KFC which is also known as 'Kentucky Fried Chicken' (KFC, 2018), is a US-owned fast-food brand that specializes in serving chicken worldwide. KFC commenced in the UK in 1965, and since then, the firm has expanded rapidly, with KFC restaurants in 850 locations in the UK alone (KFC, 2018). It has been reported that KFC 'is the world's second-largest restaurant chain after McDonald's measured by sales (Franchising.com, 2018).

Although KFC is the UK's most admired chicken brand, throughout February 2018, there had been a large number of chicken shortages which were caused by a severe delivery issue that led to the shutting of 562 KFC restaurants (Weaver, 2018). KFC specified on their social media pages, websites, and posters outside their restaurants that their new logistics partner DHL had 'teething problems.' (Weaver, 2018) KFC's new logistics partner DHL is an international logistics company that ships parcels globally. The logistics company 'connects people in over 220 countries and territories worldwide (Anon, 2018). Likewise, 'DHL is the world's largest logistics company with over 360,000 employees' (Anon, 2018). DHL has invented the international air express and specializes in shipping and delivering parcels worldwide (Anon, 2018).

KFC operational issue's occurred when 'KFC switched its deliveries from Bidvest Logistics to DHL' (Weaver, 2018). Bidvest,

also known as Best Food Logistics, is a food logistics company that has been 'delivering great food and supply chain solutions' (Best Food Logistics, 2018) since 1999. The company specializes in delivering food in the UK to popular fast-food restaurants such as Pizza Express, Burger King, Nando's, TGI Fridays, and more. (Best Food Logistics, 2018) When KFC replaced Bidvest with DHL, there was a fault in the supply chain due to DHL developing problems in delivering chicken to KFC outlets. The problem in the supply chain caused an operational issue for KFC.

OPERATIONAL PROBLEM-Supply Chain Problem

KFC's supply chain is responsible for the operational problem that the company faces. On 17th February 2018, KFC announced the restaurants ran out of chicken due to new delivery contractors DHL having 'teething problems (Evening Standard, 2018). KFC had brought new delivery contracts replacing Bidvest Logistics to DHL; the new delivery contractors DHL 'was struggling to cope with supplying 900' (Allen & Allen, 2018). KFC stores. Therefore, this led to KFC having no choice but to closedown over '500KFC stores' (Evening Standard, 2018), which led to frustrated KFC customers that had shown up to closed KFC branches. This also leads customers to make complaints on social media such as Twitter, Facebook, and Instagram. The social media comments escalated, leading to KFC's reputation being damaged as the company ran out of chicken in the UK. (Evening Standard, 2018)

Furthermore, the KFC outlets that were open had limited menus to offer; this continued to cause problems within the KFC stores as employees of KFC and customers argued about the limited menu. According to an article, reports found that KFC made a dreadful mistake taking on DHL as labor union officials cautioned KFC that bringing on DHL would be a disaster as DHL has limited experience in food distribution (Supply Management, 2018). DHL, which is KFC's new logistics partner, caused a short-term supply interruption which caused KFC's operational issue. The supply chain DHL operates worldwide in over 200 countries, distributing parcels internationally. DHL is under pressure working with a fast-food company, as DHL lacks experience with distributing fresh meat. Compared to KFC's old logistics, Bidvest has more experience in delivering fresh food to busy fast-food companies. Bidvest logistics supplies other popular fast-food brands such as Pizza hut, Burger King, Pizza Express, and more.

Metro UK reported that DHL found it challenging to deliver the chicken and was struggling with the lack of DHL lorry drivers they had. The lorry drivers that were on duty were stuck in traffic; when they tried to deliver a large number of products to their distributors, this led to the wrong items being delivered to the wrong outlets. Unfortunately, it was too late for KFC to change their food supply chain as they approved the contract with DHL. DHL is not experienced in the food supply chain. This has affected KFC restaurants not being able to receive fresh chicken for a few days, and some KFC outlets waited weeks. The fault in the supply chain was also due to DHL having access to only one warehouse in Rugby which was a major problem for DHL as they did not have the space for their supplies. Also, the one warehouse was too far from some KFC outlets; therefore, this is the reason when drivers got stuck in traffic, the chicken deliveries were late. Compared to KFC's old logistics, Bidvest had over six warehouses which made it easier for them to be more organized with their products to supply KFC.

In addition to this, the supply chain was affected as a new software system was introduced by a third party called QSL (Quick Service Logistic), and DHL had to adapt to using the new software quickly. According to 'technology analyst Chris Green, DHL failed to collect the right data from KFC's order; the reason for this is due to DHL not knowing how to use the new software. This led to DHL making mistakes on KFC chicken orders, and communication between the two partners was unclear; this caused a problem for KFC's supply chain. Although DHL has apologized for the operational problem, they still negatively affected KFC's profit as the operational issue had an outcome of the fast-food chain having a 'revenue loss of at least 920,000 per day' (Boulton and Marketing, 2018). This loss has not been made by KFC since 2016; therefore, it affected KFC's income a lot.

Moreover, the reason KFC's supply chain was in trouble was due to KFC replacing Bidvest, which is a well-known and experienced logistics for DHL, which is a low experienced food distributor. This mistake should have been avoided as KFC is a successful business, so they should invest more money to have the best logistical partners. In comparison to other successful fast-food restaurants in the UK, such as Burger King has never had a problem with their supply chain as they have contracts with a reliable logistical company that is Bidvest logistics.

Also, KFC's supply chain issue has had an outcome of KFC operational issues increasing by receiving negative comments on social media and angry consumers who mocked KFC's services and menu. Social media posts about KFC shortages of chicken had been 'shared 219,138,216 times on social media and KFC had 796,709,795' editorial coverage due to the lack of chicken in the UK restaurants. The outcome of the operational issue has caused KFC to be on the front page of newspapers such as Metro and Sun, which caused KFC's bad reputation.

References: KFC Operational Problem in The United Kingdom. (2022, February 21). Edubirdie.

Questions

1. Based on the 6 SCM Processes,please identify which SCM process that got impact from the KFC's Supply Chain failure, and identifythis supply chain failure was/were mostly caused by who? KFC/DHL/QSL/another party? And why? Provide your answer withdetailed explanation!
2. Find information about QSL(Quick Service Logistics) as a company who introduced a new software system. Why did the implementation of these software not work well? (You may find other references regarding this matter)!
3. Propose your SCM solutionfor this KFC Supply Chain failure, and what KFC must do to avoid this problem in the future?
4. "This also leads customers to make complaints on social media such as Twitter, Facebook, andInstagram. The social media comments escalated, leading to KFC's reputation being damaged as thecompany ran out of chicken in the UK. "Based on this statementfound from the article,what kind of CRM (Customer Relationship Management) component(s) that might be implemented by KFC during the crisis?Explain your selection!

Please put your references link