When you think of KFC, you think of chicken, right? It was therefore inevitable that the fast-food giant had to halt operations in UK due to a shortage of chicken in 2018.
The brand tried to joke its way out of the poultry shortage fiasco, tweeting on the situation, “The chicken crossed the road. Just not to our restaurants…” this happened due to problems with its new food service suppliers at the time, DHL. They had no prior experience in chilled foods and therefore lacked the expertise to fulfil this role successfully. On the other hand, management issues stemming from KFC also led to the failure, such as insufficient due diligence and no contingency plans being in place.
The collapse lasted more than a week and cost KFC millions of pounds, not to mention customer loyalty. But it also had a positive effect that prompted many businesses to reconsider and innovate their procurement and supply chain management (SCM).
More recently, global supply chain PC shortages have affected businesses. This problem has caused the price of computer components to increase significantly and made it difficult to secure hardware products on time.
Here’s a look at some reasons why procurement and supply chain management can fail:
- Offshoring – meaning monitoring activity can be difficult
- Increasing complexity of supply chains – causing a lack of clarity about who suppliers are subcontracting to
- Cost pressures – causing companies to compromise on quality and/or ethics
- Geographic clustering – making manufacturers vulnerable to a localized disaster
- Modern communications – which can quickly damage reputations
- Just-in-time production methods – which have reduced the time to recover from supply chain failure
- Dependence on multiple suppliers – which can increase overall vulnerability
Oftentimes, these supply chain problems — whether it’s a company rushing into something or it’s a disconnect between critical nodes in the supply chain — can be remedied by bringing in the right kind of outside help.
Paragon Results has that fresh perspective you need. Contact us to learn about our highly effective procurement and supply chain management solutions and consulting services that will help you avoid supply chain management disasters.
Companies have proven; quality products and creative marketing are key components of success, but in the end, there’s no substitute for a robust and well-executed procurement and supply chain management.