What happens when Chick-fil-A has no chicken?
In Texas, Chick-fil-A had to temporarily close two restaurants because an issue was characterized as a “delivery delay.” This problem was much smaller than the KFC chicken shortage in the UK earlier this year, when almost all of its restaurants were shut down for lack of its key ingredient, but it none-the-less disrupted the organization’s operations in a very significant way.
In an unrelated issue, in mid-June, In-N-Out shut down in Texas due to an unspecified problem with the quality of its hamburger buns.
This post is based on the Inc.com article, Oh No, Chick-fil-A. First KFC, Then In-N-Out. Now You Too?, by Bill Murphy, Jr., June 30, 2018. Image source: Livingpix/Getty Images.
1. How does this article pertain to operations strategy and the socio-cultural dimension of the external environment?
Guidance: While the causes behind these product shortages have not been clearly identified, the issue of stockouts may become more widespread in the future due to the shortage of qualified truckers in our nation. Trucking is often viewed as a dangerous and difficult occupation, and companies are struggling to find enough drivers. Even one cancelled or late delivery can have a huge impact on a business, as seen in this article about Chick-fil-A.
2. How do the issues of inventory management and customer service relate?
Guidance: While companies seek to operate “lean,” keeping inventories, other wastes, and costs down, they are also working hard to ensure that demanding consumers can get their products in a timely way. If too much inventory is held, some of it may spoil or become obsolete before it can be used. However, if not enough is available, customers may not be able purchase their “first choice” product, or in the case of the recent chicken shortage at Chick-fil-A, they may not be able to buy the products they want at all. Accurate forecasting can help, but all forecasts are subject to both random and irregular variation. Customers demand fresh and high quality ingredients from restaurants like Chick-fil-A and In-N-Out, but the reality of making that happen while still holding costs down and operating in an efficient way can be challenging.