Operations Management in KFC Australia

This article discusses the components of operations management in KFC Australia, including procurement, product and service, and customer service. It also covers decision making in operations and the role of operations management in strategic management.

Running head: OPERATIONS MANAGEMENT
Name: Akhilesh Sagar
Subject: Operations Management
Assessment 1

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Introduction
In any business organisation operations management deals with the functions by which
the company runs the business on a daily basis. Creating efficiency among the employees to
improve the process of daily operations is the primary role of the operations management
department. This is essential as the people working in the organisation who perform the daily
tasks should be monitored and managed in order to make sure that their efforts are providing the
organisation a way to achieve the objectives.Operations management is responsible for using the
resources that are available at the disposal of the company and generate products and services.
The approach attempts to balance the costs with revenue to achieve the highest net operating
profit of the company.Supply chain and logistic play an important role in the daily operations of
the business as inventory of the business will ensure the process of output (Jacobs et al. 2013).
Inventory management through supply chain is an important function of the operations
management, which is achieved with the help of analysis of the local and international trends,
requirements of the customers and the available resources for production.The internal resources
of the organisation directly impact the quality of the product and services as well as the process
by which the company can improve the operations of the business. Operations management can
be described as the portion where business process, finance and technology meet (Jacobs et al.
2013).
In order to undertake the analysis of this assignment the organisation that has been taken
to study is KFC Australia.
Overview of the company

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Kentucky fried chicken or KFC is an American multinational fast food chain of
restaurants which has gained popularity in the food and beverage industry due to the quality,
availability and the strategic management decisions that is followed by the company. The
organisation holds a significant position in the market and has stores in almost 20,000 locations
internationally the company operates in approximately 123 countries (Kfc.com.au 2018). “Yum!
Brands” is the parent organisation. Established in 1930, the company has come a long way in
the business operations keeping up with the quality of the product and meeting the requirements
of the consumers (Kfc.com.au 2018).
Components of operations management in KFC
Operations management plays a very important role in a business model like KFC, in
order to ensure an efficient performance the company employs and integrates the operation
process. With the help of constant management control and co-ordination operations the
company drives to achieve the objectives. Product evaluation, product distribution, advertising
and promotion, sales and service and product development are some of the activities of the
operations management in the company (Davis et al. 2018). The objective of the operations
management of the company is to improve balanced food choices for the organisation is
committed to reducing sodium and sugar as well as trans-saturated fats to less than 0.5% without
compromising on taste or quality of the products (Brown and Bessant 2013).
The company is driven by the quality of the products, timeliness of the commitment and
requirements of the customers and in order to deliver all of this operations management plays an
important role the components of operations management in the organisation are as follows:
Procurement process

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To deal with the changing and diverse menu that the company offers the raw materials
are essential part of the operations process. The raw materials that the company uses can be
divided in to two sections edible raw materials and non-edible raw materials. Furthermore, this
can be divided into simpler sections in edible raw material section the company has dry items
and wet items. The company has its own warehouse in the region of operation, in order to keep
the materials fresh. In the warehouse the perishable items are kept in order to ensure that there is
continuous supplies of resources for the branch to operate. These include the burger bun,
chicken, spice mix, vegetables, oil among others (Chen et al. 2015).
The non-perishable material that is used is mostly for packing purposes. The materials are
gathered from the vendors who are third parties and then these are stocked in the warehouse.
From the warehouse these materials are sent to the branches as per the order that has been placed
by the manager based on the forecast of the demand of the items. This process is ideally done
thrice a week and the transportation and the management is looked after by the employees of
KFC. The warehouses of KFC are placed according to the region of operation in Australia so that
the processes of delivery to the branches are quick in order to retain the freshness and the quality
of the product (Mok et al. 2013).The company follows a DRP approach which enables them to
control the inventory fluctuations and also determine the time-phased inventory necessities.
Some of the prerequisites of being the supplier of the core ingredient of the menu “chicken” are
that the supplier has to be a member of the Australian Chicken Meat Federation and has to
diligently obey the Model Code of Practice for the Welfare of Animals, Domestic
Poultry(Csr.kfc.com.au 2018). The company ensures that 85 percent of the raw materials that are
used in the operations of the output of the products and services are sourced from Australia.
Inghams, Steggles and Golden Farms are some of the key suppliers in the region. 97 percent of

