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Submitted By:

Roll # 6106 MBA

  • 3 rd Semester

Submitted to Madam Maria Kiran

Marketing Management Assignment Submitted By: Roll # 6106 MBA 3 Semester Submitted to Madam Maria Kiran



Education Multan Campus

A supply chain, logistics network, or supply network is a coordinated system of organizations, people, activities, information and resources involved in moving a product or service in physical or virtual manner from supplier to customer. Its management deals with the process of planning, implementing, and controlling its operations with the purpose of satisfying customer requirements as efficiently as possible.

Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. It integrates supply and demand management within and across companies.

If a supply chain management system is properly implemented, strategic and competitive areas can be used to their full advantage. Fulfillment is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows a company to constantly see what is on stock and making sure that the right quantities are ordered to replace stock.

Logistics is enhanced, keeping the cost of transporting materials as low as possible consistent with safe and reliable delivery. Production can run smoothly as a result of fulfillment and logistics being implemented correctly without delays due to ordering and transportation. The company's flexibility to respond to unforeseen changes in demand and supply is improved.

Because of this, a company has the ability to produce goods at lower prices and distribute them to consumers quicker than companies without supply chain management thus increasing the overall profit. And most especially, cooperation among supply chain partners and consumers is established ensuring mutual success.

Supply chain management must address the problems regarding distribution network configuration--number and location of suppliers, production facilities, distribution centers, warehouses and customers; distribution strategy--centralized versus decentralized, direct shipment, cross docking, pull or push strategies, third party logistics; information--integration of systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation; and inventory management--quantity and location of inventory including raw materials, work- in-process and finished goods.

Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end-consumer. Its success relies on the corporations' focus on core competencies and being flexible. In some circumstances, operations should be outsourced to other corporations that can perform the activities better or more cost effectively.

Supply Chain Management KFC

KFC products are the main raw materials (Chicken, mashed potatoes, seasoning) determined by the head office supplier, usually raw materials (bread, beverage puree, vegetables, packaging, etc.) by the district level has confirmed that the suppliers. KFC a “star system (STAR SYSTEM)” a selection of alternative suppliers, which is specifically for a global assessment of supplier management system in China since 1996, full implementation of the supplier. This assessment system consists of five areas: quality, technical, financial, reliability, and communication. Every three to six months of regular assessment and evaluation throughout the year were, from KFC’s technical department and the purchasing department were assessed at the end of the composite score will determine the supplier of the volume of business in the next year in the share.

(A) The supply of logistics model based on DRP

KFC supply process is: The restaurant will be reported to branch distribution center order demand, the latter after an order to the supplier, the supplier delivery to the distribution center, distribution center under the line delivery. This mode of

operation of the logistics supply thought to follow DRP, DRP system includes two three input files and output plans, namely: the main demand planning, inventory files, supply the resource file; procurement plans, distribution plans.

  • 1. The main requirements planning

Manager of the store orders the use of term-type orders filled, raw materials into frozen goods, dry goods, wet goods (short shelf life of bread, vegetables, etc.), the number of weekly orders are 1,1,2 – 4, ordering volume = demand – inventory. Demand is the purchase cycle, lead time and safety stock of, and, ordering the manager considering the historical sales data and promotional activities, or weather factors to calculate the turnover of an order cycle, and then converted according to the amount of thousands of round needed the number of raw materials. Demand plans to form form, set the table, including raw materials, estimated demand, not yet reached the volume of the end of the stock, order quantity, the amount of allocation of the purchase details, the form signed by the store manager sent to distribution centers .

  • 2. Inventory File

Every day before work, the staff of the provisions of the inventory of raw materials inventory and registration. This data is the order quantity is essential calculations, this data can also be used for costing the same day.

  • 3. Supply resource file

It is affected by supply-side arrival time. This time depends on the time of transmission and processing orders, supplier response time of the order, the efficiency of distribution centers.

  • 4. Procurement Plan

Distribution Center branch of the restaurant received orders for processing, such as the number of orders found abnormal fluctuations in a restaurant, the communication and confirm, the restaurant orders must be received 15 points in the end of the afternoon, after ordering the distribution center personnel view existing inventory and shipment data are not revised order, the next day by email or fax sent to the supplier, which according to the quantity and date for production and transportation to distribution centers.

