Questions Remain Over Kentucky Fried Chicken Supply Chain Debacle

No doubt the Kentucky Fried Chicken supply debacle will fade from the collective memory quickly, but at the moment there are many questions unanswered. It’ll be interesting to see if any eventually get addressed in court, for instance if franchisees go after some loss of profit compensation, or KFC itself claims against DHL and QSL, the suppliers involved.

The problems also went beyond pure logistics errors by the sound of it. Rugby Borough Council weren’t too happy to find out from the media that chicken was being stored in their town.  The depot had not been registered for that purpose, apparently.

As the Guardian reported:  “The storage depot at the centre of the KFC chicken crisis had not been registered or inspected before problems emerged this week, and could have been closed down for breaching safety rules, a local council has revealed”.

So, some key procurement-type questions:

  • How was the decision made to switch the KFC contract from Bidvest, a specialist food distribution firm, to DHL, who are (to our knowledge) less known as experts in that field?
  • What were the evaluation criteria for the decision – was cost the main factor, or did the parent company really see other benefits in the DHL / QS proposal (as they claimed)?
  • Was sufficient time allowed for DHL to gear up for supply, to plan the change, to get any new facilities on stream …? Were any contingency plans in place - if so, why did they fail?
  • How on earth could DHL fail to get permission for that depot – such a basic error.

Some reports (and the best I found was in The Sun, surprisingly) suggested that the problems started when trucks got stuck in an accident on the M6 motorway between depot and deliveries. But how could this possibly have led to the scale of problems we have seen?

Is this a logistics problem – the wrong stock in the wrong place, not enough drivers or trucks or some similar issue? Or was it fundamentally a systems problem – we don’t know where the stock is, we’ve lost sight of orders and deliveries, or product traceability has been compromised? That feels more likely to be honest.

But I can’t help thinking about what would have happened if this had occurred in the Mars Group (where I worked for 9 years at the start of my career).  Well, I think Mr Mars himself would have arrived at the relevant HQ within 24 hours of disaster striking. He would have called every manager together in the canteen and said this.

“Right, I have told Bob (head of transport) to hire every f***ng freezer van in England. I want every one of you in a van by lunchtime. You drive to the warehouse, you pick up stock, you deliver it to the outlets. You do that until every single one of them has chicken. And do not dare to come back here and sit at your desks until that has happened or I will personally wrap this f *****ng baseball bat around your necks”.

And we would have done that. Not the baseball bat, but the boots on the ground. Keep paper-based records if necessary, but keep the customer satisfied. Protect the brand. Think about “mutuality” – the Mars principle that means the firm really would worry about franchisees, and staff, unlike KFC who announced that “staff could take holidays” – not much good if you are on a zero hours contract.

One final thought. DHL has already won three (plus one in a joint venture) of the NHS “future operating model” category tower contracts to supply hospitals around the country. They may well win the overall distribution contract too – that will be embarrassing if and when the NHS announces that decision, given recent events. But let’s hope they make a better job of providing life-critical items to our hospitals than they have in terms of chicken.

(OK, one more final point – while we understand the issues that Mick Rix, the GMB labour union official, has been raising about the switch from Bidvest to DHL , we don’t think he strengthens his case by using bad chicken puns in every statement he makes e.g.   “It’s taken days to uncover the real truth about the shambles at this DHL hub that has plunged KFC’s supply chain into total chaos. They’ve been winging it.”

That makes this all sound like a bit of a joke – which of course it really is not. Perhaps he thinks it has to be like this to get coverage but it de-values the issues, we suggest.)


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First Voice

  1. I hate DHL:

    I saw the headlines – KFC chicken shortage – and jokingly thought to myself – “Ha, what did they do – hire DHL?”

    Oh, they did.

    Im off to Morleys to celebrate my schadenfreudeprophezeiung

    I suggest KFC make amends by bringing back the ribs.

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