Supply Chain Process

As the news broke late last week that several KFC restaurants in Kent were closed due to delivery issues, the importance of ensuring that you have a robust supply chain has been brought into the spotlight.

KFC have started to reopen their stores, by mid-afternoon on Wednesday 21 February 628 of the 900 stores were open, compared with 430 at 13:00 on Tuesday 20th February.

However, some KFC outlets will remain closed for the rest of the week, while others will have a reduced menu or shortened hours.

On 13 February the fried chicken chain switched its delivery contract to DHL, which has blamed "operational issues" for the supply disruption. The GMB union said it had tried to warn KFC that switching from Bidvest to DHL was a mistake. The change led to 255 job losses and the closure of a Bidvest depot, said Mick Rix, GMB national officer.

He said: "Bidvest are specialists - a food distribution firm with years of experience. DHL are scratching around for any work they can get, and undercut them.

"KFC are left with hundreds of restaurants closed while DHL try and run the whole operation out of one distribution centre".

DHL said: "Due to operational issues, a number of deliveries in recent days have been incomplete or delayed. We are working with our partners, KFC and QSL, to rectify the situation as a priority and apologise for any inconvenience."

A KFC spokesperson said the decision to change supplier hadn't been taken lightly.

KFC admitted there would be "significant losses", as a result of the problems but said "we can't put a precise figure against this".

It also said "regrettably some chicken had to be scrapped", but added "we are doing everything we can to avoid wastage".

"To be clear, nothing will leave for delivery or be served at our restaurants that doesn't meet our incredibly high standards."

How can companies try to prevent incidents like this occurring?

It is important to ensure you have a comprehensive supply chain process in place and that your business is meeting the rules and regulations enforced by law. You need to ensure as a business that you have transparent decision making in place in relation to your supply chain. 

You should consider the following elements :

  • You should have an in depth knowledge of your supply chain with an up to date list of suppliers;
  • In case of a crisis you need to be able to respond swiftly regardless of the time of day;
  • Ensure you know your contractors  - you should know their reliability, any risks associated with using them, and how those risks can be controlled;
  • Customer demand planning - ensure your supply chain can deal with planned workloads (and sudden changes). Consider having multiple delivery contractors/planned redundancy in your supply chain so you can quickly switch to alternatives if required and not have a collapse in your supply chain if one is unable to deliver. If you do only have one then they need to be able to ensure that if they face issues they have solutions so they are still able to deliver; and
  • Ensuring full compliance across your supply chain through regular audits and risk assessments.

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