What can manufacturers learn from the KFC chicken shortage?

Posted on 23 Feb 2018 by The Manufacturer

As KFC stores across the UK begin to reopen following the chicken shortage, Tim Bound, director at Transtherm Cooling Industries, examines what manufacturers can learn from the fast food chain’s crisis.

Kentucky Fried Chicken Restaurant Sign - KFC Chicken Shortage - image courtesy of Depositphotos.
KFC put out a tender for the supply and distribution of food products and packaging for its UK stores last year- image courtesy of Depositphotos.

Up to 80% of KFC’s stores were closed at the peak of this week’s chicken shortages after the Colonel switched its delivery contract from Bidvest to DHL.

Never mind the secret recipe of 11 herbs and spices, it seems KFC should have been paying more attention to the chicken itself.

But there is more to this story than wondering what to eat in place of our Saturday night family bucket.

The problems started when KFC put out a tender for the supply and distribution of food products and packaging for its UK portfolio of more than 850 stores last year.

It’s a familiar story, in any industry. Despite what seemed like a smooth operation from incumbent supplier Bidvest, KFC opted for a lower cost solution in DHL, working alongside specialist foodservice logistics provider QSL.

But as we have seen all too often, price alone doesn’t tell the whole story.

Despite warnings from GMB union, KFC was happy to drop from a supply system based on six warehouses run by Bidvest to a system of one distribution centre in Rugby run by DHL. It has since been reported that Burger King also switched Bidvest for DHL six years ago and within six months were “pleading” to Bidvest to have them back, to quote Mick Rix, the GMB’s national officer.

From fast food to cooling technologies

So why am I, director of a company which designs and manufactures energy efficient cooling technologies for a wide range of industries, commenting on the fast food industry?

Because it’s an all too familiar story which applies as much to chicken as it does to pipes, IT software, heating equipment, adiabatic coolers or any other product which is supplied to manufacturers.

In the same way that KFC had its head turned by DHL’s “revolutionary” distribution service, it is not uncommon for manufacturers to be given misleading figures on efficiency, noise or performance by less scrupulous competitors and have no reason to doubt it.

An inferior cooling system, for example, might not dissipate all of the heat it is expected to, which could cause the system to work less efficiently or even trip out.

In many cases we also find suppliers quote unverified noise levels from component fan manufacturers, without taking into account the casing or external factors such as walls – all of which leads to a far noisier system than was originally promised.

(Dis)proven performance

Thankfully when it comes to cooling technologies it is easy to disprove the stated performance of a system from technical data.

Even when we prove that low-cost equipment is not capable of meeting the promises made to specifiers, some still take the cheap option because “if it doesn’t work, we’ll just refer back to their original figures and take legal action.”

But often by then production has been affected, maintenance costs have rocketed and orders have not been fulfilled.

To be clear, I am not against competitive pricing and am a firm advocate of healthy competition, but it is only right that any options being put forward to customers should first and foremost be fit for purpose.

At Transtherm, we pride ourselves on our integrity and on offering the best possible pricing for equipment that customers can have complete trust in.

However, sometimes in order to retain that integrity, it means stopping short of saying yes when you should be saying no and being honest about the limitations of your product and service.

As KFC discovered, making the wrong decision can lead to huge financial cost and reputational damage, impacting productivity and profitability, not to mention still having to replace the equipment or service that let you down in the first place. Is it worth taking the gamble?

Tim Bound is director at Transtherm Cooling Industries – a Coventry-based designer and manufacturer of adiabatic cooling, dry air cooling, and air cool condensers.