Supply Chain Management

Supply Chain Management

Case Report

Kentucky Fried Chicken (KFC)

Submitted to: Sir Munawar Ahmed

Group Members:

Areej Iftikhar

Javeria Malik

Maria Malik

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Contents
KFC Pakistan.............................................................................................................................................4
Objectives of KFC Pakistan..................................................................................................................4
Decision phase of KFC..........................................................................................................................4
KFC Supply Chain....................................................................................................................................4
KFC upstream.......................................................................................................................................5
KFC downstream...................................................................................................................................5
KFC supply chain strategy or design...................................................................................................6
KFC Supply chain planning.................................................................................................................6
KFC Supply Chain operations..............................................................................................................6
KFC process view of supply chain........................................................................................................7
Supply chain strategy of KFC...............................................................................................................7
Supply chain efficiency of KFC............................................................................................................7
KFC supply chain management impact on strategic thinking...........................................................7
KFC supply chain road map.................................................................................................................8
KFC logistics in supply chain management.........................................................................................8
KFC push/pull view of supply chain processes........................................................................................9
KFC push/pull view of supply chain....................................................................................................9
KFC competitive strategy and chain strategies.......................................................................................9
KFC Products..........................................................................................................................................10
KFC Product Development strategy..................................................................................................10
KFC product life cycle........................................................................................................................11
KFC multiple products and customer segments...............................................................................11
KFC product design............................................................................................................................12
KFC achieving strategy fit......................................................................................................................12
KFC different scopes of strategic fit across supply chain.................................................................12
KFC expanding strategic scope..........................................................................................................13
KFC demand uncertainty.......................................................................................................................13
KFC implied demand uncertainty......................................................................................................13
KFC challenges........................................................................................................................................14

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Warehousing............................................................................................................................................14
Procurement............................................................................................................................................14
Chicken.................................................................................................................................................15
Sauces...................................................................................................................................................15
Spices and Herbs..................................................................................................................................15
Bread....................................................................................................................................................15
Packing material..................................................................................................................................16
French fries..........................................................................................................................................16
Other miscellaneous items..................................................................................................................16
Storage and inventory management.......................................................................................................16
Chicken.................................................................................................................................................16
Spices and herbs..................................................................................................................................17
Sauces...................................................................................................................................................17
Buns......................................................................................................................................................17
KFC Role of distribution in supply chain..............................................................................................17
KFC factors influencing distribution network design......................................................................18
KFC designing distribution channels.................................................................................................18
KFC design options for a distribution network.................................................................................18
KFC online sales and its distribution network..................................................................................19
KFC distribution network in practice................................................................................................19
KFC world class network....................................................................................................................19
KFC Lean Production.............................................................................................................................19
KFC perfect first time quality lean production.................................................................................20
KFC flexible production system.........................................................................................................20
KFC Agile Manufacturing......................................................................................................................20
KFC features of agile manufacturing.................................................................................................20
KFC internal relationship.......................................................................................................................21
KFC external relationship..................................................................................................................21
KFC objectives of marketing..................................................................................................................21
KFC objectives in production operations..........................................................................................22

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Gist of KFC Pakistan..............................................................................................................................22

Main theme of KFC.................................................................................................................................22
Reasons of success/failure of KFC..........................................................................................................22

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KFC Pakistan
KFC Pakistan is a subsidiary of the world-renowned Kentucky Fried Chicken restaurant chain. It
is the first international fast food franchise in Pakistan, having opened its first outlet in Lahore in
1997. Since then, KFC has expanded rapidly to become the largest quick-service restaurant chain
in the country, with over 130 outlets in 20 cities. KFC offers a variety of menu including
chicken, burger, wraps, salads, desserts and drinks. The restaurant chain is renowned for its
signature fried chicken, which is cooked with a unique blend of 11 herbs and spices. KFC also
offers variety of promotions and discounts to reward its loyal customers.

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Objectives of KFC Pakistan

KFC primary objectives are to provide quality food products at an affordable price to their
customers, enhance customer satisfaction through consistent product quality and service
delivery, support local poultry farmers through the procurement of fresh poultry, and support
environmental sustainability initiatives through sound waste management practices.
Additionally, KFC seeks to establish brand loyalty and a competitive edge by offering unique
value-added services such as drive-through, home delivery, and in-store promotions.

Decision phase of KFC

At the decision phase, KFC would need to carefully weigh all the options and decide which
strategy would best support its objectives of sustainable and profit growth. Specific decisions to
be made include:

1. What type of products to offer and what competitive prices to set?

2. Which marketing channels to utilize and how to reach customers?
3. What customer experience to create with the products and services?
4. What marketing and promotional activities to invest in?
5. What operational and logistics strategies to utilize for successful delivery?
6. How to manage risk and ensure compliance with regulatory standards?

KFC Supply Chain

KFC supply chain begins with farmers and growers who supply the restaurant with fresh
ingredients. The ingredients are then processed by the suppliers and eventually sent to the KFC
store. From there, the ingredients are prepared and ready for sale to customers. KFC’s logistics
team also ensures that the delivery of the restaurant’s products is on-time and in compliance with
food safety standards. They constantly monitor the quality of ingredients and carefully track each
step in the supply chain. KFC also takes into consideration local laws and regulations when
setting up the supply chain for their stores.

