Operational Management For KFC Sample

OPERATIONAL MANAGEMENT FOR KFC

ASSIGNMENT BRIEF

For the purpose of this assignment, you are an operations management consultant for KFC (a fast-food restaurant) in the United Kingdom. You are to provide advice and guidance to members of the executive board who are looking at two options for their business in the UK.
First option is to build a ‘drive-through’ fast food restaurant and the second is to build a fast- food restaurant near a university campus.
The Executive Board is seeking your group’s advice on business operations techniques that will allow them to decide on their best option and require your expertise to explain how Business Operations techniques may be applied to each option. Use theoretical models to explore the following four areas of business operations listed below.

1. Process types, mapping and design.
2. Layout types and design.
3. The Supply chain and capacity.
4. Location
5. Quality
6. Performance Measurement and Improvement

Initially, they would like advice on what methods they could use to locate a new fast-food restaurant in the UK and then, how the remaining techniques could be used to ensure fully competitive services at the KFC.

You can use examples from any organisations or case studies learnt within this unit or of other units.

Solution

Introduction

KFC can provide its employees with training and use a rewards system to recognise those successful employees in meeting the Company's goals. This is because KFC's performance is affected by improvements in the quality of its service. The independent directors on the board vote for one of their number to serve as the lead director. As per the MBA Assignment Experts, This individual is charged with a variety of duties, including communicating with the CEO regarding any decisions that have been made and consulting with shareholders when it is appropriate to do so. The Company has a board of directors, and the document titled "Corporate Governance Principles" that the Company uses specifies that the ideal number of members for the board is somewhere between 10 and 15 people. The majority of the members of this board need to qualify as "independent directors," and the board must get together at least five times each year. The executive board members of a company that operates in the UK and are considering two distinct paths for the Company's future are the target audience for this study, which aims to offer them advice and direction. The findings are summarised before the author draws a conclusion and closes the report.

Identifying Process Types, Mapping and Design 

Process Types

Operations should evaluate themselves using the triple-bottom-line (TBL/3BL) principle, which prioritises the well-being of people, the environment, and financial profits. When evaluating a company, using the Triple Bottom Line as a measurement tool is one of the most effective ways to determine how sustainable the Company is and how profitable it is (Boydell et al., 2021). At KFC, the business's impact on the overall quality of people's lives is used to determine the Company's "social bottom line." The operation's environmental impact is used to determine the environmental bottom line, abbreviated as Planet. The profitability of an operation, its return on assets, and various other conventional financial measures are used to determine the economic bottom line, also known as profit.
 

Figure 1: Triple bottom line
(Source- Tatlow-Golden & Parker, 2020)

KFC's mission is to provide customers all over the world with fast and efficient food products and of high quality, both in its restaurants and at customers' homes, and to ensure that its products are produced sustainably. KFC has an enormous and varied customer base all over the world, the majority of which comprises people who fall into the category of general consumers. KFC ensures that it is accessible to a diverse range of demographics across its global markets by providing products to consumers that are priced at a level that is affordable for a broad spectrum of customers.

