Crisis-hit KFC admitted plans to transform supply chain were “ambitious” three months ago

KFC’s UK restaurant estate was today getting back to normal – as it emerged that the company’s supply chain chief promised the chain would deliver a level of service that “has never been done before” when the deal with DHL was signed.

Delivery issues following a switch in logistics partner from Bidfood to DHL led to a chicken shortage that saw hundreds of KFC stores temporarily close or serve limited menus last week. Reports suggested the mix-up cost the business more than £1m a day.

KFC has apologised for the crisis, even taking out full-page advertisements in national newspapers last week, but a media announcement confirming the changes back in November 2017 reveals that even back then it described the plans to transform its supply chain as “ambitious”.

Calling the appointment of DHL and QSL to manage the supply and distribution of food products, packaging and consumables for 850 restaurants a “groundbreaking move”, the press release claimed that DHL would “re-write the rule book and set a new benchmark for delivering fresh products to KFC in a sustainable way”.

DHL was taken on to manage all of the physical warehouse and distribution capabilities for KFC, while IT firm QSL, which has worked with the chain in Europe since 2011, provides the expertise in terms of demand planning and stock management. QSL is also managing operational purchasing for KFC as well as accounting for its operations.

According to the details, key areas of focus include reducing logistics-related emissions to net zero over the life of the contract, optimised delivery scheduling to provide a faster turnaround of orders and greater integrity of food during transportation allowing for even fresher products upon arrival in KFC restaurants.

The media release quotes Jens Hentschel, supply chain director for KFC, as saying: “To date there has been little variation in foodservice logistics but we have specifically chosen DHL and QSL for their reputation for innovation in logistics across other industries. Our mission is to deliver outstanding products to our consumers in all we do and the supply chain plays a fundamental part in this.

“We are rethinking all of our internal and external processes, and placing distribution and logistics at the heart of our new supply chain strategy. We want to deliver a new level of service to our restaurants and franchise partners, improve the quality of service to our customers and reduce our environmental impact – all to a level that has never been done before. It’s an ambitious plan, but by working closely with our partners DHL and QSL we’re confident that we’ll be able to deliver against our strategic ambitions.”

In the same announcement, John Boulter, managing director of retail for DHL supply chain UK & Ireland, added: “We intend to re-write the rule book and create a stock management, distribution and reverse logistics model based on best practice from a range of sectors including foodservice logistics. This model will support KFC in its ambition to be market-leading in all that it does, while improving service levels to its restaurants and customers.”

MAIN PIC: Mel Brockhouse, vice-president grocery & convenience, DHL Supply Chain UK & Ireland; Jens Hentschel, director supply chain KFC UK & Ireland; and Oliver Jäger, country manager of QSL.

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