Supply Chain Management

Supply Chain Management

Group Members:

SUBMITTED TO :-SIR ANAS IFFTIKHAR

1.Company Profile2. Parent Company3. Cupola Pakistan 4.Cupola’s Vision 5.Cupola’s Mission

KFC Pakistan KFC’s Mission Values of KFC

Core competency Franchise Locations Organization Structure

KFC Supply Chain

PROCUREMENT

Chicken Sauces Spices and herbs Packing MaterialBread and Buns Fish French Fries Other miscellaneous items

STORAGE AND INVENTORY MANAGEMENT

Chicken Sauces.Spices and Herbs Bread and Buns

ZONAL DISTRIBUTION

1.Vehicles

2.Company: Hyundai Shehzore. 3.Company: Hino Dutra Truck. 4.Quality Assurance

ACKNOWLEDGEMENT:- The completion of this project leaves one spent, but with a sense of jubilation, a sense of achievement, having reached the end of a long arduous road cannot be put to words. The time has come, when we take upon myself the gracious opportunity of expressing our heartfelt gratitude to mankind souls, who have helped and supported me, on this road we are very grateful to our most esteemed and revered faculty guide SIR ANAS IFTAKHAR faculty at IQRA UNIVERSITY, and suggestions which helped us on each and every step of our project. Thanking him will not be sufficient to the inputs that we have got from him. we are also sincerely thankful to Mr. Wasif Qazi value chain manager in KFC outlet Karachi) for the co-operation and assistance during the project. W e t a k e t h i s o p p o r t u n i t y t o e x t e n d o u r t h a n k s t o o u r f a c u l t i e s w h o directly or indirectly have supported us during the project. Our words canno t exp re s s ou r deep f e l t g r a t i t ude t owards ou r f ami ly and f r i ends whose suppor t and encouragemen t have he lped us t o c ros s a l l t he hurdles that came in our way.

C OMPANY PROFILE :

KFC Corporation:-Based in Louisville, Kentucky, is the world's most popular chicken restaurant chain, specializing in Original Recipe, Extra Crispy, and Kentucky Grilled Chicken. Every day, more than 12 million customers are served at KFC restaurants in 109 countries and territories around the world. KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world. It is the world’s largest and most well known chicken restaurant, with chains in more than 10 thousand locations and worldwide in 80 countries. KFC and its franchised employees are more than 200 thousand, all over the world. KFC is world famous for its Original Recipe fried chicken -- made with the same secret blend of 11 herbs and spices Colonel Harland Sanders perfected more than a half-century ago. Customers around the globe also enjoy more than 300 other products -- from Kentucky Grilled Chicken in the United States to a salmon sandwich in Japan.

PARENT COMPANY :

“CUPOLA PAKISTAN”

Cupola is a Dubai based multinational company and has been at the forefront of development in Food & Retail sector for over a decade. Its flagship brand KFC has amassed itself as the dominant concept in the Quick Service Restaurant (QSR) business in the country.

Cupola’s Vision: Cupola, Pakistan Ltd. aims to,“Create value through change, challenging existing paradigms by applying vision, innovation and skilled execution”.

The company has always accentuated corporate social responsibility through various initiatives taken under the banner of its flagship brand KFC. These include setting up of libraries in various

Supply Chain Management schools, provision of training for teachers and now to educational support for under privileged children. Cupola's mission : Is to harness and reap the potential of the rapidly developing markets of the Arabian Peninsula and South Asia. In the mature capital markets of Europe and the United States, they are well regarded as innovative and creative niche investors. They believe in the minimization of risk: through the depth of their senior management and the quality of their professional staff; through exhaustive and through an emphasis on pre-feasibility. Everyone in Cupola shares an almost obsessive drive for quality, an active consciousness of the team approach and a commitment to their collective success. They strive continually to improve the tangible and intangible returns for all their stakeholders.

Cupola’s Businesses:

Cupola is involved in several business including, oil gas exploration, plastic cards, retail markets and food franchising. Cupola holds the master franchise rights to operate KFC in Pakistan. Some of the businesses which are under contract with Cupola Pakistan are,1. KFC2. Indulge3. My Superstore4. Lal Qila5. The bakers

KFC PAKISTAN: Food, fun & Festivity, this is what KFC is all leading the market since its inception; KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel sanders secret original recipe chicken or the hot & spicy version, every bite brings a yum on our face. At KFC they say,“We do chicken right”.

