Supply Chain Failure: KFC’s Chicken Shortage

Supply Chain Failure: KFC’s Chicken Shortage

March 19, 2018

It seems hard to imagine that KFC would run out of chicken.  That’s their main menu item! How can they operate without chicken?

Turns out, they can’t. The majority of KFC’s UK restaurants were forced to close due to a chicken shortage.  Approximately 650 of the 900 KFCs closed in February 2018, while many of those that remained open, operated with a reduced menu.

The origins of the shortage: KFC decided to switch suppliers from Bidvest to DHL and QSL (a food distributor) in October 2017. They promised to “revolutionize the UK foodservice distribution market.”  Part of the promise included reducing logistics emissions to net zero over the life of the contract.

The change in distributors affected Bidvest and DHL.  Bidvest laid off 255 employees after it lost the contract, while DHL and QSL opened a new distribution center, and hired approximately 300 new employees.

Although improved performance was promised, not everyone saw such a rosy future.  GMB, the UK trade union for the displaced Bidvest employees, warned KFC of potential problems with the switch to DHL.  Mick Rix, the GMB’s national officer said:

“We warned them a few months Continue reading

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Lean: To Boldly Go Where No One Has Gone Before

Lean: To Boldly Go Where No One Has Gone Before

Elon Musk, the daring innovator and entrepreneur, aims for Tesla to surpass Toyota as the leader in lean manufacturing. He has laid out a vision for an automated, highly productive factory with outputs far exceeding those of competitors.

Multiple critics question his ambitions and highlight the numerous challenges Tesla has yet to overcome, including getting its Model 3 production line up to speed.

This post is based on the Forbes article, Musk Thinks Tesla Will School Toyota On Lean Manufacturing; Fixing Model 3 Launch Would Be A Start, by J. Muller, February 16, 2018. Image source: Shutterstock / Nick Starichenko.

Discussion Questions

1. Elon Musk believes that Tesla can build a million vehicles per year in a single factory. Is he referring to design capacity or effective capacity? Explain.

Guidance: Actually, it is not clear whether Musk is referring to the maximum output rate (design capacity) or what can be built after allowances have been taken into account (effective capacity). This is a good opportunity to discuss the differences between the two definitions of capacity.

2. Critics warn Musk against the financial risks of building such capacity. Express their concerns in terms of efficiency and utilization.

Guidance Continue reading

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NBA All-Star Game at Staples Center? Slam Dunk!

NBA All-Star Game at Staples Center? Slam Dunk!

For the third time, the 2018 NBA All-Star weekend will be held at Staples Center in Los Angeles.

The organizers underscore how experience with hosting major events such as the Grammy Awards and the NBA Finals facilitates the planning and execution of a successful project. Despite being planning pros, though, it took two years of intense preparation to make a slam dunk.

This post is based on the Los Angeles Times article, When the NBA All-Star Show Comes to Town, It’s ‘Managed Chaos’, by P. Coro, February 15, 2018. Image source: PureStock / SuperStock.

Discussion Questions

1. Projects are said to involve nonroutine activities. Can hosting the All-Star weekend at the Staples Center be considered a project if the event already took place in Los Angeles in 2004 and 2011?

Guidance: Discuss the characteristics of projects: unique operations, limited time frame, large number of activities, high cost, variety of skill requirements, multiple teams, etc. Despite past experience with similar projects at the Staples Center (non-unique), the activities are hardly “routine.” Moreover, new infrastructure and programs create new logistical challenges. This project does involve a limited time frame, a very large number of activities, and a high cost. Continue reading

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