald have been more limited relative to KFC.

For example, the McDonald's application that can be downloaded from the Google Play and

App Store is still full of fantastic sales and offers. Their workers will bring their clients to the

applications daily. While KFC have their own app, its employees have been pushing

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applications and deals less than McDonald's. With respect to current KFC goods, instead of

adapting it to consumer demand, they retain its pricing. It is time for KFC to make certain

improvements to resolve the obstacles. Currently, KFC also partnering with Maxis Hotlink to

offer Maxis prepaid users who hold KFC promotional SMS could get special meal when dine

in KFC. It was a good way to promote their meals.

Next, KFC has poor service from staff. The level of service has been largely

recognised as a significant element in customer loyalty and the intention to buy such goods or

services. The consumers also condemn inefficient food processing and working roles while

the food quality is definitely not. KFC should have a strong allocation of capital to boost this

problem. Rather than collecting all orders and cooking food, KFC can distribute stuff to

spread the workload so it will shorten the customer's queuing period. Now, TNG Digital Sdn

Bhd confirmed a strategic alliance with KFC Malaysia, Malaysia's largest fast serve food

chain. With Touch 'n Go eWallet, customers can now make QR payments through all KFC

restaurants across the country. The digital payment at KFC restaurants with Touch 'n Go

eWallet also increases customer service quality.

5.0 CONCLUSION

In conclusion, this study finds that in terms of organizational decision areas and

strategy, the global organization is becoming more dynamic and competitive. It also

concludes that the strategic advantage is the control of processes and policy. All fields and

methods of decision making are different from others. Thus, for benefits, the right choice of

decision areas and their effective strategy are highly significant. It is recognized from this

study that KFC's biggest strength is its brand value built on the legacy of the colonel and its

original chicken recipe product design and quality that makes the market leadership.

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 However, despite the challenges, it is recommended that more attention should be

paid to KFC's supply chain and cost effectiveness. The study eventually suggests the

following points after evaluating all the problems: In terms of food safety and quality, KFC

should not have any association with any unethical entity to prevent any negative criticism.

By way of overall quality control, KFC should implement minor changes. In addition, eco-

friendly packaging materials can be used. As an intellectual property, KFC would be able to

take further advantage of its original recipe product. KFC must place stronger emphasis on

CSR. It will be able to increase the picture of the band that will achieve the gain and

competitive advantage of the sails.

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6.0 REFERENCES

Shah Mujahid Uddin. (2020, April 16). OPERATIONAL STRATEGIES AND MANAGEMENT

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THE TOUCH ‘N GO EWALLET IS NOW ENABLED ACROSS ALL KFC RESTAURANTS

NATIONWIDE. (2019). QSR BRANDS. http://qsrbrands.com/the-touch-n-go-ewallet-is-now-

enabled-across-all-kfc-restaurants-nationwide/

Kentucky Fried Chicken Holdings Malaysia Berhad Marketing Essay.

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