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Operations
Management

Submitted to: Sir Tahir Aziz

Khan

Submitted by:
Amir Saleem(MBA 014)
Awais Shaheen(MBA 023)
Muzamil Safdar(MBA 104)
Muhammad Umer (MBA 095)
Irfan Mushtaq (MBA 047)
Muhammad Nadeem (083)
Mudassir Ali Zanjani(137)

Comsats Institute Of Information

Technology
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SUPPLY CHAIN MANAGEMENT

KFC (CUPOLA)

CASE STUDY
INTRODUCTION & BACKGROUND
CUPOLA is a multinational company working outside the Pakistan as
well, CUPOLA owning KFC at this time and having brands as well like
KFC, INDULGE, CASA BAKERS, LAL QILA, MY SUPER STORE, LOCCTAINE
and as for as KFC is concern there are 26 outlets working in Pakistan at
this time at different locations with a revenue of total 20million per
month from all KFC outlets.
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We know very well about KFC is a fast food multinational chain working
in Pakistan having a menu consist on fast food like Zinger burger, Fish
burger, Rice and Spice etc but as for as the process is concern in
preparing a single zinger burger there are various processes and
stages and involved in it, in case of any missing stage causes fault in
product mean low quality product so in order to provide 100% quality
to customer in order to satisfy the customer and for smooth operations
supplies should be according to demand and should be on time to
avoid any problem.

ISSUES IDENTIFICATION
Ware house supplies:
For operating a large no of outlets across the Pakistan its very
necessary to make strong your warehouses

Vendors:
There should have a good relation with the vendors so that the timely
supplies can be assured.

Bakery:
Bakery plays a vital roll in this concept as its directly related to the
production of the final product.

Local supplies:
Local supplies necessary when your warehouse not providing you the
supplies according to your demand.

ANALYSIS
Ware house:
There are two warehouses working with CUPOLA at this time and they
not only managing the supplies of KFC but also other outlets of other
concepts as well, major ware house is located in Karachi while sub
ware house is working in Lahore, there are two kind of supplies when
we talk about KFC outlets in Lahore some items need to order at
Karachi and some are arranged in Lahore respectively however the
items which order to Karachi may took much more time and cause in
delays the process consist on first the outlets provide their orderings to
Lahore ware house they verify the ordering with respect to the closing
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sheets of that month and forward it to the Karachi there again its
verified and required available items are send to Lahore warehouse
from where its distributed to respective outlets as per their orderings
however as we analyze this process it causes delays and this process
completed in 10-15 days which is very long period and items not
available they have to manage by warehouse manager at his own
which is also a difficult talk and irritate operations and short supplies
may cause unavailability of the item which means your customer is
going back just because of non availability of the product.

Vendors:
Some time due to several reasons the vendors stop the supplies
however as for as this concept is concern that’s very rare to happen
but possibility is still here as due to delays in the payment of vendors
they just stop to supplies the outlet which causes hurdles in smooth
operations, these kind of issues need immediate attention from
respective department so that’s why KFC finance department is
operating at its full capacity for providing aid to the restaurants and in
order to continue the smooth operations because these kind of things
directly affecting the outlet and results in bid loss.

Bakery Issues:
Bakery plays a vital role in smooth operations at any outlet the main
items provided by bakery include buns, cakes, breads etc as observed
bakery capacity is very limited which means there are more than 25
outlets working over there and there is only one bakery which giving
supplies to all in the past days many problems created due to short
supplies specially on certain occasions but now as production manager
is working on it so now on all events like Eid holidays etc all the outlets
provide their projections regarding demand before 2 to 3 days so that
the bakery can be manage to supply in time and accurate and this can
only be possible with the proper coordination between bakery and
outlets although its very difficult to project the demand before 2 to 3
days and its also very risky as they don’t want any kind of wastage so
in these kind of matter negligence at any point may result in a big
loose the recent example of this outlets not receive the cakes in the
period when sugar is short every where and bakery had the stock of
only 3 days after this cakes not supplied to the outlets all the
customers who order their cakes at their outlets cancel their orders
and many people cancel their birthday parties which is going to
organize at KFC so these kinds of projections and stock management
plays a vital role in customer retaining and for smooth functions.

Local supplies:
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The items which the outlets not received from warehouse they need to
buy from open market in order to complete their menu and buying
from open market not in the favor of any outlet the reason is that open
market rates are very greater than the products received from
warehouse which causes the increase in their petty cash and increase
in petty cash means increase in the expenses and if expenses are
increases your food cost is increases and increase in food cost means
decrease in the profit so whatever the situation local purchasing is not
encourage at any outlet of KFC its always discourage and the
managers do their best to avoid from local purchasing but in this
regard the role of warehouse is very important they need to
understand the problem and should provide some alternate to avoid
any problem.

Managing supplies (Fish patty)

Fish burger is very hot product of KFC but unfortunately in last winter
season it was not available at any outlet the reason is about as it is
imported from Thailand and in case of import of any product certain
time period is required and its import was delayed due to certain
government restrictions and other factors like tax etc due to which this
product was remain unavailable at all outlets and now its available at
all stores some people like to eat it in summer as well but the
important thing here is that when all things are known than these gaps
and these problems should be rectified so that the customer will not be
suffered.

LOCCTAINE
Locctaine outlet was located at liberty market near Al FATEH super
store but now its no more there this is concept of 100% imported
perfumery and other related beauty items this outlet earning at its
best but its inventory cost is very high minimum a imported soup price
is Rs 2000 and further things as this item is expensive other are as like
this are expensive and some time inventory cost imported items are
not bearable for any one so what they need to do they just close that
outlet this shows the importance of supplies and supplies
management.

Conclusion
KFC is a big concept which earning its big share from market and one
of the most favorite brand in Pakistan in food industry and also the
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fastest growing brand as well in this situation problems are every

where in every organization but the thing is to minimize it as we can
and this is what KFC is doing in order to compete the competitors they
have to do some extra in all aspects.

Recommendations:
• One or more warehouse is required for smooth supplies
• They need to use some latest technology for booking their orders
• Relations with the vendors should be more developed
• Bakery capacity need to be increase
• Stock management should be required at bakery level
• Imported items needs special attention in order to keep their
availability at all time
• Local supplies should be prohibited
• Alternate of suppliers should be there
• 100% customer satisfaction in quality, price and services should
be ensured through proper channels
• Meeting the international quality standards is a way to compete
competitors
• Management support and analysis are the key things to improve
the things.
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