Professional Documents
Culture Documents
OPERATIONS MANAGEMENT
ACKNOWLEDGEMENT
TABLE OF CONTENTS
INTRODUCTION
i.
ii.
iii.
iv.
History
Strategy
Target market
Products
CURRENT OPERATIONS
i.
ii.
iii.
iv.
Inventory management
Supply chain management
Just in time
Operational management
Summary
Conclusion
Recommendations
INTRODUCTION
COMPANY PROFILE
KFC Corporation
based in Louisville, Kentucky, is the world's most popular chicken restaurant
chain, specializing in Original Recipe, Extra Crispy, Kentucky Grilled Chicken. Every day, more
than 12 million customers are served at KFC restaurants in 109 countries and territories around
the world. KFC operates more than 5,200 restaurants in the United States and more than 15,000
units around the world. It is the worlds largest and most well known chicken restaurant, with
chains in more then 10 thousand locations and worldwide in 80 countries. KFC and its franchised
employees are more than 200 thousand, all over the world. KFC is world famous for its Original
Recipe fried chicken -- made with the same secret blend of 11 herbs and spices Colonel Harland
Sanders perfected more than a half-century ago. Customers around the globe also enjoy more
than 300 other products -- from Kentucky Grilled Chicken in the United States to a salmon
sandwich in Japan
PARENT COMPANY
CUPOLA PAKISTAN
Cupola
is a Dubai based multinational company and has been at the forefront of development in
Food & Retail sector for over a decade. Its flagship brand KFC has amassed itself as the
dominant concept in the Quick Service Restaurant (QSR) business in the country
KFC PAKISTAN
Food, fun & Festivity, this is what KFC is all leading the market since its inception;
KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel sanders
secret original recipe chicken or the hot & spicy version, every bite brings a yum on our face. At
KFC they say,
We do chicken right
KFC STRATEGY
Its primary objective is to take advantage of the potential growth in other
countries. To establish a strong position and to develop their image .key success factors are
Continuing cost saving through R&D
Use of new technology and innovation to work efficiently
Their key factors will lower the cost and increase profit industry.
TARGET MARKET
KFC targets HUNGER ,and we know there are no compromises when it
comes to HUNGER
PRODUCTS OF KFC
KFC Pakistan provides 100% Halal and Hygienic products to its
customers. It offers a variety of finger-licking products, some of which are as follows:
ORGANIZATINAL STRUCTURE
CURRENT OPERATIONS
KFC SUPPLY CHAIN
SUPPLIERS IN PAKISTAN
There are two categories of suppliers.the DRY FOOD
SUPPLY and the FROZEN FOOD SUPPLY. For a dry food supply like a burger bun
they have established their own warehouses .where as for frozen food chicken they
have agreement with K &N chicken for suppling chicken and fish is supplied by
Thailand and spices are supplied by dubai to all over restaurants in Pakistan.
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WAREHOUSE
Pakistan is divided into two areas, namely North and South. The area below
Multan falls under the southern region whereas, Multan and the area above it falls under North
region. Each region hence has its own warehouse. The North region has its warehouse in Lahore.
The south region has its warehouse in Karachi
.
PROCUREMENT
Monthly budgets are made to plan purchasing activities. These comprise of
dividing the allocated budget into the inventory policies already defined at the warehouse from
past data and experience. FIFO method is used for all items for the inventory at the warehouses.
Chicken
Chicken is supplied by K&Ns in customized cut, packed and labeled packets directly to
the warehouses in each region. Labeling is necessary for inventory management and efficiency.
KFC gives a lead time to K&Ns of one week for them to deliver their order. The chicken arrives
in special freezer fitted van which keeps the chicken frozen while it is being transported. The
Supply Chain Management different types of pieces ordered by the warehouse are in baskets of 5
square feet and having a height of 8 inches. The vehicles used for this are small trucks which
have a maximum loading capacity of five tons.
Sauces
Unilever (Yum) provides all the sauces needed by KFC such as Ketchup, Chilly Sauce,
Mayonnaise, Tartar Sauce etc. Yum is a brand especially made for KFC and cannot be sold in
the market to the customers. These are delivered directly to each warehouse
by Unilever themselves. The lead time for this operation is about two weeks.
Spices and herbs
These are imported directly from Dubai and Singapore. The lead time for these exceeds two
months as these are not perishable items and it takes a lot of time for transportation. All imports
are done through sea in dedicated 20 containers for KFC.
Packing Material
This is purchased from local parties namely Afeef Packaging, AAA and Gold Packages. Due to
frequent re-designing of boxes and deals offered by KFC, the inventory of these is kept at a
minimum.
Bread and Buns
Supply Chain Management Since the last 4 or 5 years KFC has been producing
their own buns in their own bakery. Their plant is located at Sohrab goth, Karachi.
Fish
Information was not provided. Internationally, fish is bought from Thailand. But in Pakistan,
fish is bought from local vendors as it is a low selling item.
French Fries
These are imported directly from America. They are also imported to Pakistan by Yum
company through china where they also come from America.
Supply Chain Management plastic bags with stickers on them showing the description of the
item inside it and the expiry for it. These bags are then put into a separate cold storage room,
again in an organized form.
Sauces
Inventory for Sauces are stored for around 25 to 30 days depending on the forecasted sales
and the expiry dates for each.
Spices and Herbs
Inventory for these are stored according to forecasted sales and the three months
lead time given by the procurement department.
Bread and Buns
Buns are provided directly to the branches at KFC from the factory after every 4
days.There is a weekly audit of every single inventory item at the warehouse to match it with the
numbers in the system as deviations are high due to high replenishment cycles.
ZONAL DISTRIBUTION
Distribution is done on need basis. The cities are divided into zones and the routes taken are
accordingly. Karachi is divided into 3 zones:
Zone 1:
Gulshan-e-Iqbal and Gulistan-e-Johar
Zone 2:
Clifton and Defence
Zone 3:
Bahadurabad, Tariq Road and Sindhi Muslim SocietyDaily 5 to 6 vehicles are dispatched from
the south warehouse for the interior Sindh (15 daysinventory) and Zonal distribution in Karachi
(1 week inventory for normal-storage and 2 day inventory for cold-storage goods)
Vehicles
Company:
Hyundai Shehzore
Quantity:
4-5
Company
Hino Dutro Truck
Quantity:
4-5
Gross vehicle weight
8.90 tons
Maximum capacity:
4 tons (reduced from 5 tons because of modifications
QUALITY ASSURANCE
here are multiple ways by which KFC assures the quality of its
products. Some of the ones which were disclosed to us were:
Customer feedback
SOFTWARE
MRP/ERP
The company uses Supply Chain Management (SCM) Software to manage its inventory acrossits
whole supply chain. This software has been developed by Siddhat Haider. There is
a weekly physical count of the inventory to tally it with the figures in the software
Conclusion
After analyzing KFC's operation and procedures it appears to be an effective and efficiently ran
restaurant. Customer relations are important assets to KFC, which builds repeat business and
reinforces their reputation as the leader in the chicken industry. As far as recommendations we
feel KFC needs to persevere with its already implemented procedures and continue to listen to
customer needs to ensure their success as an industry leader.
Recommendations
Even though it has defined the target market but stil need to redefine it
KFC has to improve its R &D
KFC has to look ahead for its health conscious customers
They only focus high income level
REFERENCES
KFC ISLAMBAD
http://www.kfcpakistan.com/