  • 5. Distribution Planning

According to the distribution centers indicated by the restaurant’s order number and the required raw material arrival time in the system, picking orders and shipments to generate summary tables, pickers, picking, packing, shipping transportation officer under the distribution plan summary arrangements, including: capacity approval, vehicle selection, delivery routes, transfer. The assessment team through the delivery vehicle loading efficiency, punctuality rate of fuel consumption and goods, safe rate were carried out.

3, the evaluation mode of supply logistics KFC

Through the above analysis we can see the following advantages Kentucky logistics system: First, strong support for the normal operation of the enterprise and rapid expansion; the second is based on the various restaurants on the basis of accurate demand planning procurement strategy makes the company’s inventory costs are greatly reduced; third distribution center in the entire logistics system in a central location, status and role of information systems to be truly reflected; Fourth, demand forecasting, distribution planning and other aspects of quantitative and standardized management reflects the high level of enterprise management.


  • 1. Capacity of the Industry

KFC, being the world’s largest chicken restaurant chain and third largest fast-food chain, with over 9,000 in both franchise and company-owned restaurants worldwide and was operating in 68 countries, simply shows that KFC has the capacity to address the needs of its customers no matter how old their facilities and product form was. However KFC’s significant service problem will probably push their customers away from them, thus KFC must have to imply ways on how to meet there customers expectations. KFC ought to think that customer goes to their establishment not just because of their product but also their service, because nothing bits a quality service.

The continuous opening of new restaurants in 1995, approximately two restaurants in every three days is one way of proving their competence when it comes to business expansion, thereby providing a wide market segment not just local

but worldwide.

  • 2. Availability of Needed Resources

KFC has several problems when it comes to its resources, specially on the needed materials, because there system is older when it comes to their facilities and product forms and it’s one thing that needs an attention, since this is the key to success in terms of production and it would be there competitive edge in the wide array of fast food chain industry. KFC

Despite of the rivalries of employees and managers, KFC had surpassed this incident. KFC’s culture was built largely as the employees enjoyed relatively good employment stability and security. Over the years, a strong loyalty had been created among KFC employees, because of the benefits and pensions and other non-income needs. Thereby, KFC has the ability to retain and manage its manpower.

As to the company’s money, KFC has the enough profit on its recent operations as of 1994, worldwide on both company- owned and franchised restaurants. Whereby it reaches $1.7 million in this regard KFC has the capacity to innovate their old system or how to transform the old KFC into new one.

  • 3. Volatility of Technology

Basically KFC’s past technologies still existed at present, which means that their families were durable enough because it works for years. However the main issue now is how they could transform the existing facilities for them to be more competitive.

  • 4. Social Constraints

KFC encountered several factors constraining KFC’s international expansion plans such as the social unrest, increasing trade and current account deficits and the uncertainty surrounding the economic policy. Some incidents were directly attack of nationalist against KFC and closure of the first restaurant in India by local authorities are to protest of local farmers group allied with a campaign across India against foreign investment which was occurring as part of the countries four year old program of economic liberalization.

  • 5. Inflation Vulnerability

As KFC entered business in Mexico. High tariff and other trades barriers restricted imports in to Mexico, and foreign ownership of assets in Mexico was largely prohibited or heavily restricted. After 1982, the Mexican government battled high inflation, high interest rates, labor unrest, and lost consumers power. When Carlos Salinas de Gortari seated as President, Mexico improved, top marginal tax rates were lowered, and the new legislation eliminated many restriction for foreign investment.

President Salinas institutes a policy of allowing the peso to depreciate against the dollar by one peso per day, it result a grossly overvalued peso, and this lowered price of imports & led to an increase in imports of over 23 percent in 1989.

KFC’s primary concern was the stability of Mexico labor markets. Labor was really cheap in Mexico. While KFC benefits from lower labor costs, labor unrest, low job absenteeism, & punctuality continued to be significant problems. These problems with worker retention and labor unrest were mainly the result of workers frustration over the loss of their purchasing power. Due to inflation & to past government controls on wages increases. A slowdown in business activity brought about by higher interest rates & lower government spending, lead many businesses to lay-off workers.