This report highlights the importance of effective logistics and supply chain management. Discussion in relation to the given case study KFC sheds important knowledge about the requirement of better logistics management for ensuring clients’ satisfaction. Some important logistics features help the firm to avoid delay in delivery of required products to customers. Innovations in e-commerce are of better help to ensure better and flawless delivery. These have been mentioned in this report which also has suggested some measures for KFC to ensure its logistics related aim.
Across the world, KFC is known as the second largest restaurant chain right after McDonald’s. This firm is based in the US and the full form is Kentucky Fried Chicken. This restaurant has specialization of fried chicken. KFC is present in more than 123 countries and branches spread across twenty thousand locations across the world. The company was formed by Colonel Sanders in the US. If a number of locations in the world are considered, this firm is considered the fourth-largest restaurant chain.
KFC is one of the leading brands across the world with its chicken-centric fast food operating segment catering to a wide age spectrum of the population. The firm has achieved remarkable growth and reputation in its operating field and its success story acknowledges to its rapid development of restaurant chain business depending on logistics management which has been a key contributor to business growth. Its logistics and supply chain management is based on the notions of fast moving consumer goods, and consumer packaged goods that denotes fast consumption by consumers (Christopher, 2016). The market of consumer package goods and its growth capacity are dependent on standard of living and its subsequent improvements, consumer preferences and product acceptance by the end-users. Moreover, KFC taking these factors into consideration along with the supply chain has been constantly reinforcing its day-to-day business activities. KFC regards its restaurant chain business as demand driven and views abrupt fall in demands as the most detrimental factor in business. This causes the firm to keep its supply chain and logistics operations tied together to derive maximum better performance. The firm knows that business performance in consumer package goods is always uncertain even being operational within a secure brand performance. Considering this, KFC keeps its supply chain framework under constant evaluation so that business is always supportive of meeting a sudden rise in demands thereby ensuring satisfaction among customers. Better sourcing and effective logistics network for ensuring overall delivery of products are the important performance criteria set by the firm in the competitive market for remaining a favourite brand among its customers (Jacobs, Chase and Lummus, 2014).
Logistics variables of KFC come under two essential aspects which are supplier management and supply chain on logistics model.
KFC’s products are the raw materials used as input in producing final edible products for customers. These are decided by the suppliers from the head office of the firm. Supportive raw materials such as bread, vegetables are looked after by suppliers at districts level. KFC does an evaluation of the system of its supplier chain management and also determines alternative suppliers. The firm has a supply chain system known as Star System (Dekker et al, 2013).
This considers the adequate volume of evaluation by the firm and the five domains of quality, financial, technical, communication and reliability are taken into consideration. Within each 3 to 6 months, evaluation is performed by KFC to understand its functional strengths related to logistics department and this becomes much better in presence of review of purchase, technical as well quality departments to ensure the overall efficacy of supply chain management. Several associated features are existent in connection with the logistics and supply chain framework of the company and these are planning of requirement, inventory operation, planning of procurement and distribution planning to create certainty about the smooth and faultless delivery of products to customers (Rushton, Croucher and Baker, 2014). Since business is operational in an environment of uncertainty and instability, it is always binding for the company to ensure that all the variables could function to their best capacity and this further requires the support of better thinking and strategic planning.
Supplier management system of KFC is branded as Star system that depends on coordination among suppliers function from headquarter as well as district level. This creates more possibility of better availability of final products among customer at the right time and right places. Assurance of timely supply gets maximized due to consideration for arranging alternative suppliers in event of a sudden increase in demands among customers. Departments interrelated in this logistics framework of KFC are technical, quality, finance, purchase or procurement. The overall functional capacity of these departments is always evaluated in the line of logistics requirement (Wang et al, 2016). The observation builds sound logistics and supply chain that makes delivery possible within stipulated time for ensuring that delays are nil or minimum. The firm within its Star system of logistics and its better evaluation with adequate fleets of delivery vehicles can minimize the delay in delivery to customers. Additionally, some helpful aspects in these aspects are planning of requirement, inventory operation, procurement and distribution planning for helping the entire logistics operation of the firm to ensure that delay are avoided (Seuring and Gold, 2012).
