Supply Chain Management of Kentucky Fried Chicken (KFC)

More importantly, the business corporations are also required to ensure the fact that they take the help of adequate communication models or approaches and also anticipate the potential issues that they are likely to face due to the supply chain system which are using and thereby take adequate mitigation measures or formulate contingency plans for the resolution of the same (Fredendall and Hill 2016).

Running head: SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT: ANALYSIS OF THE SUPPLY CHAIN DISASTER
OF KENTUCKY FRIED CHICKEN (KFC)
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Introduction......................................................................................................................................2
Concept of Supply Chain Management...........................................................................................2
Supply Chain Disaster of Kentucky Fried Chicken (KFC).............................................................3
Analysis of the Supply Chain Disaster through the usage of Supply Chain Pillars........................4
Evaluation of the key Communication Concepts and issues in the Disaster...................................6
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
As stated by Christopher (2016), the success of the different business corporations
substantially dependent on the efficiency or the ease with which they are being to procure the
various raw materials needs by them for the manufacture of the services or the products offered
by them. Coyle et al. (2016) are of the viewpoint that the corporations are also required to ensure
that there is a coordination or synchronization among the different inbound as well as the
outbound logistics processes which are being used by them as part of their supply chain
management process. This coordination or synchronization is important since it greatly
determines the efficiency of the supply chain system of the organizations (Copacino 2019). More
importantly, the business corporations are also required to ensure the fact that they take the help
of adequate communication models or approaches and also anticipate the potential issues that
they are likely to face due to the supply chain system which are using and thereby take adequate
mitigation measures or formulate contingency plans for the resolution of the same (Fredendall
and Hill 2016). These measures are important since they help the business corporations to
overcome the issue of supply chain disaster which some of the major business corporations of
the world had experienced in the recent years. The purpose of this paper is to undertake an
analysis of the concept of supply chain disaster through the different supply chain pillar and also
the issues which can give rise to the same in the light of the supply chain disaster faced by
Kentucky Fried Chicken (KFC) in the February of 2018.
Concept of Supply Chain Management
Genovese et al. (2017) have observed that supply chain management is the process
through which the business corporations manage the flow of their goods or services, raw
materials that they need for the manufacture of their services or products, manage their inventory
and also deliver the finished services or products to the markets. Adding to this, Mangan and
Lalwani (2016) have stated that the supply chain management process used by the corporations
is also concerned with the designing, planning, execution, control as well as the monitoring of
the different supply chain activities which are intended to create value for the corporations. In
this relation, it needs to be said that these activities are integral to the effective functioning or for
that matter the operations of the different business corporations and not only directly affect the

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manufacturing process of the corporations through the supply of the raw materials which are
required for the same but also help the corporations to deliver the finished products or the
services to the markets as well (Dubey et al. 2017). However, the business corporations in order
to develop an effective supply chain system are required to develop adequate communication
lines with its different suppliers to ensure the fact that the raw materials needed by it are
available to it as per its needs and convenience (Pettit, Croxton and Fiksel 2019). In addition to
these, it had also been seen that some of the corporations formulate a contingency plan for the
scenarios in which its major suppliers are being able to deliver the raw materials needed by it for
the manufacture of products or services so as to avoid adversely affecting the work of the
corporation (Durach, Kembro and Wieland 2017). This substantially helps the corporations to
avoid the supply chain disasters and also ensures the fact that the corporations are being able to
manage their different business functions adequately.
Supply Chain Disaster of Kentucky Fried Chicken (KFC)
Kentucky Fried Chicken (KFC), established in 1952 by Colonel Harland Sanders, is one
of the largest fast food restaurant chains of the world and it operates in more than 136 different
nations of the world with around 22,621 outlets (Kfc.com 2020). More importantly, the
concerned corporation had been largely successful in developing a high-performing supply chain
system in the different nations of its operations which in turn had directly contributed towards
the success attained by the corporation. However, in the month of February, 2018, the
corporation under discussion here faced one of its worst supply chain disasters in its United
Kingdom operations which in turn made the concerned corporation to substantially redesign its
entire supply chain system (Ft.com 2020). Furthermore, the most important effect of the supply
chain disaster faced by KFC was the fact that the concerned corporation was not being able to
offer Kentucky Fried Chickens to its customers in the nation of UK which as a matter of fact is
the main product of the concerned corporation and after this particular product only the
corporation had named since it ran out of poultry (Priday 2020). More than half of the restaurants
of KFC in UK had to be closed down because of the supply chain disaster faced by the
concerned corporation (Fcsi.org 2020). Moreover, the method of using warehouse which over
the years had formed the highlight of the supply chain system used by the concerned corporation
and had greatly contributed towards its success by helping it cut costs contributed towards the

