MKG721 Food Marketing

Introduction:

Kentucky Fried Chicken, which is known as KFC in common parlance, is one of the most well known fast food chains in the world. It has mainly acquired an international reputation for selling and marketing top quality chicken products to loyal customers around the world. Established in the year 1955 in Kentucky, KFC has now emerged as one of the most beloved chains of restaurants with branches spread out across in 120 countries. At present, the company has annual revenue of more than ten billion dollars ("KFC", 2018). In the following report, the supply chain process of KFC will be discussed and recommendations will be made for its improvement.

Discussion:

The existing supply chain management at KFC

The supply chain of KFC would consider all the individuals involved in the manufacture and production process beginning from the procurement of raw materials right down to the distribution centers which are in direct contact with the customer. The KFC branches across the world follow a DRP system when it comes to supply chain management, which stands for distribution requirement planning (Herzi, 2013). This process entails procurement planning, planning for raw materials, distribution planning, supply resource files and inventory files (Giri, Chakraborty & Maiti, 2015). The manager at the particular outlet of KFC would order for the required raw materials. These would include frozen goods, dry goods and wet goods where the latter is ordered on a daily basis to ensure that only fresh produce is used. As part of the supply chain of KFC, it is important to first analyze the purchase cycle to get a solid understanding of customer demands. Based on that, production plans would be prepared.

The raw materials would be obtained from facilities that are self owned. The chicken and sauces or spices are procured from markets and poultry farms. The transportation of raw materials is done through hired transportation services. The distribution managers would be responsible for coordinating all the facets of the supply chain.

Evaluation of KFC’S supply chain (SWOT)

Strengths

• KFC has a clear understanding of the flow of product from the supplier to the consumer. That makes it easier to facilitate the flow of product from one level to another in the supply chain.
• Top quality products used.
• Raw materials mostly obtained from self owned stores or poultry farms, thus guaranteeing top quality resources.
• Distribution chain well defined.

Weaknesses

• Lack of coordination between supply chain levels
• Human resources are not skilled or trained
• Flawed information technology systems

Opportunities

• The fast food industry around the world is growing at a rapid rate, despite the various concerns regarding the harmful impacts on health and the growing economic crises. KFC, which has already established itself as a name to be reckoned with in the fast food industry, has immense opportunity to make a favorable international presence.

Threats

• Sudden changes in the market
• Changing consumer demands
• Intense competition with rivals

Key issues

Based on the S.W.O.T analysis, the following issues have been identified:

• There is a lack of collaboration between the various levels of the supply chain. Inefficiency as far as communication and coordination is concerned has often resulted in delays within the supply chain (Li et al., 2014).
• Technological factors are instrumental in shaping the supply chain (Smith & Rupp, 2015). Information Technology regulating the flow of product within the supply chain is underdeveloped. As a result, the supply chain has slowed down.
• The availability of data needed for logistics is not efficient.
• A supply chain like that of KFC would require a highly skilled workforce for seamless coordination (Chen et al., 2012). However recently, the quality of manpower employed at KFC has fallen, thus adversely affecting the supply chain. Moreover, there is a lack of transparency within the supply chain (Marshall et al., 2016).
• At present, there are several new trends that have emerged which seek to improve the supply chain (Seuring, 2013). However, the supply chain management process at KFC is outdated and lacks development and research.
• Recently, a number of changes have been implemented in company regulations which have hindered the smooth flow of the supply chain.

Recommendations for improving the supply chain

• The supply chain of a fast food company like KFC should be free of hassles. This is all the more poignant given the fact the transported raw materials are perishable in nature. Thus, there needs to be more collaboration and coordination between the stakeholders involved in the supply chain process. Facilitating open lines of communication and more collaboration between the parties involved would ensure a seamless and smooth flow of product to the customers.
• Information technology at KFC would have to be enhanced. In an age of technological advancement, KFC should make use of available technological resources to avoid the loopholes in the supply chain.
• Efficient training programs should be implemented where every member of the supply chain beginning from the suppliers to the logistic providers would be provided specialized training on how to reduce time consumed in transportation and procurement of raw materials. This would reduce the glitches within the supply chain.
• The hiring and recruitment process within the supply chain must be improved. Since the supply chain of KFC is entirely dependent on its manpower, the quality of the workforce would have to be improved. A team of competent and efficient individuals must be hired by the company to coordinate and manage the supply chain.

Conclusion:

To conclude, it can be said that the supply chain process at KFC plays a crucial role in determining the quality of the end products delivered to the customer. At KFC, a specific distribution requirement planning method is used in the supply chain where the distributor is responsible for coordinating the flow of product. Lack of coordination and team work within the supply chain has led to a number of delays and glitches. Thus, it is the responsibility of the company to ensure tactful supply chain management which would take into consideration all the concerned parties, their interests and provide for collaboration between the same.

References:

Chen, X., Hao, G., Li, X., & Yiu, K. F. C. (2012). The impact of demand variability and transshipment on vendor's distribution policies under vendor managed inventory strategy. International Journal of Production Economics, 139(1), 42-48.

Giri, B. C., Chakraborty, A., & Maiti, T. (2015). Quality and pricing decisions in a two-echelon supply chain under multi-manufacturer competition. The International Journal of Advanced Manufacturing Technology, 78(9-12), 1927-1941.

Herzi, A. (2013). KENTUCKY FRIED CHICKEN (KFC) SUPPLY CHAIN MANAGEMENT. Al-Madinah Managment and Finance Science, 1(4).

KFC. (2018). Retrieved from https://www.kfc.com/menu/chicken

Li, D., Wang, X., Chan, H.K. & Manzini, R.. (2014). Sustainable food supply chain management. International Journal of Production Economics, 152(0), pp.1-8.

Marshall, D., McCarthy, L., McGrath, P., & Harrigan, F. (2016). What's your strategy for supply chain disclosure?. MIT Sloan Management Review, 57(2), 37-45.

Seuring, S. (2013). A review of modeling approaches for sustainable supply chain management. Decision support systems, 54(4), pp.1513-1520.

Smith, A.D. & Rupp, W.T. (2015). Supply chain integration and innovation in a global environment: case studies of best business practices. International Journal of Logistics Systems and Management, 22(3), pp.313-330.