Challenges Faced by Companies in Supply Chain Management and Impact on Customer Retention

Research Project

Abstract
Supply chain management play an important role in maintain high quality of the finished
goods and services that are produced by company so it is important that companies have an
efficient SCM so that high quality of goods and services can be offered to customers so that
customer retention can be increased. The companies also need to effectively deal with challenges
faced while maintaining effective supply chain in company so that high customer satisfaction can
be achieved which is important to gain a competitive edge in market.

Table of Contents
Abstract............................................................................................................................................2
Research Topic.................................................................................................................................4
“To identify the situation faced by company pertaining to suppliers and its impact on customer
retention.” A study on KFC.............................................................................................................4
Chapter 1-Introduction.....................................................................................................................4
Aims and objectives...............................................................................................................4
Research rationale..................................................................................................................5
Chapter 2-Literature Review............................................................................................................5
Chapter 3-Research Methodology...................................................................................................7
Chapter 4-Analysis and Findings...................................................................................................13
Chapter 5-Critical appraisal, Recommendations & Suggestions...................................................20
Chapter 6- Conclusion...................................................................................................................21
REFERENCES..............................................................................................................................22

Research Topic
“To identify the situation faced by company pertaining to suppliers and its
impact on customer retention.” A study on KFC.
Chapter 1-Introduction
While operating in the competitive business environment it is important that companies maintain
a strong supplier network so that there is an efficient and continuous supply of requires goods
and services which are to be further utilised in manufacture of company’s final products and
services. It is also important that companies maintain an efficient supply chain management so
that flow of goods and services can be managed in company that can help in effective supply of
the required raw materials in appropriate quality and at reasonable rates. The quality of supply
available with company determines the quality of final goods and services that are delivered
ultimately to customers (Skuza, McDonnell and Scullion, 2018). Thus suppliers play an
important role in maximising customer satisfaction and also help in their retention in company.
In this report KFC is taken which is an American fast food restaurant chain having its
headquarters in Texas, US. The company is specialised in fried chicken, chicken sandwiches,
wraps etc. and is located in about 2261 global locations. In this report a small scale research is
conducted so that the challenges that are faced by companies due to suppliers along with their
impact on customer retention can be evaluated. Various research tools and techniques will also
be used during this research that will help in obtaining effective results and completing the
research on time and in an efficient manner.
Aims and objectives
Research aim: To identify the situation this is faced by KFC in relation to its suppliers and its
impact on customer retention.
Research objectives
 To determine the importance of retaining customers in business.
 To determine the importance of managing operations in company.
 To assess the challenges faced by KFC in storing chicken that also creates an impact on
customer retention.
 To recommend strategies that could be used in KFC so that it can retain its customers.

Research questions
 Why is customer retention important for business?
 What is the importance of managing operations in company?
 What are the challenges faced by KFC in storing chicken?
 Which strategies can be followed by KFC in storing raw materials so that customers can
be retained?
Research rationale
The rationale behind choosing this topic for research is that it will help the researcher in
gaining knowledge regarding the importance of storing raw materials so that more number of
customers can be retained in business (Elegbe, 2016). This research will help in building
knowledge of the researcher regarding handling business and also will develop their academic
and research skills so that overall personal and professional development can be achieved. Also
the results obtained after this research can be applied in company on which it is conducted so
that huge benefits can be generated through the received results. Further the research will also
help the researcher in improving their research knowledge which is important for getting future
research projects.
Chapter 2-Literature Review
Importance of customer retention for companies
For a company having loyal customers can help it in earning huge profits and with a 5% increase
in customer retention the increase in company profits are about 25%. Being able to retain
customers in business can help the company in building a strong brand image in market and also
the cost and efforts required for marketing about its goods and services can significantly reduce
(Lin and Tseng, 2016). The company is able to gain a competitive advantage in market as it is
able to attract its loyal base of customers and also these customers can help in generating
referrals for company which can increase its customer base leading to an increase in sales. In
order to retain a large number of customers it is important that company improves the quality of
goods and services so that high customer satisfaction can be achieved (Ambrosius, 2018). Also it
is important that businesses offer products to its customers based on their likes and preferences

so that high customer experience can be achieved. Customer retention also helps businesses in
improving their products and services so that high customer satisfaction can be achieved.
Significance of managing business operations
For a business it is important that its operations are streamlined properly and monitored
professionally so that all the activities that take place in business can be carried out in an
efficient manner. Managing business operations help in completing all the processes in business
smoothly and efficiently so that the company can survive successfully in market. It help in
improving the overall productivity of business, help in catering to customer requirements in an
efficient manner along with increasing the efficient use of resources of company (Saboo, Kumar
and Ramani, 2016). Operations management also help in managing the supply of company so
that only the raw materials which are of high quality can be acquired so that the finished goods
and services produced can be of superior quality that can help in attracting customers and
increasing customer satisfaction. It also help in providing goods and services to customers as per
their demands that can help in retaining customers in business so that repetitive business
activities can take place and profits of company can be maximised. In companies like KFC
managing operations play an important role in effectively using its resources so that high quality
goods and services can be produced and customers can be made loyal towards company
(McCormack and Johnson, 2016).
Challenges faced by company in storing the raw materials
For a business it is important that it maintain an efficient supply chain management in
company so that all the raw materials that is acquired by the company from its suppliers can be
well stored (Wu and Yen, 2016). Storage of raw materials play an important role in maintaining
the quality and standards of final goods and services produced by company as it help in keeping
the properties of raw materials intact. KFC is facing certain problems in storing its raw materials
i.e. chicken in an efficient manner which has lead to the closure of many outlets of company in
various locations. There are various reasons that have been identified which has lead the
company to face such challenges out of which the major one is that the company only has one
warehouse where it stores its chicken which are then transported to all its outlets. As the
company logistics in managing its supply chain is not efficient the company face problems in
making its specialised products to be available to its customers on time. This also affects the