KFC upstream
KFC upstream supply chain involves procuring raw materials from various vendors, such as
fresh chicken, flour, spices and other ingredients. The raw materials are then stored in a
warehouse before being processed in the production area. The production area includes a number
of steps, such as the marination of chicken, the preparation of sauces and other ingredients, and
the frying chicken. The finished products are then packaged and transported to KFC outlets for
sale

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KFC downstream
KFC downstream supply chain involves managing vendor relationships, customer delivery,
distribution, store operations, customer service and customer feedback.

 Vendor Relationships: KFC works with reliable suppliers to source ingredients such as
chicken, flour, spices, oils and other items necessary for the business. The supplier is
tracked for quality assurance and the products supplied are inspected for quality, quantity
and shelf life.
 Customer Delivery: Customer orders are delivered to their homes, taking into account the
timeline, physical distance, and customer experience. KFC has an extensive network
dedicated for customer delivery.
 Distribution: KFC distribution networks consists of warehouses and store outlets across
the country that are managed by KFC. They also use third-party logistics providers to
move from one location to another.
 Store Operations: Store managers manage customer flow, take customer orders, maintain
customer service standards, and ensure product quality and freshness. They are
responsible for managing the store operations, including inventory management,
preparing orders, and handling customer queries.
 Customer service: KFC ensures a satisfactory customer experience with friendly staff,
quick responses to customer queries and timely delivery of food items to customers.
 Customer Feedback: KFC uses customer feedback to improve its services, menu items
and customer experience. Customers can easily provide their feedback through online
surveys and website feedback forms.

KFC supply chain strategy or design

KFC supply chain strategy or design involves five elements:

- Logistics: KFC has dedicated logistics department that is responsible for efficient
management of order placement, delivery, and inventory management. This department
uses a variety of transportation providers and distributors in order to ensure the delivery
of quality ingredients to all of KFC stores.
- Manufacturing: KFC operates its own manufacturing facilities in order to ensure that the
high-quality standards of the franchise are met. These facilities are responsible for
producing KFC’s signature such as chicken, fries, and other fast food items.
- Distribution: KFC also has a dedicated distribution team that oversees the delivery of
their products to KFC stores. The team uses a variety of distribution channels such as
traditional wholesalers, online delivery and courier services.
- Quality Control: KFC has a comprehensive Quality Control system in place to ensure that
their products maintain the highest standards. This includes regular inspections as well as

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in-process and end product checks to ensure that subpar or contaminated ingredients are
used.
- Customer Service: KFC has a dedicated customer service team that handles customer
complaints and inquiries in a timely manner. The team is available 24/7 so that any
customer issues can be addressed as quickly as possible.

KFC Supply chain planning

KFC is committed to ensuring that its supply chain planning model is optimized to provide a
consistent and high-quality experience for customers. To achieve this goal, KFC works with
suppliers to ensure that all critical ingredients used in making its signature recipes are sourced in-
country with the freshest and highest quality of ingredients. Furthermore, the company has
implemented a strict Quality Control program to ensure only fresh, safe and consistent products
are served to customers. As part of its supply chain planning efforts, KFC actively monitors and
evaluates its supplier’s processes and products. Additionally, KFC works to improve its
warehousing and distribution logistics to ensure timely and accurate delivery of products. The
company has implements a zero tolerance policy for food safety in production and warehouses.

KFC Supply Chain operations

KFC operates a comprehensive supply chain operation to ensure fresh and quality food
ingredients are sourced and delivered to restaurants on a timely and efficient basis. The chain of
operation starts with procurement of raw materials from local and international suppliers. The
quality, availability and price of raw materials and other food items are checked and evaluated by
their quality assurance team. Once approved, the items are received at the warehouses located in
multiple cities throughout Pakistan. The delivery trucks, which are equipped with real-time
tracking devices, transport the items to the local KFC restaurants. These restaurants store the
food ingredients in compliance with food safety standards and utilize the items for preparing
freshly cooked meals and snacks. KFC also employs a team of quality assurance experts who
conduct frequent inspections of the restaurants and their supply chain operations in order to
ensure food safety and quality.

KFC process view of supply chain

The supply chain process of KFC in Pakistan entails the following steps:

1. KFC purchases raw ingredients such as chicken, flour and vegetables from suppliers.
2. The ingredients are then transported to KFC’s processing plant and processed.
3. The processed ingredients are packaged and sent to distribution centers.
4. From the distribution centers, the packaged ingredients are sent to KFC restaurants
throughout the country
5. At the KFC restaurants, the packaged ingredients are used to prepare food items.
6. Finally, the prepared food items are served to the customers.
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Supply chain strategy of KFC

KFC supply chain strategy focuses on providing customers with high-quality products, delivered
quickly and efficiently. The company has implemented a ‘lean’ supply chain management
system which ensures that all materials and ingredients in the most efficient way possible. The
company also works closely with its suppliers to ensure timely delivery of products and
ingredients. KFC has also implemented a Just-in-Time system which ensures that all materials
and ingredients are delivered on time and in the right quantities. Additionally, the company has
implemented a quality control system that ensures all products meet the highest quality
standards.

