How KFC could have avoided chicken shortage chaos

20 February, 2017
How KFC could have avoided chicken shortage chaos

Operational issues, stemming from a new delivery partner, have seen KFC restaurants fall ‘fowl’ of a chicken shortage. The crisis has forced franchisees to operate limited menus, shorter opening hours or close their doors altogether.

The 600 restaurants affected across the UK will be counting the cost of closure, with the firm admitting it’s ‘too early’ to say how long it will take to restore the situation. The almost farcical situation will leave many asking, ‘how does a chicken restaurant run out of chicken’?

Last year the chain made the decision to hand its logistics operation to DHL, at the time saying that it was ‘rethinking’ its processes and ‘placing distribution and logistics at the heart of [their] new supply chain strategy’. On current evidence things do not seem to be going to plan…

While KFC are trying to make light of their situation on Twitter… “The chicken crossed the road, just not to our restaurants”, it is causing chaos for their thousands of employees who are either being ‘encouraged’ to take holiday or who will be paid for the average hours they had worked each day over the past 12 weeks.

Running low on stock is the bête noire of any retailer, but when your stock in trade is chicken, running out of feathered friends is simply unthinkable.  The question is; how could KFC have avoided their chicken shortage chaos? The answer, with the benefit of hindsight, is like this.

Accurate demand planning

Inaccurate demand planning costs businesses time, in resolving avoidable problems, and also a lot of money. Either inaccurate demand planning leads to the overproduction of products, beyond what the market will absorb, meaning there are vast amounts of waste, or, like in the case of KFC, you will run short of products, leaving your customers disappointed and your brand reputation in tatters.

“Getting fresh chicken out to 900 restaurants across the country is pretty complex.”

While this might be the case, it is not impossible. Every fast food chain has many moving parts to take into consideration including managing their farms, delivery schedules, cooking (and preparation) and of course their sale statistics. Managing all of these elements does make operations complex.

However, it doesn’t need to be so difficult… Planning and scheduling for demand can be easier and more accurate if you take these moving pieces and consolidate them into one place, giving you complete visibility across your whole supply chain.

The ability to see, process and analyse your data in real time is the key to maintaining an efficient supply chain, as you are able to predict and prepare for challenges before they arise! By having this level of visibility, KFC would have been able to address their delivery problems before they had to close stores, keeping their customers satisfied and their bottom line intact.

Optimised delivery scheduling

The goal for KFC was to ‘deliver a new level of service to [their] restaurants and franchise partners, improve the quality of service to [their] customers and to reduce environmental impact’ yet, due to delivery failings, they haven’t been able to offer a service at all. This is something that again through visibility of data, and optimised scheduling could have been avoided.

Picture this scenario… KFC is able to see in real time that some of their delivery fleet are delayed, but they are also able to see trucks that aren’t in use, or are ahead of schedule and can adapt the routes for those vehicles to cover those who are delayed. That also sounds complex, but all of this can be automated. By using effective resource management software, you are able to efficiently match the best truck/employee to a work order based on availability, proximity to service location and if applicable, the required skills. And it can be available anywhere, on any device.

By enhancing real-time communication and collaboration between all areas of the supply chain, you have more visibility and as previously mentioned, visibility is the key to a successful and efficient supply chain.

It’s all about data

If you hadn’t already guessed, it’s all about data. How can you plan, predict and prepare for any potential problems if you can’t see them coming? How can you ensure that the same issues don’t arise again if you can’t accurately see why they happened in the first place?

KFC could have avoided this chaos by having better access to their real time data, across their whole supply chain, where the results are constantly analysed and automated activities are created, for example ‘your deliveries are running behind, please confirm rerouting action’.

The applications of big data in the food industry are so extensive! From production to customer service, absolutely every step of your supply chain process can be optimised.  Examples include:

On-time delivery

This can include collecting data from various sources like road traffic, weather, temperature, route etc. which can ensure you’re delivering your customers quality.

Operational efficiency

Analysing the impact of market trends and changing buyer preferences, predicting future buying behaviour, alongside managing the effects that different environmental factors have on food quality, enabling you to create the ‘perfect food quality environment’.

Customer service

There are so many different customer touchpoints including apps, website, social media, and more! By using the data derived from these touchpoints, you can leverage them as meaningful insights. For example, McDonald's, has initiated a data-driven culture by leveraging trend-analytics to better understand the situation at each individual restaurant. 

How to ensure you’re not the next KFC

Download our free eBooks on demand planningcosting, and recall management and discover how to optimise your supply chain by taking full advantage of data analytics capabilities.

Categories: Food, D365

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