UK – As the KFC - DHL (fowl up, cock up, insert pun here) continues, the humorous notes have fallen from the scale to be replaced by anger at the treatment of the fried chicken company’s staff, franchised or otherwise, following a problem caused by an inability to ensure a smooth transition from one reliable logistics contractor, food delivery specialist outfit Bidvest, to general freight and parcel goliath DHL.
The GMB Union were commenting within minutes of the news breaking that the vast majority of the good Colonel’s retail fast food outlets had been forced to close due to supplies of the chicken simply not arriving. Now, having actually predicted in advance that the change was likely to cause disruption, they have again commented, this time in a less jocular vein,(although still managing the odd pun), calling for KFC and DHL to join forces to make sure affected workers are paid for the hours they’ve lost. Mick Rix, GMB National Officer, said:
“Our members in KFC franchises are missing out on shifts with no idea when their stores will reopen. They’ve told us they’re now being advised to use their holiday entitlement to cover the working time they’ve lost as a result of this mess. For a multi-billion pound global giant to treat workers at the sharp end like dirt because of their foul up is a disgrace.
“UK workers in KFC restaurants are losing out due to Colonel Chaos – their contracts are stuck in the bargain bucket. We demand KFC and DHL make sure affected workers are paid for the hours they’ve lost. These companies need to stop chickening out of their responsibilities in the aftermath of this shocking board-level decision.”
When looking at the broader issue of changing supply chain suppliers it is always worth weighing the possible financial gains against what may well be an excellent working partnership with a logistics supplier which is conversant with every facet of the business. SCALA is a provider of management services for the supply chain and logistics sector and managing director John Perry passed the following comments on the current case, saying:
“The recent delivery problems experienced by KFC stores across the country brings to light just how complex logistics operations can be, especially when servicing a large number of outlets that each have their own individual challenges. The operational issues have been put down to the fact that KFC has switched its delivery contract to DHL and the complexities of integrating with new IT systems. When changing contract providers, companies have to be very careful and must weigh up the risks.
”Typically, logistic operations cost companies between 4 and 10% of their sales value. So, even if a 10% cost benefit is achieved by changing contractor, this only really represents 0.4-1.0% of sales. KFC’s loss of sales will very quickly negate those benefits. Making changes to a contract, where often it is only the current supplier and the individual workforce who truly understand what the logistics operations involve, is a huge risk that has to be managed.
”We recently came across a company that had re-tendered its logistics operation and the current provider had bid significantly under its current contract price. When asked why, the supplier said that it had responded to the tender brief as it had been written. It knew that there were many complexities that came with the job, which had not been included in the tender document. But, the company also knew that its competitors, who didn’t know the business or how it worked, would only be bidding against what was included in the tender document.
“If the decision is made to switch provider, then contingency planning is vital to ensure that possible issues can be identified and resolved at the earliest opportunity. We would always insist on detailed planning, rigorous management of the preparation and operations set up, and of course, close communication between both parties well before the contract commences.”
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