Relationships with Customers

A fast-food restaurant building near a university campus KFC's goal is to secure repeat business from its consumers by delivering high-quality products and creating an enjoyable dining experience that is also quick and easy to use. The in-restaurant staff of the Company is the primary point of contact for the customers of the Company. These employees are available to take orders, respond to questions and complaints, and provide recommendations on the various items on the menu. To build a ‘drive-through’ fast food restaurant KFC is aiming to provide a membership and rewards programme for its regular customers to encourage repeat business and thank customers for their continued patronage (Tallow-Golden & Parker, 2020). Through participation in this programme, the Company can provide a variety of specials and discounts to its loyal customers. Customers can use the Company's website to access a variety of information that the Company provides for them, and this information can be accessed on a self-service basis. This includes services such as locating stores and providing online menus. KFC should build their restaurant on the campus of the university because a fellow student explained that one of the benefits of KFC is that it is convenient for students because they do not necessarily have to worry about access to foods if they choose to eat there. Additionally, the fellow student mentions that going to a fast food restaurant can save students time, which is especially helpful for those students who have a packed agenda and do not have time to search for traditional foods. When there are not many other dining options available, opening a restaurant at the university will be beneficial. KFC has perfected and implemented a number of different strategies planning for its expansion (Faruquee, 2021). The nature of the relationship that exists between an operation and its suppliers is frequently linked to the costs that are associated with CSR. It requires vigilant monitoring of all suppliers to guarantee that their business procedures are in line with what is generally acknowledged as standard operating procedure. KFC ought to acknowledge that it is partially responsible for its effects on the community and make that admission. KFC has instituted a poultry care and handling programme that is the most advanced in the industry and has begun conducting audits at the farm level. KFC has committed to eliminating, step-by-step, the use of unhealthy fats in its cooking oil in order to meet the standards for food safety that the World Health Organization has established.

Mapping

The commitment of KFC to the differentiation of its products and services and the market recognition of its specialisation gives the Company a sustainable advantage over its competitors. KFC has made efforts to satisfy the needs of its customers by developing menu items that have become accustomed to a portable, on-the-go society, and whose tastes are constantly changing. A company will pursue a differentiation strategy if its goal is to set itself apart from other businesses in its sector. KFC uses a differentiation strategy due to the fact that the recipe for its products is highly original and has never been replicated by anyone else (Phares & Richey, 2021). In recent years, the Company has made use of technology to transform its relationship with customers, improve the experience customers have with the Company and make the Company's executives more efficient. The fast food chain made use of the technology to attract nearby customers to KFC restaurants through proximity targeting and conquest advertising at the restaurants of its rivals. KFC is committed to making the most of what technology offers and has allocated resources toward this endeavour.

Figure : Process mapping steps for operation management
(Source: Sin et al., 2019)

Design

The KFC UK brief shows a model that shows how the proposition is still relevant and appealing in the modern world through re-defined steps in the Customer Journey. This model is for the main formats of larger dine-in restaurants with Drive-Thru, and it is shown for the larger restaurants. For this new kind of KFC experience, it was necessary to put together a toolkit of design principles and a creative suite of assets that could be used on both renovated and new sites (Jones & Comfort, 2021). These design assets included architecture on the outside, new ways to order and serve food, communication about the brand and products, and interior design. The bright new design for KFC's restaurants was based on concept principles, and creative solutions were made for both new build and re-fit projects. 

Technology makes information accessible to all individuals who participate in decision-making, which in turn helps to speed up processes and increases efficiency. In addition, KFC's department heads can improve their ability to collaborate with their teams in order to carry out decisions, and the Company also has the opportunity to keep employees up to date on how to carry out tasks in a way that will be beneficial to the business thanks to technological advancements (Faruquee, 2021). Also, technology makes it easier for department heads to work with their teams to make decisions, and it gives employees the chance to let them know how to do tasks that will help the Company. This is all made possible by the fact that technology allows department heads to execute decisions. The collection of data can be sped up by technology, which in turn helps company managers make decisions in a more timely and effective manner. By offering network links between consumers and the central record of the Company, KFC will be capable of gathering up-to-date information on sales to build a ‘drive-through’ fast food restaurant and be in a position to make decisions based on the newly acquired knowledge.

The use of technology in today's decision-making processes is becoming an increasingly important factor. When compared to the information they had to operate with just a few decades ago, the sheer amount of data that managers are expected to operate with on a daily basis is absolutely mind-boggling. And despite the fact that it might appear, at first glance, as though KFC would be better off making better decisions if they had access to a greater quantity of information, research indicates that this is not always the case (Phares & Richey, 2021).