Supply chain efficiency of KFC

KFC has implemented several supply chain efficiency measured in order to reduce costs and
optimize operations. The company has invested heavily in IT infrastructure, software, and other
technologies to ensure a secure and efficient supply chain that meets customer requirements.
KFC has also adopted inventory control systems, improved cold supply chain management
systems, and implemented barcode systems to track materials and products. The company has
also established uniform procedures, guidelines, and training among vendors, suppliers and
distributors to ensure efficient and high quality supply chain management. These efficiency
measures have enabled KFC to provide better quality, fresh food products to customers in an
efficient manner.

KFC supply chain management impact on strategic thinking

KFC supply chain management has had a tremendous and positive impact on strategic thinking.
By leveraging technology and streamlining processes, KFC has been able to improve their
operations and better serve their customers. This include improving the efficiency of their supply
chain, which has resulted in faster deliveries, better quality control, and increased cost savings.
Additionally, KFC has improved their demand forecasting capabilities, enabling them to better
plan for future production and orders. By using modern supply chain management techniques,
KFC is able to optimize their operations and provide higher quality products in order to gain a
competitive edge in the market.

KFC supply chain road map

1. Define the Problem: KFC needs to develop a supply chain road map to ensure an
efficient, effective and sustainable food supply chain that targets both consumer and
customer satisfaction.
2. Gather Requirements: KFC will need to determine their target markets, customer
demands, consumer preferences, production/delivery capacities, equipment/supply
inventory, cost objectives, safety standards, and other related requirements.

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3. Develop Supply Chain Strategy: KFC will need to address the issues identifies in Step 2
and develop a strategic plan that meets it needs. This will include developing an efficient,
cost-effective supply chain network, establishing long-term objectives.
4. Design a Supply Chain Road Map: KFC will need to create a well-structured road map in
order to effectively execute their supply chain strategy. This includes mapping out routes,
setting milestones and checkpoints, and outlining processes and procedures.
5. Implement the Plan: KFC will need to put their plan into action, adjusting it to meet the
needs of their customers, consumers and other stakeholders. This includes executing the
strategies, launching the plan and monitoring progress to ensure its successful
implementation.
6. Review and Refine: KFC needs to continuously evaluate the performance of their supply
chain in order to discover any potential areas for improvement. This includes tracking
goals, regularly assessing customer feedback and making necessary adjustments to their
road map.

KFC logistics in supply chain management

KFC is committed to ensure efficient logistics in it supply chain management in order to ensure
timely delivery of its products to its customers. This involves the use of an efficient
transportation network, warehousing and inventory management system. KFC has invested
heavily in its logistics; this ensures quick delivery of fresh and high-quality products. Several
suppliers are engaged in order to ensure the timely delivery of all the necessary ingredients for
KFC. The company keeps a close watch on the quality control of all its products and maintains
strict standards or its suppliers. It works in close association with the suppliers to ensure that
their storage, handling, and transportation of the products meets the quality and safety standards.
KFC has also invested in IT systems to further streamline and optimize its supply chain
management operations. This includes Warehouse Management systems which helps to better
manage the inventory and prevents any wastage. Overall, KFC has invested heavily in its
logistics operations to ensure a smooth and efficient supply chain and deliver fresh and quality
products at competitive prices.

KFC push/pull view of supply chain processes

KFC push/pull view of supply chain

The KFC supply chain processes can be viewed from both a push and a pull perspective. In a
push view, the supply chain focuses on responding to the demand forecasts that come from
customer orders, market trends, and projections. KFC will often plan and schedule production

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level to meet these anticipated needs, then use their resources and processes to move the product
from the manufacturing facility to the customer.

In a pull view, the supply chain focuses on responding to the actual customer demand. KFC will
often monitor customer orders, feedback, and sales trends to adjust their production schedule
accordingly in order to meet customer needs. KFC will then use their resources and processes to
move the product from the manufacturing facility to the customer.

KFC competitive strategy and chain strategies

KFC competitive strategy is centered on providing quality food at a great value. To remain
competitive in the Pakistan market, KFC utilizes a multi-pronged approach.

1. Menu innovation: KFC has embraced menu innovation with the introduction of new
menu items and flavors. This allows KFC to keep up with changing tastes and to remain
relevant to the Pakistani consumer.
2. Customer Service: KFC prides itself on providing excellent customer service. This
include offering speedy service, maintaining clean and well organized restaurants, and
providing customers with quality products.
3. Store Expansion: KFC has expanded its footprint within Pakistan by opening new
locations to meet customer demand.
4. Marketing: KFC utilizes a range of marketing initiatives such as television and print
campaigns and in-store promotions.
5. Supply chain management: KFC has established a reliable and efficient supply chain to
ensure that quality products are delivered in a timely manner.
6. Technology: KFC uses technology to streamline experience and enhance customer
experience. This includes self-service ordering kiosks, mobile ordering, and online
ordering.