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supply chain disaster under discussion here faced by the corporation (Forbes.com 2020). In
addition to these, it was seen that the ineffective communication between the different outlets of
the corporation with its distributors coupled with other important issues within the supply chain
system used by the corporation under discussion here contributed to the concerned supply chain
issue (Ft.com 2020).
Analysis of the Supply Chain Disaster through the usage of Supply Chain Pillars
E Lambert and Enz (2017) have observed that the four supply chain pillars, namely,
people, processes, systems and execution, forms the heart of the supply chain strategy used by
the different business corporations. Adding to this, Johnsen, Howard and Miemczyk (2018) have
noted that the effective usage of these four pillars not only enhances the effectiveness or the
efficiency of the supply chain system used by the different corporations but also enables them to
procure the raw materials needed for the manufacture of their products or services and also
enables them to deliver the same to the markets as well. In this relation, it needs to be said that
the pillar “people” is indicative of the key employees of the corporations who are related to the
supply chain system used by them like the procurement manager, distributers, suppliers and
others (Hugos 2018). More importantly, these individuals are required to possess adequate
communication skills, critical decision making and others so as to effectively perform the various
functions related to the supply chain system of the corporations and thereby be of value to the
corporation (Reimann and Ketchen Jr. 2017). Furthermore, the corporations are also required to
ensure the fact that these individuals have a working idea about the overall organizational goals
or objectives, the business strategies followed by them, the demand for the services or the
products offered by the corporations and others so as to be able to adequately perform their job
roles (Fahimnia et al. 2017). In the case of KFC during the supply chain disaster, it was seen that
the key people involved in the supply chain system of the concerned corporation were its
procurement manager, its new distributer DHL which was changed from Bidvest and others
(Forbes.com 2020). Moreover, since the corporation had newly appointed DHL as its distributer
so it did not had adequate information regarding the business goals or objectives, the strategies
followed by it, the location of the different restaurants of the corporations and others which in
turn substantially contributed towards the supply chain disaster that the concerned corporation
faced (Priday 2020).

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As discussed by Pettit, Croxton and Fiksel (2019), the processes pillar of the supply chain
system refers to the core processes which are being used by the corporations for the management
of their supply chain network. Adding to this, Busse, Meinlschmidt and Foerstl (2017) have
noted that some of the most important processes which are being used by the corporations for the
management of their supply chain network are network analysis, need analysis, warehousing and
others. However, in the particular context of KFC it was seen that the corporation was using a
single warehouse which in turn posed the risk of continuation since it was used for the storage of
poultry, risk of delay in supply of raw materials in case of bad weather or poor road
transportation and others (Forbes.com 2020). Furthermore, if also failed to effectively undertake
network analysis or need analysis which in turn was the primary cause behind the overestimation
of the utility of the single warehouse system used by it. In addition to these, since DHL did not
have adequate information regarding the different networks of KFC nor about the various
restaurants of KFC so it became very difficult for DHL to deliver the poultry on time to the
different restaurants (Priday 2020). On the other hand, the systems pillar denotes the different
systems which are being used by the corporations for the adequate management of their supply
chain systems. For instance, the forecasting system, decision support system and others are some
of the most important systems which are being used by the corporations for the management of
their supply chain systems (Christopher 2016). In the case of KFC during the supply chain
disaster, it was seen that the concerned corporation had failed to adequately forecast the
customer demand and also there was no effective decision support system used by the
corporation which in turn would have enabled it to overcome the disaster (Fcsi.org 2020). As a
matter of fact, had the corporation adequately used these two systems then it would have been
able to deliver the poultry to the different restaurants on the basis of the limited supply that it had
for the same taking into consideration the poultry needs of the restaurants (Ft.com 2020).
Fredendall and Hill (2016) are of the viewpoint that the execution pillar denotes the
manner in which the execution of the different processes as well as the strategies related to the
supply chain network of a particular corporation is being performed. Adding to this, Coyle et al.
(2016) have noted that this is perhaps the most important pillar of the supply chain systems used
by the different corporations since regardless of the effectiveness or the efficiency of the various
processes, systems or the people used by the corporations, they would not be able to attain the
desired ends if the supply chain strategies or its processes are not being executed in an effective