Layout Types and Design

The planning of the (Process) Functional Layout and Cellular manufacturing is a kind of layout in which machines are interconnected based on the processing requirements of a group of related goods (component families) that need a similar process. This is done to optimize production and efficiency (Slack, et.al. 2018). KFC's plan to establish a fast food restaurant near a university campus may take the shape of a cellular structure. This specific configuration increases the efficiency of the production process. These granular structures are often referred to as cells. As a result, the configuration of the equipment capable of cellular production is known as a cellular configuration. Using a system known as group technology, processes are grouped and divided into cells (GT). Using group technology requires the identification of components with identical design and production properties (such as dimensions, shapes, and functions). Cross-training opportunities are made accessible to staff operating in cellular layouts so that they are able to operate any equipment included inside the cell and assume full accountability for the cell's output. On occasion, cells are added to a production line that will finally produce the product. In some cases, a cell is constructed by dedicating certain pieces of equipment to the production of a specific family of components, even if these units are not physically positioned inside the cell throughout the manufacturing process (these are called virtual or nominal cells). This method of doing business saves the firm the time and resources needed to modify its current organizational structure. However, physical cells are far more abundant. 

The word "flexible manufacturing" refers to a more automated variation of the term "cellular manufacturing" (FMS) (FMS). A computer equipped with an FMS tracks the transfer of components to the various processes (Flow Management System). This allows producers to take use of some of the benefits of product design while retaining the versatility of small-batch production. The following is a list of many advantages of cellular manufacturing: 

• Using cellular manufacturing reduces setup and processing times, material handling, and work-in-process inventories, all of which contribute to lower overall production costs. 

• The ability to produce goods in small numbers with cellular manufacturing leads to a certain degree of greater flexibility. The use of FMSs results in significant progress in this area. 

• Employees are less bored since they are cross-trained to run all of the cell's technologies. In addition, employees feel more in control and ownership of their jobs since they are directly involved in the production of their own cells.

Figure: An example of Function (Process) Layout that can be applied to the new food restaurant of KFC near the University Area.

(Source: ICP Study material) 

Understanding The Supply Chain and Capacity

Supply Chain

KFC is currently confronted with an intriguing obstacle in the UK. The number of restaurants owned by Bidvest is approximately 350, while those owned by DHL total approximately 550. One central location provides a number of benefits, most notably reduced operating expenses. Because everything is in one place, there is less need for coordination, which cuts down on redundancy in terms of both people and equipment. Despite this, the risk to the supply chain is increased. There is no backup plan in place in the event that one location fails or is delayed. When there are multiple centers, it is possible to shift demand, at least temporarily, when there are problems.

The most recent one was the breakdown of a constant supply of chicken to various outlets in the UK in February of 2018, which was the most recent of these lapses in performance. Even though these mistakes are sometimes unavoidable in a business as big and varied as KFC's, the Company's real strength lies in how these problems are dealt with and how plans are made for the future based on what is learned from these mistakes so that similar situations do not happen again (Tallow-Golden & Parker, 2020).

Figure: Supply chain management cycle in managing operation of KFC
(Source: Tallow et al., 2020)

The process of supply chain management includes an essential component known as logistics management. This component is responsible for the scheduling, implementation, and administration of the forward and reverse flow, as well as the appropriate storage of raw materials besides finished goods in a way that is efficient, both in terms of time and cost. In order to manage the demand in a seamless manner, an additional crucial variable in logistics is effective also timely communication in the middle of the place of origin and the place where the goods are stored (Shukla, 2020). In the case of KFC to build a fast-food restaurant near a university campus, the chicken is the most essential raw material that needed to be transported in a way that preserved its freshness and kept the temperature under control.

Instead of changing into DHL all at once and foregoing the security of having a backup, KFC in the UK could have instead chosen to implement a strategy that involved making the transition gradually over a period of time. This would have allowed both of the partners in the contract to test the ability of the new supply chain business in managing the majority of the responsibility that it involved, which would have spared both of the brands a significant amount of discomfiture and negative publicity.