KFC Products

KFC offers a variety of chicken dishes including buckets, sandwiches, wraps, burgers, salad and
desserts. Popular KFC items include:

 Zinger Burger
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 Zinger Strips
 Hot Wings
 Crispy Strips
 Fried Chicken
 Rice Bowls
 Fries
 KFC twister
 Krushers
 Fried chicken
 Hot wings
 Kid’s combo
 Box meals

KFC Product Development strategy

KFC product development strategy involves introducing new products that are both innovative
and tailored to the taste and preferences of local customers. The strategy also involves
continually expanding their product range to provide more variety and interesting options.
Additionally, KFC focuses on creating promotions and discounts to drive sales. To ensure
customer satisfaction, KFC regularly evaluate customer feedback and takes necessary measure to
improve the taste, quality and freshness of the food they serve. Finally, KFC also focuses on
delivering quality customer experience through excellent service and friendly staff.

KFC product life cycle

1. Introduction: KFC was launched in 1997 when it its first store in Karachi. Since then, the
product has grown steadily in popularity and the company has opened several stores in
the country.
2. Growth: The Company experienced rapid growth over the early years, as its products
gained significant market acceptance and success. The brand became a household name,
with its products being recognized as the most preferred ones in the market.
3. Maturity: With years of growth, the product life cycle of KFC in Pakistan reached to
maturity stage. During this phase, the company has focused on sustaining their brand
image and market success by adding more outlets, menus and introducing new products.
4. Decline: The decline phase of KFC Pakistan can be seen due to the emergence of newer
fast food restaurants such as McDonald’s and Burger King. These brands have gained a
lot of popularity in recent years, resulting in a reduction of KFC stores in the market.
5. Revitalization: Despite the decline phase, KFC has been able to revive its supreme
popularity in the market. Through successful marketing campaigns, product innovations
and digital presence, the brand is once again popular among customers.

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KFC multiple products and customer segments

Products:

- Fried chicken
- Burgers and Wraps
- Rice Bowls
- Sandwiches and Salads
- Beverages
- Desserts
- Kids Meals
- Value Meals

Customer segments:

- Families
- Young professionals
- Students
- Tourists
- Official workers

KFC product design

KFC is committed to providing customers with food products of quality, variety and value that
meet their needs. In order to meet this, the core product design criteria’s are outlined in detail
below:

1. Taste: The taste of KFC in Pakistan should retain the renowned flavor profiles that have
made KFC one of the most popular fast food chains in the world.
2. Ingredients: All ingredients used in KFC food will be either locally sourced or imported
in other foster long term healthy and sustainable supply chain.
3. Pricing: All KFC will be competitively priced to ensure maximum affordability and value
for money.
4. Packaging: The packaging of KFC products will be eye catching and designed with
reference to customer culture in Pakistan to maximize appeal.
5. Innovation: KFC continuously look to innovate in terms of taste, ingredients and
presentation of products in order to drive continuous customer advocacy.

KFC achieving strategy fit

KFC strategy should focus on achieving fit with the local market conditions. The company
should look to tailor their services and offerings to meet the demands of the local population
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such as offering halal food options, utilizing local ingredients, and establishing relationships with
local suppliers and distributors. Additionally, the company should focus on developing and
cultivating localized marketing, advertising, and promotional initiatives to best reach and engage
their target audience. The company should also strive to increase their efficiency and value
creation in order to offer their products at the most competitive prices. Furthermore, KFC should
consider social responsibility projects that contribute to the local community, helping to foster
support and brand loyalty. Finally, the company should consider taking advantage of digital
technologies to better reach consumers and build a stronger presence in the local market.

KFC different scopes of strategic fit across supply chain

1. Quality Management: KFC can optimize its supply chain by ensuring that all suppliers
provide high-quality raw materials, components and services to the business. Quality
management strategies should include standards for supplier selection and evalution,
strategies for monitoring and ensuring quality and corrective action plans for any issues
that arise with suppliers.
2. Cost reduction: KFC can improve its supply chain performance by reducing costs. It can
do this by efficiently managing multiple supply chains, purchasing in bulk from
suppliers, increasing the efficiency of its transportation and logistics systems, and
optimizing its supplier relationships.
3. Risk Management: KFC can optimize its supply chain risk management by making sure
that appropriate mitigation techniques are in place to manage potential risks such as
natural disaster, supply scarcity, supply chain disruption, and contractual disputes.
4. Talent Management: KFC can improve its supply chain performance by hiring, training
and managing by hiring, training and managing the right talent. This includes sourcing
and recruiting supply chain staff, creating an environment that supports employee
engagement and ownership of the supply chain.
5. Sustainability: KFC can optimize its supply chain sustainability by developing
environmental and social policies and practices, implementing green supply chain
programs, and working with suppliers to increase the use of sustainable materials and
processes.

KFC expanding strategic scope

KFC is expanding its strategic scope and aiming to become an integrated franchise model across
the country. The company is exploring new opportunities and taking necessary steps to build a
strong presence in the area. To this end, the company is expanding its operations to new cities,
targeting a wider network of customers, diversifying its product and services portfolio, and
launching new product lines that appeal to a wider audience. Additionally, KFC is actively
engaging in digital marketing initiatives to reach a larger customer base. KFC is also investing in
modernization initiatives across its restaurants, to ensure a more efficient and secure customer

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experience. All these expansions and initiatives are helping the company to establish itself as an
integrated franchise in the country, and setting it apart from the other fast food outlets in the
market.

