The KFC Fiasco, Why You Really Shouldn’t Wing It
As a marketer I have thoroughly enjoyed the recent furore around the KFC chicken drought. Largely because it was an amazing opportunity to be creative and turn a negative into a positive.
It also helped that the blame could be easily apportioned elsewhere, after all, who hasn’t fallen afowl of DHL or one of their rivals.
Having said that, the resultant lack of chicken in the hundreds of ‘restaurants’ around the country resulted in quite the uproar. (All very odd given the number of other chicken shops out there.)
In the end though, the marketing/PR team did a great job and managed to still the squawking of the media and get public opinion firmly back on their side. Not a bad effort.
Conspiracy theories aside (it would be interesting to see KFC sales once they were opened again), it is a good time to take a look at the fiasco through the eyes of procurement.
As many of you may well know, until very recently, KFC had been using Bidvest, a specialist food delivery company. This all changed with the decision to move to DHL. Whilst expressing regret at the fact over 200 people lost their jobs as a result of this change, KFC quoted DHL as saying that they would create 300 new jobs and focused on the savings they would be making by moving suppliers.
Pretty simple at this stage. It seems logical.
However, with three weeks to go before the change, the KFC executives were starting to worry, it seemed like DHL could be ill equipped for this venture, so much so, it almost seemed as if they were winging it.
Bidvest had previously run their operation from six warehouses and DHL were trying to bring this down to one. Not a bad ideal in itself, but given the scale of the operation it is an ambitious approach and they clearly hadn’t got things right in regards to the bricks and mortar and the technology system they were using.
A caller into LBC (a delivery driver of the fabled chicken) reported that instead of taking one hour to drop off their chicken, it was taking up to nine. This had resulted in a huge lorry tailback. Not surprising given the supposed fact that DHL hadn’t even finished the building.
It gets worse. They hadn’t even registered the hub with the local council and as such risked being ordered to cease all operations.
Unsurprisingly they had also been warned by GMB that this was extremely high risk and had decided to ignore their advice. Even the knowledge that Burger King had tried something similar and within six months had returned to Bidvest, cap in hand, didn’t put them off.
Although it’s pretty clear that DHL have struggled here, ultimately the responsibility is with KFC. It was their decision to change their suppliers. It’s a good example of the complexities of procurement. Many people would assume life is a numbers game in regards to managing a supply chain, what is the cheapest option?
The reality is far more complicated. Initial cost is only one aspect of any decision and often not a big part. We touched on this in relation to Carillion.
Anyway, it’ll be interesting to see if KFC stick to this seemingly feather brained idea or perhaps they are already hatching a plan to return to Bidvest.
Winging it rarely pays off.
Update (08/03/18): https://www.theguardian.com/business/2018/mar/08/kfc-returns-to-original-supplier-after-chicken-shortage-fiasco – KFC did return to the experts, Bidvest.