Capacity

First and foremost, the exceptional performance of KFC has been credited to its quality management. The goal of quality management is to maximise the quality of products while adhering to cost and price constraints in order to live up to the expectations of customers and remain one step ahead of other products that are in the same market. The purpose of the quality management strategy is to ascertain the quality procedures and quality standards that are required in order to achieve the level of quality that is desired (Sin et al., 2019). The total quality management, also known as TQM, is a method of quality management that is utilised by the majority of modern businesses. The Total Quality Management (TQM) methodology is an approach that manages quality in terms of the overall performance of an organisation, including the production process, sales, and the provision of services. KFC should develop a total quality management plan in order to achieve this goal to build a ‘drive-through’ fast food restaurant. This plan should ensure that quality standards are adhered to in order to meet the expectations and preferences of customers while opening a new drive-through fast food restaurant.

Due to an issue with the supply chain, KFC locations across the UK were unable to obtain any more chicken. This was due to multiple issues that existed within their supply chain as the root cause. A breakdown in the supply chain led to an operational problem at KFC, which caused customers to be turned away from the restaurants because there was no chicken available to serve them (Shukla, 2020). In addition, KFC contributed to having a negative reputation as a result of irate customers venting their frustrations on social media by criticising KFC stores. In addition, the KFC locations that were operational had restricted menus available for customers to choose from; this continued to be a source of contention within the KFC stores, as both customers and employees of KFC argued about the limited menu options (Luo et al., 2022). 
 

Figure: Capacity management process cycle
(Source: Dincer et al., 2021)

Location

The location of a plant or facility refers to its geographic positioning in relation to other operations or users, as well as any input resources. There are three reasons why a location strategy is required. To begin, a brand-new company needs a location where it may produce goods or carry out a service. The second reason is to move an existing business to larger quarters or to a location that is more convenient for the company's clientele. Third, moving to a new location in order to expand the business. Rarely made, but very necessary for a company's continued profitability and viability over the long term, plant or facility location selections may make or break a business. If a company chooses the wrong location for its headquarters, it may have to deal with a number of complications and find it difficult and expensive to relocate. 

Figure: Factors affecting location decisions in operational management
(Source: Boydell et al., 2021)

The location of manufacturing facilities is less important than it is for service activities. Businesses that focus on providing a service often have facilities that are more customer-oriented, smaller, and less costly. Cost should be taken into consideration if one is selecting a location for the establishment of a manufacturing plant. Access to customers is essential for a business that focuses on providing a service, but a manufacturing facility has quite different requirements. Labor force, proximity to suppliers and other markets, distribution and transportation charges, energy availability and cost, community infrastructure, government constraints, and taxes are some of the factors that are included here. 

Quality

Typically, executives are inundated with data, which makes it difficult for them to get insights. The vast majority of the indications on an executive dashboard are concerned with finances, yet manufacturing executives need operational data in order to gain corporate management. They are interested in understanding how the performance of their operations impacts their goals. It is common knowledge that quality has an effect on the performance of an organization. Companies have traditionally had a hard time defining quality metrics for their products. KFC will be able to present an accurate insight to the executive team with the use of these indicators. KFC could want to add other metrics depending on the business sector, the region, the size of the company, and so on. 

Figure: TQM process followed in an efficient operation management type
(Source: Park et al., 2022)

It is essential to develop a comprehensive metric that enables insight into the many operational aspects that are of the utmost significance, as quality has an effect on a variety of different aspects of the company. This is because quality has an effect on a variety of different aspects of the company. KFC may get the answer to this question by using the OEE formula to do the calculation: 

OEE = Availability x Efficiency x Quality

To begin, total equipment effectiveness examines a company by measuring the percentage of time that an asset is available when it is planned to offer a product or service for a customer. This may be done by looking at the availability of the asset when it is scheduled to do so. Second, when an asset is generating items for a customer, OEE evaluates how close the asset is producing to its maximum possible output based on its theoretical potential. This is done to ensure that the customer receives the most possible value for their purchase. And last, the overall equipment effectiveness (OEE) measures the percentage of things that are produced in line with the quality standards for those goods that are produced. This evaluation is done to determine how well the equipment is performing overall (Burgess, 2018). 