KFC demand uncertainty

The demand for KFC products in Pakistan is likely to experience uncertainty due to the ongoing
political unrest in the country. There have been reports of violence against businesses, resulting
in economic losses to companies that operate within the country. This could lead to a drecrease
in consumer spending. Furthermore, the prices of KFC products may be subject to inflation as a
result of the weakened local currency. It is also likely that the entry of competitor brands could
affect KFC’s sales in the region.

KFC implied demand uncertainty

Given the instability of the security situation in Pakistan, there is an inherent degree of
uncertainty and instability regarding the demand for KFC products in Pakistan. The social and
political environment in Pakistan has shifted drastically in recent years, leading to increased
violence and tension in many parts of the country and uncertainty in terms of consumer behavior
and spending. Additionally, the country’s economy has been in a state of flux, which has further
exacerbated the uncertainty surrounding consumer demand. As a result, the implied demand for
KFC products in Pakistan is uncertain and difficult to accurately predict.

KFC challenges

1. High Competition: KFC faces stiff competition from its direct competitors such as
McDonald’s and Burger King. These firms have well established brand presence and
loyal customer base in the Pakistani market.
2. High prices: KFC’s products are typically more expensive than its competitor’s offerings.
This may be a deterrent for consumers who are looking for an economical meal or snack.
3. Rising Input Prices: KFC’s input cost have been on rise due to inflation. This adds to
KFC’s cost of production and may reduce its profitability.
4. Changing Consumer Preferences: Changing consumer preferences in the Pakistani
foodservice market are a major challenge for KFC. Many consumers are turning away
from fast food and opting for healthier meals.
5. Lack of Brand Awareness: KFC has limited brand awareness among the Pakistan
consumer base. This may make it difficult for the company to gain traction and expand its
operations.

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Warehousing

KFC warehousing is fully integrated logistics system that ensures the safe and efficient
movement of products from the point of production to end-user consumption. They employ the
latest technology and processes to ensure the quality and freshness of their products. They have a
wide network of warehouses which are strategically placed around the country, providing
distribution and storage solutions for different regions. The warehouses are managed by a team
of experienced and skilled professionals who are focused on delivering the highest levels of
customer service. They also have stringent quality and safety control system in place which
ensure the safety and quality of the products they store and distribute.

Procurement

KFC Corporation, a franchise-based restaurant network, is required to obtain all ingredients from
wetted suppliers in order to make sure that the food they serve is of a high quality. They also
require that the suppliers adhere to their strict food safety guidelines. In Pakistan, the main
supplier of KFC products is S.A. Foods. K&N’s is a renowned name in the food industry. They
supply high quality chicken products to KFC restaurants all over the country. To ensure that their
products meet KFC’s quality standards, K&N’s conducts regular inspections and audits of the
farms and hatcheries which produce chickens for the franchise. Other suppliers used by KFC are
Habib Oil Mills, Karachi Meat Company and NSD Corporation. Habib Oil Mills provides oil and
its derivatives to the franchise, while Karachi Meat Company provides a variety of meat
products. Lastly, NSD Corporation provides beverages, condiments and spices. All these
companies are required to adhere to quality standards set by KFC in order to be approved as
suppliers.

Chicken
KFC currently sources chicken mainly from local poultry farms, who supply chicken fresh halal
chicken to their outlets across the country. The farm-raised chicken must meet certain quality
and health standards set by KFC and the Pakistani government. KFC also sometimes imports
chicken and other food items from other countries, such as the United States and Canada.

Sauces
KFC sources its sauces from an international supplier based in the United States. The ingredients
in the various sauces used by KFC are high-grade and are of the same quality as those used in the
US. The sauces used in KFC very according to the region and may include Worcestershire sauce,
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Tabasco sauce, BBQ sauce, honey mustard, and others. KFC also produces its own signature
sauces, such as the KFC hot and spicy and KFC signature sauces.

Spices and Herbs

KFC buys spices and herbs from local and internationals suppliers. Most of the spices and herbs
used by KFC are either purchased locally or imported. Local suppliers provide fresh produce,
while international suppliers supply products such as garlic, cardamom and other herbs. KFC
sources its fresh herbs from reputable local farms, offering the same flavors and quality
customers have come to expect from its products. KFC also works with suppliers who hold a
responsible approach to sourcing, ensuring that the herbs used to make its recipes are of the
highest quality.

Bread
KFC sources buns from a variety of suppliers. The company has specific standards and criteria
must be met before they will accept any supplier into their supply chain. Suppliers must meet the
criteria sustainability and quality of the product provided. Additionally, the supplier must show a
commitment to continuous improvement in all areas of their business processes. KFC also
sources a variety of suppliers to meet the specific needs of their customers. They strive to ensure
that the products they receive are of the highest quality and meet their customer’s expectations.