Focusing on the given case study, availability of chickens could have been better ensured by the firm for the satisfaction of its clients by arranging supply and distribution network within the single logistics framework under the supervision of star system.
The variables of logistics in KFC are of great help if are properly organized for performing at the utmost level of logistics functions. The surge in demands of products could be supported by alternative suppliers besides regular suppliers of the firm. Observation based on analysis of logistics performance under the STAR system can develop new methods and their adoption to support supply chain functions by eliminating aspect that is identified as underperformers. These all have a huge likelihood of meeting customers’ expectations in support of effective planning that includes consideration on quality and better purchase and procurement to maximize satisfaction level among customers by offering better products (Carter and Liane Easton, 2011).
E-commerce is a platform which enables selling and buying of goods through an electronic network. In this platform of business, the primary importance is the use of the internet to ensure fast and effective selling and buying process. The transactions in businesses can be of several types which are business to business, and business to consumers.
E-business is running of business with help of internet. This includes business with help of computer and internet and involves buying as well as selling process. In e-business, the internet is the most essential factor that helps to sell products to customers. This also includes offers of customer support to customers (Van Weele, 2010).
In e-commerce, buying and selling of goods are the main aspects, unlike e-business which denotes that a firm has electronic presence through the internet to promote its services and goods for running a business. This does not always include selling and buying goods. E-commerce is an important part of e-business. E-commerce and e-business both include the exchange of information with customers but financial transactions related to buying and selling are features of e-commerce only.
E-commerce is a drive of business promotion for increasing the exposure of business to maximum numbers of customers. KFC holds a unique collection of themed products for holiday season. KFC has focused on its products on an e-commerce platform and this is implemented through improving products such as fried chicken and other merchandises for speedy selling among customers (Myerson, 2012). KFC prioritizes the e-business proposition on basis of the belief that strategic growth, as well as direction, is dependent on fast and effective selling process which becomes possible with help of online platform. Determination of service benefits for customers is the essential basis of e-commerce planning and design of KFC. Moreover, KFC has ensured its presence internationally through a mobile app and the new arena of operation is a system of mobile payment (Tokar, 2010).
KFC has launched mobile ordering facilities for its customers. For iPhone users, Fast Track app is available to meet their demands. The company plans to launch a web app for consolidating the online ordering facility more.
The e-commerce site of the company is smartened by an innovation named as ‘finger-licking’ holiday products. KFC wanted its customers to revel into the holiday mood by exclusive product offerings. Seasonal products are launched by the e-commerce website of the company. The offers include fried chicken themed pillows, apparel and wrapping paper. The products are affordable by customers and are available for them subject to availability of products.
KFC in course of preparing a new solution for making more visibility of menu and submenu has focused on introducing a better system in its support. The system of navigation has been made more convenient for customers. Customers can see the products line of KFC by scrolling. The website could be navigated by them even they are not conversant with the KFC menu. Products of the same class can be compared. The firm is trying to confirm that the present website includes the visual presentation of each and every merchandise in navigation for the convenience of customers (Prajogo and Olhager, 2012).
As per the case study, KFC failed miserably to supply chicken to meet its customers’ demand. This problem can be averted and any such delay or stock exhaustion can be controlled by KFC by undertaking the aforesaid measures of innovation. There are a host of benefits for the firm to facilitate customers in finding their required product within time when these are needed the most.
Products can be availed much faster by customers through online order placement. Since products can be delivered based on availability, therefore KGC cannot be blamed if customers miss out on the opportunity to avail the offer. With the improved visual presentation of products by proper navigation purchase decisions and selection of products by the customers are likely to take minimum time (Pettit, Fiksel and Croxton, 2010).
Mobile ordering app is likely to help customers in numbers of ways towards minimization of delivery time. The ordering app has a technology named geo-targeting and this facilitates customers to identify KFC at their nearest places. Since products and menu cards are better viewed than before, customers compile orders for products. Customers get confirmation for picking up the products after these are paid off by them. KFC by this process can completely avoid delay as customers are enabled to avoid the queue and they can directly proceed to a point which is separately designed for KFC fast track users (Waters and Rinsler, 2014).
