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.......................................................................................................................................3
KFC mission statement.........................................................................................................................3
Objective of KFC...................................................................................................................................3
Values of KFC........................................................................................................................................3
Core competency...................................................................................................................................4
Products of KFC........................................................................................................................................4
Franchise Locations...................................................................................................................................4
Organization Structure.............................................................................................................................5
KFC Supply Chain....................................................................................................................................5
Warehousing..............................................................................................................................................6
Procurement..............................................................................................................................................7
Chicken...................................................................................................................................................7
Sauces.....................................................................................................................................................7
Spices and Herbs....................................................................................................................................7
Bread......................................................................................................................................................7
Packing material....................................................................................................................................8
French fries............................................................................................................................................8
Other miscellaneous items....................................................................................................................8
Storage and inventory management.........................................................................................................8
Chicken...................................................................................................................................................8
Spices and herbs....................................................................................................................................9
Sauces.....................................................................................................................................................9
Buns........................................................................................................................................................9
Zonal Distribution.....................................................................................................................................9
Dimensions...........................................................................................................................................10
Quality Assurance...................................................................................................................................10
Software...................................................................................................................................................11

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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 Pakistan offers a variety of menu
including chicken, burgers, 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
Pakistan also offers variety of promotions and discounts to reward its loyal customers.

KFC mission statement

KFC’s mission is to serve the people of Pakistan high quality, delicious and nutritious food with
a commitment to excellent customer service in a clean, safe and welcoming environment. They
are dedicated to helping their customers achieve a balanced and healthy lifestyle through their
commitment to food safety and quality.

Objective of KFC
Following are the objectives of KFC are as under:

1. To provide fresh, quality and affordable fast food to customers in Pakistan.

2. To maintain high standards of customer service and create a pleasant dining experience.
3. To build loyalty and trust among customers through excellent product quality and
customer service.
4. To build strong relationships with suppliers and business partners in order to ensure a
steady supply of fresh ingredients and other operational necessities.
5. To establish KFC as a leader in the fast food industry in Pakistan.
6. To continuously innovate and introduce new menu items to keep customers interested
and engaged.
7. To maintain a safe and healthy working environment for employees.
8. To promote and support local communities in Pakistan.

Values of KFC

1. Respect: Respect for customers and each other is at the core of everything we do.
2. Integrity: KFC act with integrity and uphold the highest standards of business conduct.
3. Quality: KFC strive to provide the highest quality of food, service, and experience to
customers.

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4. Inclusivity: KFC believe in creating an inclusive and welcoming environment for

everyone.
5. Teamwork: KFC are stronger together and rely on collaboration and team spirit to
achieve success.
6. Innovation: KFC look for innovative solutions to continuously improve our products,
services and processes.
7. Responsibility: KFC take responsibility for their actions and strive to be mindful of our
impact on the environment.

Core competency
KFC Pakistan’s core competency lies in its ability to provide high-quality, quick-service fried
chicken. The company has developed a unique blend of 11 herbs and spices that contribute to the
distinctive flavor of its chicken. Moreover, KFC Pakistan has perfected a unique cooking and
preparation process which allows them to serve up fresh, hot and crispy chicken in a matter of
minutes. The core competency has enabled KFC Pakistan to become a market leader in the quick
service restaurant industry in Pakistan.

Products of KFC

KFC offers a variety of menu items, including the following:

- Fried chicken
- Wraps
- Salads
- Beverages
- Zinger burger
- Fries
- Hot wings
- Kid’s combo
- Box meals
- Rice bowls

Franchise Locations

KFC operates locations in more than 20 cities across Pakistan, including Karachi, Lahore,
Islamabad, Peshawar, Multan, Faisalabad, Sialkot, Quetta, Hyderabad, Abbottabad, Rawalpindi,
and Bahawalpur.
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Organization Structure

KFC Pakistan is managed by a team of experienced professionals, headed by CEO. The company
is structured into several departments, including Operations, Human Resources, Finance,
Marketing, Supply Chain, and Information Technology. Each department is responsible for
different aspects of the company’s operations.