Packing material
KFC typically procures its packing materials from suppliers who specialize in food packaging
materials like aluminum foil, plastic wraps, paper bags, and cling films. These suppliers are well-
versed with the temperature of the food and also keep the food free from contamination from
external contaminants like dust, dirt and moisture. KFC also requires its packaging materials to
be certified as non-toxic and safe for human consumption.

French fries
KFC typically sources their French fries from local potato suppliers. Most of the potatoes used in
their French fries are sourced from farmers based in the Punjab region. The potatoes are then in
their state-of-the-art processing plant before sent to the restaurants for frying. The potatoes are
prepared using the same oil that KFC uses for all of its fried foods.

Other miscellaneous items

KFC sources a wide range of materials and services for its operations. These items include

 Food ingredients, packaging and consumables

 Janitorial and cleaning supplies
 Kitchen equipment and furniture
 Technology equipment and IT services
 Fuel and energy
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 Uniforms and safety gear

 Pest control services
 Security services
 Advertising and promotional materials
 Printing services
 Office supplies and stationery

Storage and inventory management

Chicken
KFC stores chicken at temperatures below 40 degrees Fahrenheit and follows strict inventory
management procedures. All chicken is labeled and kept in containers or boxes according to its
use. Raw chicken is stored separately from cooked chicken to minimize the possibility of
contamination. The storage areas are cleaned and sanitized routinely. KFC ensures the chicken
quality is monitored routinely. KFC ensures the chicken quality is monitored regularly and
discarded if founded unsatisfactory. All chicken is weighed and dated before it is stored. The
inventory control system also tracks the inventory of raw materials and finished products, which
helps both parties to maintain inventory accuracy.

Spices and herbs

KFC operate a strict storage and inventory management system for all of its spices and herbs. All
incoming bulk herbs and spices are stored in a cool, dry environment and each orders is
subjected to a rigorous quality control process. Stocked items are monitored regularly to ensure
that the batches are fresh and all expiration dates are adhered to. In addition, each batch
undergoes additional testing before the items are released for production, yielding top notch
products and consistent taste. In the event of any faults, the batch is immediately quarantined and
disposed of appropriately.

Sauces
KFC has implemented an automated inventory management system for the tracking, monitoring,
and control of its sauces. This system allows the company to track and monitor inventory in real-
time, set reorder points and reorder quantities, set expiration dates and expiration alarms.
Additionally, it includes functionality to adjust recipes and processes related to sauces, as well as
a detailed cost analysis highlighting both product and ingredient costs.

Buns
KFC is likely to use its own internal storage and inventory management system to store and
manage the buns used in their restaurants. This system typically includes a storage facility, such
as warehouse, where the buns are stored and tracked. The warehouse can be managed by KFC’s
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own employees with the help of a comprehensive inventory which can help store and manage the
distribution of buns from warehouse to the restaurant outlets. This system also helps KFC
monitor the stock levels and ensure that the buns are always available when needed.

KFC Role of distribution in supply chain

Distribution plays a vital role in the supply chain as it is one of the last steps before the product
reaches the customer. The efficiency of the distribution system impacts the customer experience
and affects customer loyalty. In KFC supply chain, distribution includes collecting raw materials
from suppliers and delivering them to the company’s production facility, as well as storing and
delivering the finished product to KFC outlets. In addition, KFC also utilizes a network of third
party distributors that it works with to procure and deliver products to its outlets. Distribution
also involves IT systems such as supply chain management software, tracking capabilities, and
analytics which help the company better understand its supply chain and make decisions about
how to streamline and improve its operations.

KFC factors influencing distribution network design

1. Mode of transport: the mode of transport used will have a direct impact on the efficiency
of the distribution network. Different modes can be used for different kinds of products.
2. Level of capacity utilization: the capacity utilization of the transport system will affect
the speed and capacity of the distribution network.
3. Network topology: Different network topologies can be used, such as hub and spoke, ring
and star configurations, with each having its own advantages and disadvantages.
4. Location of production and distribution facilities: This will determine the cost and
delivery time for the products.
5. Consumer preferences: Consumer’s preferences for time and place of delivery will affect
the design of the network.
6. Economic factors: Cost savings, procurement, and availability of labor and capital have a
direct influence on the distribution network design.
7. Government regulations: Government regulations such as safety and environmental
regulations can affect the design of the distribution network.

KFC designing distribution channels

KFC distribution channels are heavily reliant on its franchisee network for product delivery and
availability. KFC has strategically placed its franchisees, which are locally owned, around the
country so that customers can access their products from stores that have been established in
every major city and town. The franchisees are responsible for the procuring, storage, sales and
delivery of KFC’s products, ensuring that customers have access to the company’s products on a
regular basis. Additionally KFC also has stores in more remote areas, allowing for delivery to
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more rural consumers. The company has also looked to partner with online delivery services,
such as Food Panda, that can reach even more customers at their doorstep.

