Archive: March, 2018

2. The chicken crossed the road

On 18 Febuary KFC tweeted: “The chicken crossed the road, just not to our restaurants. We’ve brought a new delivery partner on-board but they’ve had a couple of teething problems – getting chicken out to 900 restaurants across the country is pretty complex.” In the subsequent days, more than half of KFC’s outlets in UK were closed.

Without wanting to pick over the bones of this crisis, I wanted to use this as a case study as part of my series of blogs on procurement technology and data. What went wrong at KFC and can anything be learned?

KFC’s tweet led the media to point a finger at the reliance on a single distribution centre and the logistics provider, however, this appears to be an over-simplification and ignores the complexity of modern supply chains.

Using a single distribution centre in the “Golden Rectangle” between Milton Keynes and Rugby on the M1/M6 is a well-established and proven means of getting products into a network. A lorry that’s loaded up by 7pm in the evening will be able to deliver to anywhere in UK by the morning.

Bidvest, a specialist in food delivery and the incumbent, lost a tender to DHL, the world’s largest logistic supplier.

There are four key components to a supply chain: the processes, the infrastructure like warehousing and transport, the information systems that run it, and the people involved.

Under KFC’s new approach, DHL provided the infrastructure and QSL the software for the information systems. By all accounts, the new supply chain solution came together for the first time on Tuesday 13th February (5 days before the tweet).

Like any complex machine, such as a car, you can test the engine, brakes, air conditioning and they all work. Bring them all together and suddenly one element isn’t working properly with another element and the whole machine stops working.

It is too early to say what exactly went wrong in the case of KFC. Supply Management proposed some generic areas to consider. In time, we will be able to scrutinise the tendering process, how collaboration was established and handover carried out.

Perhaps the most important lesson for now is one about the reality of modern business. Individual businesses are dependent on their suppliers in a way that some find difficult to comprehend. Competition takes place between entire supply chains, each comprising a range of specialist business collaborating to deliver the final product.

Hopefully, this has helped you digest the KFC’s supply chain crisis and brings an end to all the fowl jokes.