The Operation Department is responsible for the day-to-day running of the business, including
setting menus, ordering supplies and managing staff.

The Human Resource Department is responsible for recruiting, training and managing KFC
employees

The Finance Department is responsible for the financial operations of the company, including
budgeting, accounting and financial planning.

The Marketing Department is responsible for creating and executing marketing campaigns,
developing promotional materials and designing advertising campaigns.

The Supply Chain Department is responsible for managing inventory, sourcing supplies, and
ensuring that the quality of KFC’s products is maintained.

The Information Technology Department is responsible for maintaining the company’s

computer systems and networks, as well as developing and implementing new technology
solutions.

KFC Supply Chain

KFC supply chain is managed by its parent company, Yum! Brands. It operates a multi-tier
supply chain network, with various suppliers, manufacturers, distributors and retailers.

At the first tier, KFC sources its raw material from local suppliers such as vegetables and grain
suppliers.

At the second tier, KFC works with a variety of manufacturers, such as poultry producers, flour
mills, and beverage suppliers. These manufacturers provide KFC with the necessary ingredients
for its meal items.
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At the third tier, KFC works with a range of distributors, who deliver the ingredients to KFC
restaurant locations nationwide.

At the fourth tier, KFC has a network of retailers, which serves as the final link in the supply
chain. These retailers are responsible for selling KFC products to customers.

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
ensures the safety and quality of the products they store and distribute.

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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,
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
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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
 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

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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
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.

Zonal Distribution

KFC has over 44 outlets in Pakistan located in 15 cities. The main cities in which KFC has
multiple outlets are Karachi, Lahore, Hyderabad, and Islamabad. The zonal distribution of KFC
outlets in Pakistan are as follows:

Karachi Zone: 18 outlets

Lahore Zone: 10 outlets

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Hyderabad Zone: 5 outlets

Islamabad Zone: 5 outlets

Rawalpindi Zone: 1 outlet

Multan Zone: 2 outlet

Peshawar Zone: 2 outlet

Quetta Zone: 1 outlet

Abbottabad Zone: 1 outlet

Faisalabad Zone: 1 outlet

Gujranwala Zone: 1 outlet

Sargodha Zone: 1 outlet

Sialkot Zone: 1 outlet

Dimensions
KFC operates several zonal distribution centers across the country. These centers are responsible
for distribution of products to their respective regions. The dimensions of each zonal distribution
center vary depending on the size and scope of operations. Generally, the dimensions of the
zonal distribution centers range from 25000 sq. ft. to 40000 sq. ft.

Quality Assurance

KFC is committed to quality assurance and customer satisfaction. The company follows
international standards and conducts routine quality checks on its products and services. This
ensures that customers get the same taste and quality they expect from KFC. Some of the quality
measures employed by KFC include:

 The use of quality ingredients in all products.

 Preparation of all products in accordance to KFC’s standards
 Maintenance of food safety standards in all restaurants
 Routine quality check of products
 Use of halal approved foods wherever available
 Strict hygiene policies in all restaurants
 Regular training for all staff members
 Regular audits of all restaurants
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Software

KFC uses a variety of software to streamline their operations, including:

1. Point of Sale System (POS): A robust point of sale system to manage sales, orders and
payments.
2. Inventory management System (IMS): A comprehensive inventory management system
that tracks stock levels, orders, and deliveries.
3. Customer Relationship Management (CRM): A comprehensive CRM system to track
customer interactions and loyalty.
4. Human Resources Management System (HRMS): A comprehensive HRMS to manage
employee information, payroll, and performance
5. Data Analysis Software: A suite of data analysis software to gain insights from customer
and operational data.
6. Kitchen Management System (KMS): A comprehensive kitchen management system to
manage food preparation, cooking, and delivery.
7. Online Ordering System: A comprehensive online ordering system for customers to order
food online.
8. Financial Accounting Software: Comprehensive financial accounting software to manage
accounts receivable and accounts payable.

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