KFC design options for a distribution network

1. Centralized Distribution Network: This is the most common approach used by KFC to
distribute products and materials throughout Pakistan, where all stocks are stored in a
central facility and profits are shared and accumulated at the center before being
distribution to other locations.
2. Regional Distribution Network: KFC may choose to implement a more localized
approach, by constructing several smaller distribution centers in the more populous areas.
This could help facilitate faster delivery of products and better efficiency by taking the
pressure off of one single location.
3. Franchised Distribution Network: For certain areas, KFC could consider partnering with
local distributors or using third party franchises to help facilitate the delivery of their
products. This approach would be especially beneficial for areas with limited access to
KFC’s corporate retail outlets.
4. Self-Delivery Network: KFC could also establish their own dedicated delivery teams,
allowing them to better manage the quality and safety of the products being delivered to
their customers. This approach would also give them direct contact with the stores and
outlets in the area, allowing for better customer relations.

KFC online sales and its distribution network

KFC has an active online ordering and delivery system. Customers can order and pay online via
the website or mobile app, and then choose either to have their order delivered or pick it up at the
nearest KFC outlet. The delivery service is available in over the 15 cities around the country,
including metropolitan areas. Delivery is free, with delivery times ranging from 45-90 minutes.
KFC also has a network of physical stores located across the country. Customers can visit these
stores and buy their favorite products, such as their signature fried chicken, burgers and other
snacks. KFC also offers catering services for special events and parties, which can be ordered
online.

KFC distribution network in practice

KFC has a nationwide presence with more than 300 stores operational nationwide. The company
has dedicated distribution network which includes three large warehouses and a fleet of over 150
refrigerated trucks, vans, and cars which transport the supplies across the country. KFC also has
a number of vendor partners and small-scale distributors to facilitate supply chain related
activities. The company is also increasingly using third-party logistics for some of its stores.
KFC is serviced through a network a vendors which supply raw materials, paper products and
other food items to its outlets.

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KFC world class network

KFC is part of the world’s largest and most popular quick service restaurant chain, providing a
global network for customers across more than 125 countries. In Pakistan, KFC has an
established network of more than 50+ restaurants located in major cities offering customers
unique and delicious finger-licking chicken experience, highly acclaimed by its customers across
the country.

KFC Lean Production

KFC is currently focused on the use of lean production, which is a system that seeks to eliminate
waste and improve adaption, efficiency and productivity. KFC utilizes the standard 5-S principle,
with continuous improvement and value stream mapping, in order to reduce non-value adding
activities. This approach allows KFC to reduce cost, increase throughout and improve customer
service levels. Additionally, the use of Total Quality Management and ISO certifications helps
KFC to ensure consistency of quality.

KFC perfect first time quality lean production

KFC takes great pride in providing the highest quality and leanest produced products. To ensure
this, the company maintains stringent quality control measures throughout the production
process, from the selection of raw materials to the production and packaging of finished
products. The team at KFC also looks to continually develop and enhance its techniques to
ensure that each and every customer receives a product of the highest quality from the first time
around.

KFC flexible production system

KFC has implemented a flexible production system in order to maximize efficiency and
profitability. The system allows for the production of a wide range of fast food products in the
most cost-effective manner. The system includes the introduction of premium products such as
burgers that require unique processes and ingredients. The flexible production system also
includes staff training and assessment, customized recipes and advanced production and resource
management. This system allows KFC to quickly adapt to changing customer demands and
introduce new menu items while ensuring high quality standards. Additionally, the emphasis on
automation and advanced technology use has resulted in improved operational efficiency and
cost savings.

KFC Agile Manufacturing

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KFC is known for its efficient and agile manufacturing system. The company has developed a
comprehensive process which includes advanced technology, automated production line, flexible
production scheduling, and effective supply chain management. The company has invested
heavily in its manufacturing system to ensure that production runs efficiently and effectively
produces quality products for their customers. Their agile manufacturing system has enabled
them to produce the highest quality products as per the changing customer demand. KFC also
boasts of a stringent quality assurance system which ensures every product meets the customer’s
expectations when delivered.

KFC features of agile manufacturing

The features of agile manufacturing include:

1. Rapid Respond to change: Agile manufacturing is designed for quick and cost effective
change in response to demand variability, market shifts, and customer requirements.
2. Increased flexibility: Agile manufacturing systems are highly flexible and enable
operations to rapidly respond to changing customer demands by adjusting the production
process.
3. Efficient use of resources: Agile manufacturing systems enable the efficient use of
resources, reducing resource consumption while helping to minimize costs.
4. Shortened Lead times: Agile manufacturing helps to shorten lead times, eliminating
unnecessary delays and enabling fast response.
5. Quality and Reliability: Agile manufacturing systems are designed to ensure high quality
and reliability, enabling quick and efficient repairs and maintenance to keep production
running smoothly.

KFC internal relationship

KFC works with a network of trusted suppliers in order to ensure supply chain management
standards are maintained as well as integrity and compliance of food safety and quality. The
network includes reputable suppliers for breading, oils, pre-batter, spices, and sauce ingredients
and poultry products. The poultry suppliers are thoroughly audited and monitored for their
conformance to the KFC supplier code of conduct, ensuring to building long-term relationships
with all its suppliers, where suppliers and KFC have a common goal of delivering quality food to
the consumer.

KFC external relationship

KFC has established a close relationship with its suppliers in order to ensure it is obtaining the
highest quality products possible. KFC has a dedicated procurement team that works closely with
its suppliers to ensure that ingredients are sources ethically, sustainably, and adhere to the
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highest food safety standards. This team is responsible for assessing each supplier through a
rigorous evaluation process to ensure that the quality, cost and consistency of the supplies match
KFC’s exacting specifications. The suppliers also undergo regular audits throughout the year to
make sure all safety standards are being met.

