9 months, 6 days ago

Fail Fast – Why did the Chicken cross the road?

Link: http://feedproxy.google.com/~r/Soapbox/~3/C_2q3Ayp_ac/fail-fast-why-did-chicken-cross-road.html

A commonly accepted principle of architecture and engineering is to avoid a single point of failure (SPOF). A single depot for a chain of over 850 fast food restaurants could be risky, as KFC was warned when it announced that it was switching its logistics from Bidvest to a partnership with DHL and QSL, to be served out of a single depot in Rugby. We may imagine that the primary motivation for KFC was cost-saving, although the announcement was dressed up in management speak – “re-writing the rule book” and “setting a new benchmark”.

The new system went live on 14th February 2018. The changeover did not go well: by the weekend, over three quarters of the stores were closed. Rugby is a great location for a warehouse – except when there is a major incident on a nearby motorway. (Who knew that could happen?)

After a couple of weeks of disruption, as well as engaging warehouse-as-a-service startup Stowga for non-food items, KFC announced that it was resuming its relationship with Bidvest. According to some reports, Burger King also flirted with DHL some years ago before returning to Bidvest. History repeating itself.

However, the problems faced by KFC cannot be attributed solely to the decision to supply the whole UK mainland from Rugby. A just-in-time supply chain needs contingency planning – covering business continuity and disaster recovery. (Good analysis by Richard Priday, who tweets as @InsomniacSteel.)


KFC revolutionizes UK foodservice supply chain with DHL and QSL appointment (DHL Press Release, 11 Oct 2017)

Andrew Don, KFC admits chicken waste as cost of DHL failure grows (The Grocer, 23 Feb 2018)

Andrea Felsted, Supply chains: Look for the single point of failure (FT 2 May 2011)

Adam Leyland, KFC supply chain fiasco is Heathrow’s Terminal 5 all over again (The Grocer, 23 Feb 2018)

Charlie Pool (CEO of Stowga), Warehousing on-demand saves KFC (Retail Technology 26 February 2018)

Richard Priday, The inside story of the great KFC chicken shortage of 2018 (Wired 21 February 2018) How KFC ended the great chicken crisis by taking care of its mops (Wired 2 March 2018) The KFC chicken crisis is finally over: it’s (sort of) ditched DHL (Wired 8 March 2018)

Carol Ryan, Stuffed KFC only has itself to blame (Reuters, 20 February 2018)

Su-San Sit, KFC was ‘warned DHL would fail’ (Supply Management, 20 February 2018)

Matthew Weaver, Most KFCs in UK remain closed because of chicken shortage (Guardian 19 Feb 2018) KFC was warned about switching UK delivery contractor, union says (Guardian 20 Feb 2018)

Zoe Wood, KFC returns to original supplier after chicken shortage fiasco (Guardian 8 March 2018)

Wikipedia: Single Point of Failure

Related posts: Fail Fast – Burger Robotics (March 2018)