The New Product Introduction (NPI) statistic is defined as the percentage of new items introduced into the market that achieve their individual time, volume, and quality criteria. In other words, NPI measures how well new products meet their particular goals. The introduction of unique products to the market is a typical activity that adds to the creation of a competitive advantage. This is true in a variety of industries, including the automobile and consumer electronics industries. The growth of your firm's profitability is not only based on how well your company introduces new products to the market, but also on how successfully it satisfies its new product introduction (NPI) goals. 

Performance Management and Improvement 

Not only have traditional retail sales undergone a complete sea change since the advent of e-commerce and e-business, but the method of managing supply chains in their entirety has also been completely transformed. There is a significant reduction in the number of errors that occur as a result of delays and breakdowns in communication when real-time information can be transmitted to all partners in the supply chain simultaneously. All of the businesses that have been able to successfully adopt e-business processes are currently reaping the benefits of doing so, which come in the form of increased efficiency and decreased error rates (Patel, 2021). To improve the level of cleanliness, a policy of requiring hand washing and prohibiting the use of bare hands has been implemented. In order to pass the quality test, each and every KFC location is required to follow these guidelines. These procedures also ensure that proper procedures for handling waste are followed.

• The Company should implement an automated quality assurance scheme, which will increase the regularity of assessments of the raw material quality attained from its suppliers. 

• This will allow the Company to improve the quality of its products, which will, in turn, improve customer satisfaction. This will also result in a general reduction in the costs associated with the quality assurance procedure. In a similar vein, quality assurance automation will guarantee that there will be no threat of unhygienic raw materials even in the event that the contracted suppliers are unable to meet the Q&A requirements. 

• KFC should revise the layout of its restaurants so that it is more accessible to customers who have mobility issues. KFC ought to make use of price discrimination as the primary pricing strategy that will cover populations with low incomes. 

• KFC should therefore establish low-priced outlets in areas where the majority of people have low incomes because the majority of people in many developing countries fall into this income category (Husna et al., 2020). 

KFC should implement a centralised inventory management system across all of its locations, as a large number of customers find it convenient to shop at KFC due to the popularity of its well-known brand. As a result, KFC is in a position to easily capitalise on the power of its brand to boost the Company's performance and profitability by penetrating new markets that are currently underserved. For instance, the Company could direct its marketing efforts toward populations with lower incomes.

Technology and Software

It is suggested that KFC offer its employees with sufficient training as well as a good information technology platform so that they can use tools to connect the knowledge that is stored in knowledge sources to benefit themselves. At the Operational Level of its outlets, KFC is able to use ROS technology to take in orders and notifying its chefs in the kitchen to work on the order that was placed. The majority of quick-service restaurants in today's society make use of a technology similar to this one, which is an example of an Internet Service (Uddin, 2020). The ROS technology is utilised to reduce the amount of time that passes between the taking of an order and the chef being informed of it. In this scenario, orders are taken at the counter, and the information is then automatically sent by the computer to the computer used by the chefs, which is located in the kitchen. The chefs then use this computer to complete the order.

Conclusion

KFC's quick service saves its customers' time, which in turn encourages them to return for more of the Company's offerings time and time again. KFC has a much higher rate of customer retention than its competitors, which is one of the primary reasons for the Company's tremendous level of commercial success. In addition to this, technological advancements have also been an important factor in KFC's continued success. The fact that the KFC Company is able to produce goods that are able to fulfil the requirements of its customers is one of the Company's many strengths. The fact that KFC has to consider how customers will feel about the products they sell is both a strength and a weakness for the Company because it gives them insight into what customers want. Anyone who has an interest in a company is considered a stakeholder in that Company. 

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