KFC Corporation

 Based in Louisville, Kentucky, KFC is the world’s second largest Quick Service
Restaurant chains
 The chain founded by Colonel Harland Sanders is a subsidiary of Yum! Brands
 KFC is known for its original recipe for fried chicken, which is prepared using
a blend of secret 11 herbs and spices
KFC Corporation

Vision
To be the leading integrated food services group in the world based on
consistent quality products and exceptional customer-focused service.

Mission
To maximize profitability, improve shareholder value and deliver sustainable
growth year after year.
KFC Global Presence
KFC Menu
Business Strategy

 Cost reduction – process efficiency

 Quality – stringent quality management program which ensures that the company meets all the
required standard of hygienic food.
 Delivery – Reduction of delivery time by 50% by designing an effective assembly line and facility
layout.
 Dependability - Understanding the consumer requirements and training of the staff.
 Flexibility – Dynamic production. Focus on adding new products in the menu.
KFC Supply Chain

Warehouse
(Cold Storage) Preparation &
Packaging

Delivery to KFC
Branches

Warehouse
(Normal Storage)
Making KFC Original Fried Chicken

The pieces are The pieces are

inspected rocked 7 times

Rolled in flour and Fried in oil at 170

secret ingredients 7 degree Celsius
times
 Facility Selection

Criteria
 Proximity to the customer
 Main roads, Shopping malls –
high footfall
 Low cost
 Infrastructure
 Skilled labour availability

Method
 Factor rating method
 Cost-Profit-Volume Analysis
 Facility Layout

 Market Demand
(Production Capacity)
 Brightly lit
 Attractive colour schemes
 Comfortable seating
arrangement
 Customer friendly staff
Quality Assurance

 Supplier Quality – Quarterly review (STAR System) C - Cleanliness

 Restaurant Quality
H - Hospitality
 Surprise quarterly visits by ROCC inspectors (CHAMPS)
 65/80 A - Accuracy
 Twice by YUM appointed auditors
M - Maintenance
 Pest Control – Monthly inspection
 SOP – sanitation & hygiene P - Product Quality
 Training
S - Speed of Service
 Vaccination
Hayes And Wheelright’s Framework

Give an Operations Redefine the Externally

Advantage industry’s supportive
expectations

Be clearly
Link Strategy the best in Internally
With Operations the supportive
industry

Adopt best Be as good as Externally neutral

Practices competitors

Stop holding the

Correct the organization back Internally neutral
Worst Problems

STAGE 1 STAGE 2 STAGE 3 STAGE 4

The The The
ability ability ability
to to Support to
Implement strategy Drive strategy
strategy
Chizza
Chizza

 Test Marketing - Launched in July 2015 in Philippines, Dec 2015 in India

 Mixed Reviews
 Customer Complaints
 Cheese hardens
 Crust becomes soggy
 Chicken becomes cold

 Not released yet in US, UK – Growth plans?

Chizza

Market Positioning Product Life Cycle

 Deliciousness
 Chicken + Pizza

SALES
Business Strategy
 Flexibility
 Product line expansion
 Differentiation
INTRODUCTION GROWTH MATURITY DECLINE
 Quality
TIME
Competitive Dimensions

 Quality
 Lead time
 Range
 Look
 Packaging
Order Qualifiers
 Taste

Order Winner
Performance Objectives – Polar Diagram
Terry Hill’s Strategy Development
Framework

Step 1 Step 2 Step 3 Step 4 Step 5

Corporate Marketing Strategy How do they win Operations Strategy
Objectives orders?
Process Choice Infrastructure
Customer • Store location • Quality • Suppliers • Operations planning
focused service • Employee training • Cost • Inventory control systems
• New dishes • Lead time • Distribution centers • Lab testing
• Range • Compensation systems
• Service
Profitable • Expand through • Flow shop process design • Hiring process
• Ambience
Growth franchising • Standardized store design • Training
• Taste
Consistent • Employee training • Value chain coordination • Supplier Relations
Quality Products • Standardized mix • Inventory storage and control • Training
• Standardized processes • Quality control
KFC
Market Requirements
 Food as an experience
 Healthier, wider options
 Grab and go offerings (Convenience)
 Micro Cuisines (Regional items)
 Quality, real food (free of additives)
 Mindful dining (Ethical suppliers)
 Customization
Operations Capabilities
 Franchisee model – low maintenance
 Localization of suppliers – Bargaining power
 JIT production
 Strong value chain
 Brand recognition
 Stringent quality checks
 Food & Innovation Technology Center
 Make Your Own Basket
 Intensive Training programme
Line of fit
Level of market
requirements

Gap
• Low health-conscious offerings
• High price – Value for Money?
• Limited menu

X
Level of operations
resource capability
Platts Gregory Framework

Market requirements
Product family
Achieved performance
Delivery lead-
time Short Long

Reliability
Variable Good

Features
Few features High absolute level

Quality
Acceptable High

Flexibility
design Standard only All products customised

Volume
Low High

Price cost
Low High
 Importance – Performance Matrix
GOOD

1 Urgent:
2 EXCESS? a) Ethical Issues
F APPROPRIATE b) Health conscious
Performance against

3 G
D
4 Improve:
competitors

E
c) Vegetarian Offering
5
d) Quality Checks
6 IMPROVE C

7 A Appropriate:
8
B
URGENT e) Faster/Better Service
ACTION
9 Excess:
BAD

9 8 7 6 5 4 3 2 1
f) Diversification (Regional dishes)
g) Fresh Offerings
Importance for customers
LOW HIGH
Operations Strategy Matrix
Resource Usage

Trademarked
Quality Freshness Quality audits
ingredients

Market Competitiveness
Performance objectives

Speed S&OP systems Employees training

Localization of
Dependability Inventory Availability
suppliers

Quick Product innovation

Flexibility Dynamic production Customization
replenishment labs

Bonding with Efficient process

Cost Low cost locales
suppliers design

Process Development &

Capacity Supply Network
Technology Organization
Decision areas
New Operational Capabilities

Develop Deploy
Product development at micro level Investments in FIT Centers, Hiring
local food technologists
Wider menu – explore beyond Create and test new products
chicken retaining ‘chicken’ at the core
Leverage its partnership with PepsiCo More co-branded outlets; Extensive
and Yum Brands dining outlets
Establishing SOP to improve quality Proper training for servicing as the
of service ones existing for cooking