Two thirds of the UK’s KFC restaurants have been closed for almost two weeks due to chicken shortages. The logistics provider, DHL, took on the contract only a few months ago and has been unable to deliver in what the Financial Times calls the worst logistics failure in recent years.
While the causes of this problem have not been stated publicly – they may not even be fully understood yet – the fiasco highlights how complex foodservice distribution is.
Being able to deliver fresh product three or four times per week to 900 restaurants requires infrastructure that aligns warehouse layouts, technology and transportation perfectly. Throughput is paramount, and one would assume that a large and innovative company such as DHL would get it right.
However, it is possible that DHL may not have fully understood the unique design and operating infrastructure needs of high-volume foodservice.
Fast food distribution is characterized by a limited variety of SKUs with a high quantity of cases per order line. While this is an opportunity for efficiency, it does not translate to simplicity. Problems such as congestion on the dock and in aisles or excessive replenishments can halt an entire operation if the infrastructure was not designed to handle the fastest SKUs.
Bulk picking to a route or reverse line picking the fastest SKUs can streamline the flow and mitigate problems. However, the first approach puts pressure on the driver, while the second may not work with limited dock space and a high volume of customers, as was possibly the case with KFC.
As KFC itself put it, the chicken crossed the road, just not to their restaurants. Hopefully this joke won’t last too long as the chain is facing millions in losses in its largest European market.