Page 6 - Logistics News April 2018
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Opinion
Why did the chicken
cross the road?
By Rick de Klerk
For Kentucky Fried Chicken (KFC) in the UK, at least, this answer was, “Because we
thought it’d save us a ton of money”.
IN FEBRUARY, KFC switched over 3PL any issues would compound over time.
providers, going from a multi-warehouse And, as it turns out, the room for error was
approach to a single location for the exceedingly low – the scandal has revealed
storage and delivery of its chicken. Due to just how much fl ex KFC’s new system had
complications in the switch, KFC’s supply for error. The failure to properly integrate
plummeted; within a week, two thirds of the its ordering process meant a breakdown in
franchises were out of chicken and unable communication. According to some reports,
to serve their customers. While it has hastily full loads of chicken spoilt in trucks as drivers
switched at least part of its business back, sat idling, waiting for delivery instructions that
the drag created by this error has been never arrived.
substantial. As of April, it is still experiencing The other reason was that KFC failed
supply issues with specifi c items, such as to match its want of effi ciency with the
gravy. unique qualities of food distribution. I’ve
KFC’s dilemma is of interest for a number of written previously how diff erent product
reasons. For one, it is instructive in its scope; classes require diff erent solutions; during
with constant tales of large corporations the West Africa Ebola crisis, for example, the
demonstrating keen supply chain acumen delivery of critical vaccines was hindered by
with eff ortless ease, it is comforting to know pharmaceutical best practice, which focuses
that logistics actually is hard to get right and on safe transport of medication in controlled
even the biggest companies sometimes hit a conditions that minimise contamination and
pothole in implementation. product loss. It was not expedient, which is
Experts and experienced supply chain what the crisis required, but that was due to
journalists have proposed several reasons as extraordinary circumstances.
to why KFC failed in this particular instance, Kevin O’Marah from Forbes said it best in
but I found two to be the most likely. The fi rst his own reporting on the story: “Logistics is
is integration: according to technology analyst not a cost centre”. KFC saw transportation
Chris Green, it was likely that KFC’s ordering and distribution as an operating expense that
system was not properly converted over, needed to be trimmed down. More than 250
partly thanks to the pace of implementation jobs were made redundant as a result, but
(roughly four months). “If you were one of with none of the benefi t. The UK division of
KFC’s 750 franchisees, you could order your KFC, which makes up around 3.5 percent of
replacement chicken and other supplies and the company’s global total and pulls in
usually within about 24 hours, a lorry from $2.1 million a day, lost two thirds of that daily.
Bidvest would appear outside your store with Ensuring that a company can meet the
what you needed. The stores were used to demands of your business with real-world
that kind of just-in-time ordering, and that’s examples of its implementation and provide
what caught them out,” he says. adequate time for proper integration and
Delivering food from a single warehouse communication of the changes means your
is not impossible, but combined with KFC’s logistics will deliver triumphant crows, not wet
size and its franchises’ typical order process, squawks. •
To add comment, email rick.de.klerk@opsi.co.za
14 April 2018 | Logistics News