From the aforesaid discussion, it can be concluded that KFC through its innovation in E-commerce and e-business can ensure complete elimination of delay and customers can be more satisfied. E-commerce and related innovation practices by KFC if are integrated into logistics and supply chain network then the possibility of a higher level of satisfaction among customers can be ensured.
Some practices related to logistics can be of better help for KFC to support its business objectives and satisfaction among customers.
The firm needs to focus on ensuring that supply is never affected and resources for ensuring supply are assured. KFC must look into the aspects like order processing time and time of transmission. These need to be minimal for satisfying customers by assuring fast delivery of products. This needs to be implemented in the online domain of business also and customers should get a quick response from the firm than expected (Seuring, 2013).
This needs to take suppliers, distribution points and delivery personnel at the supply chain network for ensuring products availability to stores by proper inventory management. Products out time from stores need to be minimal after receiving orders from customers. Arrangement needs to be separately ensured for online customers so that delay in delivery can be completely minimized (Fernie and Sparks, 2014).
The entire supply chain and logistics operation of the firm must be operated under a single system of operation that looks distribution as a separate function with a focus on planning and arrangement. This needs to take into consideration the aspects of arrival time of raw materials, packing, and shipping transportation. There must be a team of evaluation for performing capacity approval, loading efficiency checking of vehicles, the safety of products or delivered items. The company needs to have a facility of distribution located centrally but products could be delivered across a wide area (Ahi and Searcy, 2013).
A dedicated team of analyzing the supply chain efficiency of KF could cause rapid improvement. Performance related flaws can be noticed. Abnormality in demands can be predicted and arrangements can be made faster based on demands study by the separate team for analysis. A standardized management is always effective in this situation. KFC needs to keep its stocks ready based on a report produced by a team of experts regarding the probability of demand and supply fluctuations. This could be of help to avoid a problem like stock exhaustion (Carter and Liane Easton, 2011). Online customers are less patient in comparison to offline customers. Therefore their demands need to be fast addressed by arranging delivery team without going for any further recruitment but from present set of delivery personnel. Performance of distributors needs to be always evaluated and must keep ready, alternative distributors in event of failure by existing distributors. This will avoid unnecessary time consumption in process of searching other suppliers.
Conclusion:
KFC is a famous US-based brand dealing with fried chicken and other products. This report is based on the given case study. KFC has logistics variables which if are better used then delay in delivery could be avoided. The firm has concentrated on making its e-commerce business effective. Some recommendations have been mentioned herein for improving the service level of the firm and maximum satisfaction among customers can be ensured.
References:
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of cleaner production, 52, pp.329-341.
Carter, C.R. and Liane Easton, P., 2011. Sustainable supply chain management: evolution and future directions. International journal of physical distribution & logistics management, 41(1), pp.46-62.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dekker, R., Fleischmann, M., Inderfurth, K., and van Wassenhove, L.N. eds., 2013. Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Myerson, P., 2012. Lean supply chain and logistics management. New York: McGraw-Hill.
Pettit, T.J., Fiksel, J. and Croxton, K.L., 2010. Ensuring supply chain resilience: development of a conceptual framework. Journal of business logistics, 31(1), pp.1-21.
Prajogo, D. and Olhager, J., 2012. Supply chain integration and performance: The effects of long-term relationships, information technology, and sharing, and logistics integration. International Journal of Production Economics, 135(1), pp.514-522.
Rushton, A., Croucher, P., and Baker, P., 2014. The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.
Seuring, S. and Gold, S., 2012. Conducting content-analysis based literature reviews in supply chain management. Supply Chain Management: An International Journal, 17(5), pp.544-555.
Seuring, S., 2013. A review of modeling approaches for sustainable supply chain management. Decision support systems, 54(4), pp.1513-1520.
Tokar, T., 2010. Behavioral research in logistics and supply chain management. The International Journal of Logistics Management, 21(1), pp.89-103.
Van Weele, A.J., 2010. Purchasing & supply chain management: analysis, strategy, planning, and practice. Cengage Learning EMEA.
Wang, G., Gunasekaran, A., Ngai, E.W. and Papadopoulos, T., 2016. Big data analytics in logistics and supply chain management: Certain investigations for research and applications. International Journal of Production Economics, 176, pp.98-110.
Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.
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