KFC objectives of marketing

1. To build strong customer loyalty and create an emotional connection between KFC and
its customers.
2. To ensure a positive customer experience in all customer touchpoints, ranging from in-
store visits to social media presence.
3. To differentiate KFC offerings in the market, reflecting the brand’s commitment to
innovation and quality of its products.
4. To focus on pricing strategies to ensure that KFC products remain accessible to most
Pakistani consumers.
5. To increase sales and profitability through effective promotions and marketing activities.
6. To proactively manage KFC’s public relations and ensure the brand is positively
portrayed in the media.

KFC objectives in production operations

KFC objectives in production operations are to ensure that customers have access to top quality,
properly prepared fried chicken in each restaurant, serve meals safely and fast, prevent losses due
to spoilage, maximize efficiency throughout the production process, adhere to all safety and
hygiene regulations, and promote customer loyalty. KFC also strives to continuously upgrade the
production process to maintain its efficient production of the highest quality fried chicken and
ensure customer satisfaction.

Gist of KFC Pakistan

KFC supply chain strategy focuses on building partnerships with local producers in order to
secure high-quality ingredients while avoiding food adulteration and food safety issues. A local
presence in the supply chain is essential to ensure the quality of ingredients. Moreover, reducing
the carbon footprint in the supply chain is prioritized to reduce the environmental impact and to
minimize transportation time. KFC has adopted the Just-In-Time inventory system to minimize
the cost of storing ingredients and products. Processing and packaging of KFC products are done
at the local level, and domestic delivery of food is provided at the customer’s doorstep.

Main theme of KFC

The main theme of KFC is “Bring Joy to Mealtimes”. This is reflected in the brand’s
commitment to providing customers with the best quality products and freshly cooked meals that

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bring joy to mealtimes. KFC aims to satisfy its customers with high-end meal solutions
combining products, innovation and convenience to cater to the modern day lifestyle.

Reasons of success/failure of KFC

The reasons for the success of KFC include:

1. Hygienic and Delicious Food: KFC has maintained exceptionally high standards of food
quality, health, and hygiene. This has enabled them to offer delicious food with assurance
of its safety.
2. Reputation and Brand Value: KFC has earned a great reputation and brans value over the
years internationally, and this has certainly worked to their advantage in Pakistan.
3. Ample Stores: To make sure that its products are accessible to the majority of the
population, KFC has opened around 40 outlets in the four provinces, a feat not many
competitors have matched.
4. Expansive Menu: KFC has developed a huge variety of menu items to cater to the unique
Pakistani plate. These items have proven to be very popular, leading to KFC’s success.

The reasons for the failure of KFC include:

1. High Prices: The prices of KFC meals are comparatively high, especially when one
considers the average income levels of the majority of the Pakistani population.
2. Poor Marketing: KFC does not have many marketing campaigns in the country, which
has resulted in fewer people knowing about the restaurant.
3. Low Quality: Despite KFC’s early commitment to quality and hygiene, reports of low
quality food have arisen recently. This has tarnished the image of the brand.
4. Lack of Variety: The lack of variety in the menu has deterred people from trying out KFC
in Pakistan.

Relationship/Effect on Pakistani business/environment of KFC

KFC Pakistan has made a big impact on the Pakistani business environment. The brand’s
presence in the country has created new jobs and has had a direct positive impact on the
country’s economy. The presence of KFC also gives Pakistani business owners and
entrepreneurs more choices, so they can create competitive pricing in the market, which leads to
increased sales and revenue. Additionally, KFC’s presence has also helped to open up more
options for Pakistani consumers, offering them more options and better quality products that they
can enjoy. All in all, KFC has had a profound and positive effect on the Pakistani business
environment.

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Supply Chain management strategy followed by KFC or should

followed

KFC follows a supply chain strategy that is focused on creating a sustainable and cost-effective
operations framework. They aim to optimize their operations and use the most efficient systems
and processes to ensure the effective delivery of their products. This strategy involves
developing a comprehensive database and supply chain network that allows KFC to track and
monitor their inventory, gain visibility into sales & performance, as well as ensure the timely
delivery of product to their restaurants. Other key elements that are part of this strategy include
working with trusted suppliers & distributors and developing a logistics system to ensure timely
deliveries along with a strong customer service approach. The goal is to create a cost effective,
efficient and reliable network that allows KFC to have full control over their operations.

Conclusion/Recommendation for KFC

The recommendation for KFC Pakistan is to continue focusing on their core target market, which
is comprised of young adults and families. They should continue to offer food products that cater
to the needs and preferences of their core audience. Additionally, they should continue to focus
on building their digital presence to not only make ordering more convenient for their customers,
but also engage customers through digital marketing. To further optimize their reach and
customer engagement, KFC Pakistan should focus on expanding their delivery services
throughout the country. Lastly, KFC Pakistan should also explore adding healthier food items to
their menu to provide customers with more nutritious and tasty options.

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