KFC runs out of chicken: Is the end near?

The chicken crossed the road, just not to KFC restaurants

Fancy some fried chicken? No problem, go to KFC, the world’s second-largest restaurant chain (by sales), with almost 20,000 locations globally. It is so popular that in Japan has become a tradition to have the christmass meal there, and getting the KFC special Christmas dinner often requires ordering it weeks in advance, or wait in line, sometimes for hours.

So now imagine yourself waiting for your traditional christmass dinner at KFC with all the family together, just to realize there is no chicken, destroying all the magical spirit of the christmass. Well, something like that has happened in the UK (maybe not as tragic), as more than half of the KFC restaurants in the country, over 600, have run out of chicken.

The 14th of February hundreds of the UK branches were forced to shut their doors when their chicken supply stopped. DHL, in partnership with Quick Service Logistics, took over the KFC supply contract from long term partner Bidvest Logistics, food distribution firm with years of experience that has been succesfully working with the brand for eight years. The new delivery company struggled to cope with supplying 900 shops.

Captura

The root cause of the problem is still uncertain, and it is not known yet if it’s a supply/stocking problem or a distribution one. The fact that there are no other companies that are lacking chicken shouldn’t make us think it is a transportation problem and discard a supply one.

It takes 8 weeks to raise a chicken, and chicken farms will be very careful not to hatch any surplus chickens that then crash the wholesale market in eight weeks. KFC don’t use a single supplier, so no chicken supplier can forecast the KFC demand on their own and so rely on the forecasting from KFC to plan production. So if the forecasts were messed up, then a long running shortage for several weeks is possible, unless KFC authorizes expensive and potentially out of specification purchases from the wholesale market.

We can see in this blog lots of interesting articles about how logistics work effectively in different business, but articles about what happens when things are not done well are far more scarce. Due to this error in the logistics, KFC is having huge loses on the UK, and it is not known if the contract will return to Bidvest.

Time will tell.

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