Supply Chain Management Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way. With over 10,000 outlets in the world, KFC has maintained its title, for the last 60 years, of being the chicken Experts. Opening the first KFC outlet in Gulshan-e- Iqbal in 1997, KFC wore the title of being the market leader in its industry. Serving delicious and hygienic food in a relaxing environment made KFC everyone’s favorite. Since then, KFC has been constantly introducing new products and opening new restaurants for its customers.

KFC’s Mission:

KFC’s mission statement is,“To be the leader in western style quick service restaurants through friendly service, good quality food and clean atmosphere”

KFC Pakistan has contributed in providing Halal and Hygienic products to its customer’s and managed this through proper training of its human resources. It has created competitive level for other thus improving the overall industry standards.

Values of KFC: To establish a position in Pakistan as a leading WQSR (Western Quick Service Restaurant) chain, serving good value added services and Innovative chicken based products. KFC is consistently providing a pleasant dining experience, with fast friendly, in a clean and convenient location. Every moment dedicated to providing excellent and delighting customers.

Focusing all resources to the restaurants operation because that is where they serve their customers.Reward and respect the contributions of each individual at KFC.Expand and update training with time and be the best we can be and more.Be open, honest and direct in our dealings with one and other.Commit themselves to the highest standard to the personal and professional integrity at all times.Encourage new and innovative ideas because these are the key to their competit ive growth.Reward result and not simple efforts.Dedicate themselves to continuous growth in sales, profit and size of organization.Work as a team.

Core competency:

Since beginning, KFC has presented itself and well competed, only through it delicious chicken. People from all over the world know KFC as the best chicken expert. Their chicken has always been unique in taste and has helped them in order to build their own identity all over the world.

PRODUCTS OF KFC :

KFC Pakistan provides 100% Halal and Hygienic products to its customers. It offers a variety of finger-licking products, some of which are as follows:1 . C r i s p y F r i e d C h i c k e n2 . Z i n g e r 3 . T w i s t e r 4 . H o t s h o t s5 . C h i c k e n B u r g e r6 . H o t w i n g s7 . R i c e n S p i c e8 . F i s h Z i n g e r 9 . N u g g e t s10. Corn on the Cob11. French Fries

FRANCHISE LOCATIONS:

Presently KFC is branched out in eighteen major cities of Pakistan with around 64 outlets nation-wide. Some of the cities in which the KFC is in operation are as follows,1. Karachi

2. Hyderabad3. Lahore4. Islamabad5. Sukkur6. Faisalabad7. Gujranwala8. Rawalpindi9. Sialkot10. Multan11. Peshawar12. Jhelum13. Murree etc.

SUPPLY CHIAN:- KFC has a very simple supply chain. As the operations are on a relatively small scale, all the operations are performed by the company (i.e. Cupola) itself. The supply chain process can be assumed up as a 3 step process:

Step 1:Raw materials procured from various suppliers and stored at two warehouses; the normal-storage and the cold-storage. Details are discussed later.

Step 2:All product preparation is done at the branch except for the marinating of chicken and sold to customers at the branch itself or delivered at the desired locations.

Step 3:Warehouses replenish each branch according to their requirement (usually three times a week) using company’s own vehicles and drivers upon the request of the branch manager.SUPPLIER RELATIONSHIP

As we talked to the manager. He told us that K.F.C and cupola always try to build a good relation with their suppliers.

K.F.C don’t go for cost saving but they always work for cost management.

They treat their suppliers as their own family. Afeef groups are the main suppliers of K.F.C and almost 80%

of work is done by them

K.F.C helped Afeef groups to become builders and many

more.

WAREHOUSING: Pakistan is divided into two areas, namely North and South. The area below Multan falls under the southern region whereas, Multan and the area above it falls under North region. Each region hence has its own warehouse. The North region has its warehouse in Lahore. The south region has its warehouse in Karachi.

PROCUREMENT: Monthly budgets are made to plan purchasing activities. These comprise of dividing the allocated budget into the inventory policies already defined at the warehouse from past data and experience.

FIFO: method is used for all items for the inventory at the warehouses.

Chicken:Chicken is supplied by MENU in customized cut, packed and labeled packets directly to the warehouses in each region. Labeling is necessary for inventory management and efficiency. KFC gives a lead time to menu of one week for them to deliver their order. The chicken arrives in special freezer fitted van which keeps the chicken

frozen while it is being transported. The

Supply Chain Management different types of pieces ordered by the warehouse are in baskets of 5 square feet and having a height of 8 inches. The vehicles used for this are small trucks which have a maximum loading capacity of five tons.

