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Kentucky Fried Chicken (KFC) is a chain of restaurants that provide fast food in the form of fried chicken. It is the largest firm in the world in this specialty (fried chicken) and has had its headquarters in Louisville, Kentucky in the United States since 1952. It boasts of over 17,000 outlets located in 105 countries. Much respect is given to the founder, Colonel Harland Sanders, who begun the business as a small restaurant and has seen it grow to the second largest chain of restaurants after McDonald’s. The company has been run by a series of corporate owners who have ensured its continued growth after the death of Colonel. The primary food served by KFC is pieces of fried chicken and its variations such as burgers and wraps. Soft drinks, fries and potato wedgies, are among the common delicacies served at the food stores. This paper will explore the supply chain of KFC and identify potential problems encountered by the organization with reference to the components of chain (Shetty, 2010).
The supply chain refers to an organized system of communication that is used to deliver products or services from the supplier to the consumer. It is a network of companies with the aim of designing, producing and delivering goods and services to consumers. The supply chain has 6 basic components. They include customer, planning, purchasing, inventory, production and transportation (Chopra & Meindl, 2004).
This is the main component that starts off the supply chain. The demand of the customer is met by the supplier and orders made go through a process before they are delivered to the consumer. At KFC, the customer makes an order of the food that they need, the amount and the date of delivery for orders made in advance. The sales department then foresees the commencing of the order depending on the specifications of the consumer. The order is then delivered to the consumer, and this demand triggers more processes related to the chain supply (Murray, 2012).
The orders made by the customer are combined, and a production plan is created. The aim of the plan is to ensure that the needs of consumers are met, and orders are delivered in good time. At KFC, the orders made are processed according to the specifications. For example, if the customer needs a chicken burger, the request is made to the department concerned, and the burger is made according to the specifications of the consumer. The products have been previously stocked; therefore, the approximate amounts of burgers needed in the restaurant are estimated using this element of the supply chain. The stocking made is estimated by the demands of the consumer so as to keep the supply steady and minimize on waste (Murray, 2012).
The purchasing department receives the list of raw materials and services required by the consumer. This department then sends these orders to the suppliers to make the deliveries of according to the request made. At KFC, the raw materials are received from various suppliers depending on the demand. These raw materials are stored at KFC’s two warehouse; the nor-mal storage and the cold-storage. They have been previously purchased and stocked, and they are prepared upon the request of the consumers. All the branches have a common supplier who stocks the restaurants on a regular basis (Murray, 2012).
After the request has been made by the purchasing department, the products are received from suppliers, and the quality is checked. The accuracy is also confirmed to ensure that the correct amounts and specifications are met. The supplier has a role of giving a detailed record of purchases and then sending the invoice to the company for items that they have delivered. The product is then stored at the warehouse until needed. KFC‘s warehouses are fully stocked and replenished occasionally to maintain a steady supply of food in the company. Foods stored include vegetables, chicken, soft drinks and spices. A detailed record of the transactions made is filed and accounted for by the finance department. This helps to keep a record of the purchases made and helps in profit or loss analysis (Murray, 2012).
The production plan of each company varies. Some companies purchase raw products and process them then later deliver them to the consumers, whereas others purchase finished products and provide them when demanded. At KFC, the production entails marinating the chicken and storing it. The chicken is then taken and processed according to the specifications of the customer. The customers demand what they need, for example, a person would want his/her chicken wet instead of dry fried. Storing the raw materials makes the production process faster and more efficient than purchasing them every time (Hamid, 2012).
The finished products are temporarily stored at the warehouse before shipping is done. It is the responsibility of the shipping department to determine the most effective means of ensuring the goods and services reach the consumer in time. They set a date and ensure that they receive an invoice for the goods which have been delivered. At KFC, the restaurants are replenished about three times a week upon the request of the branch manager. The branch manager receives the food from the warehouse and gives a delivery report to the purchases department. The manager also keeps a record of all the invoices received (Hamid, 2012).
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Potential Problems and Solutions
Management of the supply chain is not a smooth process. It comes with its challenges and any organization must be ready to amend any shortcomings to ensure effective business operations. There are possible problems that can be encountered from each stage of the process. For example, the customers’ demand for food may be seasonal, failure to note the changes in the consumer patterns may make the company encounter losses which could be avoided. At KFC, the management is keen to take the statistics of the customer turn out on a regular basis and make comparisons aimed at determining the demand. For example, KFC discovered that most people come to the joints during the weekend and thus the supply of food is increased at such periods (Hamid, 2012).
The purchasing department may delay sending the orders to the finance department. The slowdown in the process results to delays in the general process. Speed and efficiency is emphasized to minimize regular occurrence of such delays at KFC. The staff employed is efficient and effective at performing the tasks assigned to them by the firm (Hamid, 2012).
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The suppliers may also fail to provide the goods and services needed in time. Such suppliers disrupt the supply chain making the company lose its credibility and some lose their clients. The aim at KFC is to have a steady supply of food in the restaurant at all times. This is achieved through having a constant supply of food from credible suppliers who are reliable. KFC is loyal to its suppliers, and this makes the suppliers provide a steady flow of goods depending on need. The suppliers tend to know the purchasing pattern of the company and thus ensure a steady supply at all times (SCC, 2012).
Common calculations errors can be made in the inventory and, as a result, affect the figures at the accounting department. This error may cause serious miscalculations that give a false illusion of the financial status of the company. KFC aims at improving the record keeping at the company thus the emphasis on record keeping. The invoices are kept, and the prices compared to ensure that they tally. In this manner, mistakes can be easily detected and solved (SCC, 2012).
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At the production level, situations such as the breakdown of a machine may cripple the activities of the company. The machines at KFC are regularly checked and serviced to ensure that they are in perfect condition at all times. Any problems detected are solved immediately. This aids in the smooth running of the company at all times and helps to minimize loss (SCC, 2012).
Transportation of goods and services is a vital component in the supply chain. The breakdown of the means used from transport such as ships and vehicles may cause significant delays in the process. Bad weather such as fog and storms can also slow down the transportation process. To beat this, KFC stocks its warehouses in time and only makes new requests once the stock has been depleted. Current stock is used for some time as they await the arrival of the latest stock (SCC, 2012).
The supply chain is a hugely valuable component in any organization since it ensures that goods are obtained from suppliers and delivered to the final consumers. The supply chain has 6 key components which include; customers, purchasing, inventory, production, planning and production. An efficient supply chain guarantees good results to the company. Failure at one stage of the process disrupts the entire chain. KFC is one of the leading food chains that aim at providing its consumers with the best products and services to maintain its status globally. It concentrates to ensure that it is effective and the results produced are satisfactory on the supply chain. The staff employed is efficient and effective at the duties assigned to them. The supply chain is an essential element in any organization, and it should be efficient.