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the chicken that is used by the restaurants are non-frozen and are fresh which helps in retaining
the quality of the product (Csr.kfc.com.au 2018).
The flour, burger buns and tortillas is also supplied by local vendors such as George
Weston Foods, Manildra and Allied Mills (Csr.kfc.com.au 2018). The potato that is used is the
process is supplied from Tasmania and Victoria. On the other hand, lettuce and tomatoes are
sourced from the east and west coasts of the country. The organisation states that every week the
company uses around 32 tonnes of lettuce, 16 tonnes of tomatoes, 70 tonnes of fresh burger buns
and 16 tonnes of fresh dinner rolls in the restaurants throughout Australia (Csr.kfc.com.au 2018).
Product and service
There are a number of employees associated with one branch of KFC restaurant. Every
branch has a manager and there are people who are responsible for taking the orders making the
orders, serving the orders and dealing with the issues of the customers. The operation of a branch
in Australia is based on the menu that is being served in the restaurant. The manager of the
branch is responsible for coordinating with the distribution and the warehouse department. The
finance and the management of each branch is also dealt by the manager (Brandenburg et al.
2014).
Customer service
The role of operations management in the company in the customer service sector is to
enhance the process and develop the operations as is possible with the given resources.
Maintaining the quality of the product the service that is offered has to be consistently good in
order to achieve the objective of the business. The operations management also analyses the
demand trend of the products and innovates the menu accordingly. The company invests in

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training the employees to improve their skills and speed. The operations management also
develops innovative ideas every year 40 on average.
The above stated components are some of the most important aspects of the business strategic
management decisions and policies of the company are built on the basis of these operations.
Decision making in operations
The DRP (Distribution resource planning)processes have some of the following aspects: the
main demand planning, inventory files, supply the resource files; procurement plans, distribution
plans (Hoch and Dulebohn 2013).
Planning: in order to meet the targets and achieve the objects of the company the management
has to look out for scope of development and changes, this requires planning. In KFC operations
planning play an important role in strategically locating a place to build a restaurant, apart from
that planning of the course of the operation for a week in case there is pressure and excessive
demand. The company uses Total quality management approaches in the daily operations of the
business to ensure the best quality and best service. Following the principle of continual
improvement recommended by Schonberger planning is essential in every step of operations
from distribution to procurement to customer service among others. Another principle of
operation management is focus, it is one of the major aspects in the planning process, and the
company has to align the objectives along with the operations process so that the effort is
concentrated and organized in a streamline. KFC management ensures that every operational
function of the organisation is structured and is executedefficiently (Schonberger and Brown
2017).

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Scheduling: The process of distribution, procurement and the timeliness of the service to the
customers are all based on the way the process is scheduled. There should be provisions made by
the company in case there is an overflow of work to maintain the timeliness of the process.
Distribution of the raw material is something that is scheduled by the branch managers according
to the requirement of branch. The management of the company will ensure that there is a
continuous flow of resources this brings to the principle of organisation of the resources which
will help in scheduling the operations in an effective manner (Hoch and Dulebohn 2013).
Inventory management:The inventories of the company are discussed above.The restaurant
follows a First In First Out approach to manage the resources and the inventories as the company
deals with the perishable items. This is the part of the Distribution resource planning approach
that the company implements in order to ensure the process of Distribution and procurement are
effectively implemented. The principles that are followed in this process are forecasts of the
demand, the restaurant reports to branch distribution center on the basis of the demand forecasts,
the distribution center procure the items from various suppliers in Australia that are mentioned
above (Hoch and Dulebohn 2013).
The role of operations management in the strategic management
Strategic management is the process by which a business organisation forms the policies
and the decisions of the business. Some of the basic functions of strategic management of a
business is to formulate the goals and objectives of the organisation based on the business as well
as the operations. This further helps in formulating the policies and decisions of the business. it is
the way in which an organization manages the business organisation as well as the daily
operations of the business. The responsibility of operations management is to effectively perform

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in order to reach the objectives that are created by the strategic management process. Strategic
management ensures that every decision that the management takes is based on a rational
reasoning and is backed up by sufficient data. Improvement of the efficiency, development of the
effectiveness and increasing the flexibility of the operations are the major objective of the
operations management of KFC.
The foundation of strategic management can be described in the following functions:
 It helps in defining the business by documenting the vision and mission statements as
well as states the values and principles
 The definition of the organisation is followed by the measurable objectives which is
formulated by the values and principles of the company
 Organizing a plan in order to achieve the objectives with the help of marketing,
administrative, financial as well as operational strategies
 Implementation of the strategies
 Evaluation of the impact of the strategies in achieving the objectives
This indicates the role of operations management in strategic management, KFC is a
multinational organisation that has set target market to meet. The company uses strategies like
differentiation in order to achieve an advantage over the competitors any of the strategy the
company formulates have to be back up by a strong operational function base. (Hoch and
Dulebohn 2013).
Conclusion
It can be concluded from the above discussion that KFC Australia is very well structured
in terms of its supply chain which includes distribution, procurement customer service. The

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company ensures that most of the products that are used as raw materials are sourced from
Australia. The organisation is also a large contributor towards employment in the area of location
in terms of suppliers, restaurant workers, branch managers, warehouse keepers etc. The
operations management of the company ensures, quality, timeliness and loyalty among the
customers.

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