Running out of chicken

Participants from Group 12

 M IMRAN KHAN (20003481)

 NAVEED ULLAH (20008127)
 ALI ASGHAR (20014744)
 GIWA (19025805)
JONATHAN (19022196)
Preface of discussion
Introduction of KFC

1. What happened in KFC supply chain

2. Root cause of the Problem
3. Possible proactive approach
4. Lesson for KFC and other companies
5. Research and Conclusion
Introduction
 KFC (Kentucky fried chicken) is well-known American fast
food restaurant chain.

 World’s second largest restaurant chain after McDonald’s.

 22,621 branches in 150 countries.

 KFC offers mainly chicken products like chicken fillet

sandwiches, etc,.
Problem & Background
 In October 2017, KFC decided to switch suppliers from
Bidvest to DHL
 DHL opened new distribution center at Rugby, UK.
 On 14 February 2018, the supply chain disrupted
 Chicken wasn’t shipped to many stores in UK(Operational
issues)
 18 February, Approx. 650 out of 900 restaurant were
closed,
 Many stores cut their working hours, (limited menu’s)
 Supply chain Problem persisted for 3 weeks
Root Causes of the Supply chain Disruption

DHL
 Lack of understanding of supply chain capabilities
 Centralised distribution model
 Operational issues
Shortage of trained employees
Problems with IT system
KFC
 Poor Management
Lack of understanding of supply chain
capabilities(DHL)
 Supply chain Responsiveness
 Efficiency
Centralized Distribution Model (DHL)
 Operations limited to central location
 Fewer number of facilities
Poor Management (KFC)
Disaster Recovery Plan
 The management approved document that defines
the resources, actions, tasks and data required to
manage the technology recovery effort. This is a
component of the Business Continuity Management
Program (DRII, 2008).

 Strategies to minimize the effect

 To establish alternative means of operation in advance.
 provide for smooth and rapid restoration of service
Possible Proactive Approach
 More inventories in strategic location.

 Relationship management and re-designing of the supply

chain network.

 Planning and Management.

 Supply Chain Experts.

Lesson for KFC and other Companies

 Risk Management

 Unforeseen Delays

 Fast-Changing Markets

 Quality Customer Service

 Research and conclusion

Design and Modelling/testing of the supply chain

network

Hiring of potential supply chain staff

Supply chain framework factors

Research and conclusion
 Negotiations for low logistics cost with Bidvest company
 Pull & Push strategy

Safely stock before cutover

Evaluation and comparison of facilities of Bidvest and
DHL
Revised agreement based on performance
Gradual phase out strategy
 Research and Conclusion
 Desired Response time vs number of facilities close to customers

•Responsiveness
•Low logistics cost
•Customer surplus

13 12/7/20
References
 http://ominthenews.com//supply-chain-failure-kfcs-chicken-shortage
 https://www.wired.co.uk/article/kfc-chicken-crisis-shortage-supply-chain-logi
stics-experts

 https://www.vskills.in/certification/blog/designing-supply-chain-distribution-net
work/

https://yourstory.com/mystory/7-main-challenges-in-supply-chain-
management-and-h-rdq2oy6mh9