LSCM5027 Logistics and Supply Chain Management Assignment

LOGISTICS AND SUPPLY CHAIN
MANAGEMENT

REPORT: 1
Contents
Introduction...........................................................................................................................................2
Introduction of the company (KFC).......................................................................................................2
Evaluate the significance of KFC’s Logistics variables in avoiding such 3delays in the future and
achieving customer satisfaction............................................................................................................3
Analyse how innovations in e-business and e-commerce, can help KFC avoid such delays in the
future, within its supply chain management.........................................................................................5
KFC aims to improve its reliability within its supply chain and logistics. Suggest and analyse best
practices, which can help KFC to achieve its aim...................................................................................8
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11

REPORT: 2
Introduction
The report brings out the supply chain and logistics management of KFC. The report suggests
innovation in e-commerce and e-business that can help the KFC to avoid delays in future and
also in the supply chain management. The report provides the solution to the problem, which
is being brought out in the case study. The evaluation of KFC`s logistics variables that can
avoid delays in future and achieve customer satisfaction (Wang, and Luo, 2016). The
organisation has strived to improve the reliability of supply chain management. The company
uses certain systems and models to operate a successful supply chain such as DRP system
and star system that includes quality, technical, financial, and communication and reliability.
After the problem faced by KFC in the supply chain management, DHL undertook the supply
chain system of UK and keep the chicken destined for the use. DHL has provided an
infrastructure and the other party included QSL that supplied the software for the information
system (Qiang, Huang, Ke, and Yang, 2014).
Introduction of the company (KFC)
Harland Sanders founded KFC when it started his first restaurant in 1930. Soon after
expanding, it began to actively participate in franchising business after 1952. The company
has achieved to have more than 600 franchised stores including Canada, England, and USA
in 1964 and it had 6000 KFC restaurants worldwide. Kentucky fried chicken is shortly known
as KFC. It is an famous American fast food chain that specialises in serving fried chicken
which is further headquartered in Kentucky. It is second largest restaurant chain of fast food
after and other than McDonalds. KFC has an renowned brand and operating segment that
raised the concept of Yum. Since 1997, the company spun off from the PepsiCo. The
company primarily sells wraps, sandwiches, salad, and chicken pieces. The focus lies in fried
chicken and it also offers grilled and roasted chicken product such as hamburgers, kebabs,
and other pork products.

REPORT: 3
Evaluate the significance of KFC’s Logistics variables in
avoiding such
delays in the future and achieving customer
satisfaction.
Consumers often wants to know that how supply chain works. There is no doubt that it gets
fresh chicken from the poultry farms to outlets when it is required. No workforce among the
KFC drivers and KFC trucks receive orders from the KFC stores. Current modern supply
chains are highly complex and involve a number of organisation to make the system
successful that contributes to different experts. The reason behind how chicken could not
reach to KFC outlets was the completely new system even after including number of partners.
It is important to know that employing new software and technology can lead to teething
issues.
In order to improve the customer satisfaction, the store has to consider four important
components while strategizing the supply chain. The components are the infrastructure
(warehousing and transportation), adequate information system especially among the people
that are involved in chain operations. By coordinating all the activities and the variables of
logistics system efficiently to execute the supply chain management, the company manage its
operation by following specific system such as DRP system that includes three input files and
output plans. The first required planning operates when managers of the outlets try to fulfil
the use of term-type orders that are filled and convert raw material into frozen goods, wet
goods, and dry goods. The inventory file manages another variable such as raw material,
every time before starting the day, the staff line up all provisions of inventory of raw material
and its registration.

REPORT: 4
(Source: Management and development centre, 2018)
To serve the customers very well, the company has to plan its supply recourse, transmission,
supply response time, processing order, and the effective distribution centres. The
procurement plan deals while receiving order for processing such as shipment data, existing
inventory, and abnormal fluctuations. When it comes to evaluate the logistics of KFC, at first
it provides strong support to the normal operation of the organisation that leads to rapid
expansion. Various restaurants based on accurate demand planning through procurement
strategy that lead to reduction in the organisation`s inventory costs. The distribution centre in
the logistics system in the central location and the function of information system can be
appropriately reflected. Demand forecasting and distribution planning of quantitative and
standardised management can lead to high level of enterprise management. Moreover, the
demand estimation decisions are adopted on the basis of purchase cycle, safety stock, past
data, seasonal patterns, forecasting, and safety stock. Here is the glimpse of how the company
operates with DRP system. The restaurant reports to the branch distribution centre that collect
order demand, after the order is placed to the supplier, he delivers to the distribution centre
under the line delivery system. The mode of operation tend to follow the logistics supply to
follow DRP.