Sauces:Unilever (yum) provides all the sauces needed by KFC such as Ketchup, Chilly Sauce, Mayonnaise, Tartar Sauce etc. Yum is a brand especially made for KFC and cannot be sold in the market to the customers. These are delivered directly to each warehouse by Unilever themselves. The lead time for this operation is about two weeks.

Spices and herbs:These are imported directly from Dubai and Singapore. The lead time for these exceeds two months as these are not perishable items and it takes a lot of time for transportation. All imports are done through sea in dedicated 20” containers for KFC.

Packing Material:This is purchased from local parties namely Afeef Packaging, AAA and Gold Packages. Due to frequent re-designing of boxes and deals offered by KFC, the inventory of these is kept at a minimum.

Bread and Buns:Since the last 4 or 5 years KFC has been producing their own buns in their own bakery. Their plant is located at Sohrab Goth, Karachi.

Fish:Internationally, fish is bought from Thailand. But in Pakistan, fishes bought from local vendors as it is a low selling item.

French FriesThese are imported directly from America. They are also imported to Pakistan by Yum Company through china where they also come from America.

Other miscellaneous items:Oil Dalda Vegetables Local Suppliers Rice

Hub Salt Toys Hong Kong Corn America

STORAGE AND INVENTORY MANAGEMENT

Chicken:

Inventory of chicken is for 15 days. The storage area for chicken is not in the warehouse itself but in a separate cold storage area built right beside the warehouse in each region. Before marinating, the chicken is stored in an organized form in six separate cold storage rooms whose area is around 45 to 50 square feet, having a height of around 7 feet. The chicken is stored in the same baskets which it comes in and stays there till its turn for marinating. Mari nation is done in a separate room in the same cold storage facility where the chicken is first washed and mixed with the herbs and spices it needs. The mixture is fed into a machine known as.Tumbler:Which marinates it. After this is done the chicken is re packed into labeled clear plastic bags with stickers on them showing the description of the item inside it and the expiry for it. These bags are

then put into separate cold storage room, again in an organized form.Sauces:Inventory for Sauces are stored for around 25 to 30 days depending on the forecasted sales and the expiry dates for each.

Spices and Herbs:Inventory for these are stored according to forecasted sales and the three months lead time given by the procurement department.

Bread and Buns:Buns are provided directly to the branches at KFC from the factory after every 4 days.There is a weekly audit of every single inventory item at the warehouse to match it with the numbers in the system as deviations are high due to high replenishment cycles.

ZONAL DISTRIBUTION:- Distribution is done on need basis. The cities are divided into zones and the routes taken are accordingly. Karachi is divided into 3 zones:

Zone 1:Gulshan-e-Iqbal and Gulistan-e-Johar Zone 2:Clifton and DefenceZone 3:Bahadurabad, Tariq Road and Sindhi Muslim Society Daily 5 to 6 vehicles are dispatched from the south warehouse for the interior Sindh (15 days inventory) and Zonal distribution in Karachi (1 week inventory for normal-storage and 2 days inventory for cold-storage goods).

Vehicles Company: Hyundai Shehzore Hino Dutro Truck

Quantity:4-5

Gross vehicle weight 8.90 tonsMaximum capacity:4 tons (reduced from 5 tons because of modifications)

QUALITY ASSURANCE:- There are multiple ways by which KFC assures the quality of its products. Some of the ones which were disclosed to us were:•Surprise visits to branches•Planned visits to branches•Rigorous raw material inspection•Customer feedback

SOFTWARE MRP/ERP:-

The company uses Supply Chain Management (SCM) Software to manage its inventory across its whole supply chain. This software has been developed by Siddhat Haider. There is a weekly physical count of the inventory to tally it with the figures in the software’s.

CONCLUSION:-

An overall study of Supply chain management, it has been observed that KFC in allover Pakis tan fo l lows a s imi la r pa t te rn of Supply cha in tha t enables i t to reduce t ime involved to reach end customers and reduce expenses in supply chain. Ultimately it is able to reach and fu l f i l l i t s end cus tomers needs and wants a t a reasonable or cus tomer  acceptable rates all over Pakistan. In short we can say the Supply chain management of KFC has positive impaction profit maximization by considering following points: 1. KFC (HQ) Karachi supplies ingredients to its entire outlet by its own transportation network all over Pakistan 2. KFC follows a periodic review system to keep track on all its inventory and market demand