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manner. In the case of KFC during the supply chain disaster, it was seen that the ineffective
execution of the supply chain strategy used by the corporation was an important factor which
contributed towards the concerned disaster (Forbes.com 2020). Furthermore, the single
warehouse method had been followed by the corporation for years and the idea behind the
change of the distributer was a good strategic move however the ineffective execution of the
supply chain strategy of the corporation contributed towards the supply chain disaster of KFC
under discussion here (Ft.com 2020).
Evaluation of the key Communication Concepts and issues in the Disaster
Durach, Kembro and Wieland (2017) are of the viewpoint that an effective
communication system is a key determinant for the success of the supply chain systems which
are being used by the business corporations. Adding to this, Genovese et al. (2017) have noted
that an effective communication not only forms the heart of a supply chain system but also
ensures that adequate information is being offered to the different people who are involved
within the same for the completion of their job roles. Furthermore, it ensures the fact that there is
an effective coordination or synchronization between all the people involved in the supply chain
network and raw materials are thereby delivered as per the demands and it also helps in
overcoming any unforeseen issues (Lambert and Enz 2017). However, in the case of KFC, it was
seen that there was a complete breakdown of the communication system which in turn
aggravated the gravity of the supply chain disaster faced further (Priday 2020). In this relation,
the lack of coordination between the distributer DHL and the different restaurants of KFC
perhaps was of utmost importance in the disaster since if there was an effective communication
between then the limited supply of poultry could have been distributed to the restaurants as per
the customer demands which in turn would have substantially resolved the situation (Fcsi.org
2020). In addition to this, there was lack of communication between the supply chain department
of the corporation and the different restaurants of KFC in UK which also contributed towards the
disaster (Ft.com 2020). The corporation should have realized the risks to which it was exposing
itself through the usage of the single warehouse method. It is true that this particular method
offers significant cost cutting options to the corporation yet it makes the delivery of the raw
materials a bit problematic for the distributers especially if the distributer is a completely new
one as was the case with DHL. Lastly, the corporation also failed to communicate adequately the

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contingency plan to the distributer which needed to be followed in case of a supply chain issue or
disaster like the one which it faced in 2018 (Priday 2020). This in turn made the distributer and
also the different restaurants of KFC regarding the actions which needed to be undertaken and
this in turn aggravated the supply chain disaster even further.
Recommendations
The supply chain disaster which KFC faced in the year 2018 had important implications
for the business corporations and below are some of the most important recommendations which
they need to follow for avoiding the same-
 The supply chain disaster faced by KFC clearly indicates the perils of the single
warehouse system which the corporations use for cost cutting purposes. Thus, it is
recommended for the corporations to have multiple warehouses on the basis of the
location of their manufacturing units so as to enhance the effectiveness or the efficiency
of their supply.
 The usage of multiple distributers is also suggested since the case of KFC makes apparent
the perils of using a single distributer. More importantly, before switching distributers the
corporations need to thoroughly analyze their competency and also their ability to deliver
the raw materials as per their needs and convenience.
 The disaster under discussion here also indicates the importance of an effective
communication system which the corporations need to use for the adequate management
of their supply chain system. This will also help the corporations to ensure the fact that
adequate information is being transferred to all the people involved in their supply chain
system.
 The corporations also need to formulate effective contingency plans in case they face a
supply chain disaster or there is a breakdown within the same.
 The corporations need to formulate their supply chain networks or strategies taking into
account the four pillars of supply chain management.

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Conclusion
To conclude, supply chain management is an integral process of the different
corporations and not only helps them to procure the raw materials which are needed by them for
the manufacture of their products or services but also facilitates the delivery of the same in the
markets. Furthermore, the corporations are required to design their supply chain system taking
into account the four pillars of supply, use effective communication systems, formulate adequate
contingency plan for unforeseen circumstances and others so as to avoid supply chain disasters.
These aspects of the process of supply chain management become apparent from the above
analysis of the same in the particular context of the supply chain disaster faced by KFC in 2018.

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