REPORT: 5
Analyse how innovations in e-business and e-
commerce, can help KFC avoid such delays in the
future, within its supply chain management
While indulging into global business, the company shifted to international competitive
through existing firms and new entrants (Zhu, Anagondahalli, and Zhang, 2017). The
transition to manage supply chain through great coordination of entire distribution channel,
relational exchanges, and alliances. Employing B2B could improve the performance through
business. The company can employ Structural equation Modelling (SEM) that can be used to
assess measurement and structural model. After following the B2B system, the business seeks
focus on business performances. The supply chain management system should be integrated
and should be enabled with internet. To recover from the customers, KFC revolutionises and
integrated UK`s foodservice supply chain with QSL and DHL. It employed three-way
partnership way to focus innovation, quality, and reliability in the distribution market. DHL
have made the rulebook and set benchmark to deliver the fresh product to KFC (Wilding,
2018). Moreover, the company should engage star system into the organisation to support the
operations. The elements are Quality, Technical, Financial, communication, and reliability.
Key area to focus have reduced the logistics-related emissions to zero over the life of contract
and it optimised the delivery scheduling so that it can fasten the turnaround of several orders
and lead to greater integrity of food while transporting and allowing for fresher products.
After collaborating with the KFC in 2011, food logistics QSL brings the expertise in E-
commerce. Moreover, it fastened the services especially to the UK in form of crucial demand
planning ad stock management with the help of IT solutions. The company is reforming its
internal and external processes with the IT experts and on the parallel side, place the
distribution system at the heart of new supply chain strategy. It has assisted to add unique
proposition for KFC and drives specific needs of the business. By using the e-commerce

REPORT: 6
system, a company can improve its supply chain management and logistics operations so that
it can avoid delays in the operational business (Mylonakis, and Evripiotis, 2016).
Uber-isation of trucks
(Source: Space of technologies, 2017)
It is discovered that there are more advanced logistics technologies that can have significant
impact such as Uber-ization system of trucking. In this system, the company can transport its
goods by moving freight long distances through trucks, inexpensively and safely. Now a
days, customers demand visibility and control of inventory through transportation in the
supply chains (Maras, 2015).
Robotization of the Warehouse

REPORT: 7
(Source: Maras, 2015)
The second usage of E-commerce facilities can lead to robotization of existing warehouses.
The concept and usage of E-commerce have revolutionised the shopping and also the way
how purchases are delivered to customers (Supplychain247, 2018). Therefore, there is always
remain a serious bottleneck in the e-commerce chain of logistics such as human stock
pickers. The robot picker has already been implemented in various companies that has
revolutionised warehouse and supply chain operation (McKeown, 2018).
Augmented Reality and Wearables
(Source: Hand, 2018)

REPORT: 8
The third implementation of e-commerce in logistics is the augmented reality such as
wearable digital system that strive to reinvent the cost and time of picking process in the
warehouse. Many warehouses still maintain a paper-based approach of stock picking that can
be slow and error prone. Another augmented reality systems offered by the companies
include Knapp, Ubimax, and SAPthat consists of smart glass display, wearable PC and a
battery pack. With the combination of indoor navigation capabilities, they discern best routes
to the particular items and reduce the travel time by effective path planning (Supplychain247,
2018).
KFC aims to improve its reliability within its supply
chain and logistics. Suggest and analyse best practices,
which can help KFC to achieve its aim
Supply chain management is a broad range of actions that are required to plan, execute, and
control the flow of material and products that starts from procuring the raw material and
production by distributing it to the final customers in a streamlined and effective manner
especially in regards to cost and coordinating the activities. Although the supply chain
management follows a common structure but it is not necessary that each organisation can
successful the use the given model of supply chain. Most of the raw material are procured
from either market or self-owned facilities (Press Release, 2017). While considering the
logistics model, which is based on DRP system, the company should improve each element
of the system that includes input files and output plans. It has to improve its tools for the
demand planning and forecasting, supply resources files, distribution plans, inventory files
and procurement plans. The company have to employ efficient workforce to avoid resource
wasting and timely placing of refrigerator of perishable goods. Managers are appointed to
acknowledge main requirement planning that includes the responsibility of term type filling
of orders and the number of order*volume which is equal to total demand – inventory
(Baryannis, Validi, Dani, and Antoniou, 2018).

REPORT: 9
The company has to maintain inventory file where the provisions of staff and inventory of
raw material with its registration is necessary. This will help to calculate the EOQ (Equal
order quantity), LIFO, FIFO and weighted average with its costing in the single day. The
supply resources file is maintained to check how the supply-side arrival time is affected. The
time depends on the transmission, supplier response of the number of orders, processing
orders and finally the efficiency of distribution centres (Henderson, 2018). It is important to
identify the adequate remedies rather than breaching and braking the terms and conditions
laid down in supply agreement. Apart from losses, it was seen that some of the chicken was
wasted in KFC. An efficient supply chain agreement should ensure that activities lead to
losses can be recovered easily only when supply chain is drafted properly. It should be
already mentioned that which dispute are over and above the direct and indirect loss and cost
(Omer, 2018).

