Supply chain failure closes more than half of KFC fast-food outlets

  • 20 Feb 2018

Many people take fast-food convenience for granted. This week, Kentucky Fried Chicken (KFC) has been forced to close many of its 900 UK branches. The reason? Supply chain disruption.

The fast-food giant, in a press release stated; “We've brought a new delivery partner onboard, but they've had a couple of teething problems - getting fresh chicken out to 900 restaurants across the country is pretty complex!”

By changing their delivery partner, KFC has faced delays in receiving their daily delivery of fresh chicken, meaning their restaurants aren’t able to supply customers and ultimately have had to close.

What does this mean for KFC?

KFC have sprung into action to manage any reputational damage, ensuring their press and media relations teams are responding to queries using social media channels and open and honest press releases. They have even set up a page on their website which allows their customers to check which restaurants are open and closed.

KFC don’t only have their customers to contend with. The costs of a disruption like this can be seriously damaging. The company has confirmed that they will be paying their staff according to their salary rate or their average working hours, depending on contract types. Whilst staff have been advised to take annual leave during the disruption, they have not been forced to.

KFC also have the loss of sales revenue to factor in. Whilst the cost implications of this disruption are yet to be confirmed, it’s suggested the giant could be losing up to £1million per day.

Considering 80% of KFC restaurants are franchised, they must also ensure these relationships are protected and those franchises are responding positively and consistently to the disruption.

Could this have been avoided?

In the business continuity and resilience sector, we’re always looking for better ways to secure our supply chains. Could KFC have done more to ensure their supplier was suitable for the job? Perhaps multiple supplier contracts could have spread the weight of the mammoth delivery task?

GMB is a general union which supports members from many professional backgrounds. In a statement, they claim to have warned KFC about the risks associated with changing their delivery partner from a specialist food delivery service to a general delivery company.

KFC will need to respond to complaints and back-up their reasons for changing supplier, however, for the meantime, their priority must be providing their customers with the expected products and ensuring their product and service quality is not affected.

Have you looked at ways to protect your supply chain? Take a look at the BCI’s Supply Chain Resilience Report 2017 to see if you are doing enough to protect your organization and customers.

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