REPORT: 10
Conclusion
After analysing the supply chain and logistics system of the food restaurant named “KFC,” it
can be seen that earlier the company had operated its supply chain with the whole efficiency
but the challenging time given in the case study spoiled the brand image. To improve and
employ e-commerce knowledge, KFC partnered and collaborated with the three partners, one
among them was DHL. The report brings out how and what supply chain system is the
company using and which steps should be rendered to improve the existing and lacking
supply chain. The company is investing a good sum in order to improve supplier
relationships, customer relationships and supply chain. The report also suggests new e-
commerce ideas to improve the operations. DHL helped the company`s UK`s supply chain
system through Intelligent wearables, uber-isation, and operating task automation.

REPORT: 11
References
Baryannis, G., Validi, S., Dani, S. and Antoniou, G., (2018) Supply chain risk management
and artificial intelligence: state of the art and future research directions. International Journal
of Production Research, pp.1-24.
Hand, A. (2018) Intelligent Wearables Guide Industrial Field Workers: The technology
combines head-mounted mobile computing, augmented reality, video, guided work
instructions, access to remote experts and more to guide operators in their tasks. Available
on: https://www.automationworld.com/article/technologies/mobility/intelligent-wearables-
guide-industrial-field-workers [Accessed on 14/11/18]
Henderson, J. (2018) Expert reaction: KFC supply chain crisis could have been avoided.
Available on: https://www.supplychaindigital.com/scm/expert-reaction-kfc-supply-chain-
crisis-could-have-been-avoided [Accessed on 14/11/18]
Management and development centre, (2018) Distribution Requirements Planning DRP.
Available on: http://mdcegypt.com/Pages/Operation%20Management/Production%20&
%20Operation%20Management/Distribution%20Requirements%20Planning/Introduction.asp
[Accessed on 14/11/18]
Maras, E. (2015) The Warehouse as a Competitive Advantage: Automation keeps adding
ways to streamline inventory flow. Available on:
https://www.foodlogistics.com/3pl-4pl/article/12050647/the-warehouse-as-a-competitive-
advantage [Accessed on 14/11/18]
McKeown, H. (2018) What can KFC teach us about supply chain management?. Available
on: https://www.hillyermckeown.co.uk/can-kfc-teach-us-supply-chain-management/
[Accessed on 14/11/18]

REPORT: 12
Mylonakis, J. and Evripiotis, M., (2016) TOWARDS AN ASSESSMENT OF
GLOBALIZATION AND LOCALIZATION OF WESTERN EAST-FOOD CHAINS IN
CHINA: THE CASE OF KFC. European Journal of Business and Innovation Research, 4(3),
pp.17-28.
Omer, S.K., (2018) SWOT analysis: The tool of organizations stability (KFC) as a case
study. Journal of Process Management. New Technologies, 6(4), pp.27-34.
Press Release, (2017) KFC revolutionizes UK foodservice supply chain with DHL and QSL.
Available on: appointmenthttp://www.dhl.com/en/press/releases/releases_2017/all/logistics/
kfc_revolutionizes_uk_foodservice_supply_chain_with_dhl_and_qsl_appointment.html
[Accessed on 14/11/18]
Qiang, Q., Huang, Z., Ke, K. and Yang, Y.X., (2014) Overview of supply chain risk
management and the current issues of closed-loop supply chain in China. International
Journal of Business Continuity and Risk Management, 5(3), pp.236-243.
Space of technologies, (2017) How Can Uber for Trucks Benefit the Trucking & Freight
Industry?. Available on: https://www.spaceotechnologies.com/uber-for-trucks-app-benefits/
[Accessed on 14/11/18]
Supplychain247, (2018) Tech Trends Shaping the Future of Global Logistics. Available on:
https://www.supplychain247.com/article/3_tech_trends_shaping_the_future_of_global_logist
ics/dhl [Accessed on 14/11/18]
WANG, Q. and LUO, Q., (2016) Chain Operation Innovation of Sichuan Cuisine: the
Perspective of Logistics and Supply Chain Management. Innovation and Supply Chain
Management, 10(3), pp.101-105.

REPORT: 13
Wilding, R. (2018) KFC: an important MBA case study in Risk, Supply chain. Available on:
https://www.cips.org/en-SG/supply-management/opinion/2018/february/kfc-an-important-
mba-case-study [Accessed on 14/11/18]
Zhu, L., Anagondahalli, D., and Zhang, A., (2017) Social media, and culture in crisis
communication: McDonald’s and KFC crises management in China. Public Relations
Review, 43(3), pp.487-492.