Global Supply Chain Management History Essay
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Published: Mon, 5 Dec 2016
Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime. Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named “Sanders Court & Café” and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state’s cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street. When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying. In 1940 Sanders devised what came to be known as his Original Recipe.[
The Sanders Court & Café generally served travelers, often those headed to Florida, so when the route planned in the 1950s for what would become Interstate 75 bypassed Corbin, he sold his properties and traveled the U.S. to sell his chicken to restaurant owners. The first to take him up on the offer was Pete Harman in South Salt Lake, Utah; together, they opened the first “Kentucky Fried Chicken” outlet in 1952. By the early 1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets in both the United States and Canada. One of the longest-lived franchisees of the older Col. Sanders’ chicken concept, as opposed to the KFC chain, was the Kenny Kings chain. The company owned many Northern Ohio diner-style restaurants, the last of which closed in 2004.
Sanders sold the entire KFC franchising operation in 1964 for $2 million USDSince that time, the chain has been sold three more times: to Heublein in 1971, to R.J. Reynolds in 1982 and most recently to PepsiCo in 1986, which made it part of its Tricon Global Restaurants division, which in turn was spun off in 1997, and has now been renamed to Yum! Brands. Additionally, Colonel Sanders’ nephew, Lee Cummings, took his own Kentucky Fried Chicken franchises (and a chicken recipe of his own) and converted them to his own “spin-off” restaurant chain, Lee’s Famous Recipe Chicken.
Today, some of the older KFC restaurants have become famous in their own right. One such restaurant is located in Marietta, Georgia. This store is notable for a 56-foot (17 m) tall sign that looks like a chicken. The sign, known locally as the Big Chicken, was built for an earlier fast-food restaurant on the site called Johnny Reb’s Chick, Chuck and Shake. It is often used as a travel reference point in the Atlanta area by locals and pilots.
KFC’s Supply Chain
A Supply Chain is a network of facilities including – material flow from suppliers and their “upstream” suppliers at all levels, transformation of materials into semi-finished and finished products, and distribute of products to customers and their “downstream” customers at all levels. So, raw material flows as follows: supplier – manufacturer – distributor – retailer – consumer. Information and money flows in the back direction. The balance between these 3 flows is what a Supply Chain is all about.
When there is a balance in the finished product ordering, the Supply Chain operates at its best. Any major fluctuation in the product ordering ways causes excess / fluctuating inventories, shortages/stock outs, longer lead times, higher transportation and manufacturing costs, amistrust between supply chain partners. This is called the Bullwhip Effect. Depending on the situation, the Supply Chain may include major product elements, various suppliers, geographically dispersed activities, and both upstream and downstream activities. It is critical to go beyond one’s immediate suppliers and customers to encompass the whole chain. For example, a diesel engine manufacturer may be able to integrate a GPS locator system into its engine control system. Its immediate customer, a heavy vehicle manufacturer, may see no need for this functionality. However, the downstream customer, a trucking company with a large fleet, may be very found off in a locator system. Understanding the value to the downstream customer is part of the SCM process.
The Cold Chain is necessary to maintain the integrity of food products and retain their freshness and nutritional value. The Cold Chain is an integral part of the Supply Chain. Setting up the Cold Chain involves the transfer of state-of-the-art food processing technologies by ‘Kentucky fried chicken’s and its international suppliers to pioneering Indian entrepreneurs, who have now become an integral part of the Cold Chain.
The term Cold Chain describes the network for the procurement, warehousing, transportation and retailing of food products under controlled temperature. ‘Kentucky fried chicken’s outlets store products to be used on a every day basis, within a temperature range of -18°C to 4°C. About 52% of the food products need to be stored under these conditions before they are used.
Vital Links in KFC’s Cold Chain
all suppliers adhere to Indian government regulations on food, health and hygiene while continuously maintaining ‘Kentucky fried chicken’s recognized standards. As the ingredients move from farms to processing plants to the restaurant, KFC’s Quality Inspection program (QIP) carries out quality checks at over 20 different points in the Cold Chain system. Setting up of the Cold Chain has also enabled ‘Kentucky fried chicken’ to cut down on operational wastage.
Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety that emphasizes prevention of illness or presence of microbiological data within ‘Kentucky fried chicken’s supplier facilities and the outlets rather than its detection through inspection. Based on HACCP guidelines, control points and critical control points for all KFC major food processing plants and outlets in India have been identified. The HACCP verification is done at least twice in a year and certified.
Triyaka Agriculture – Supplier of Iceberg Lettuce
Implementation of advanced agricultural practices has enabled Trikaya to successfully grow specialty crops like iceberg lettuce, special herbs and many oriental vegetables. Farm infrastructure features:
â€¢ A specialized nursery with a team of agricultural experts.
â€¢ Drip and sprinkler irrigation in raised farm beds with fertilizer mixing plant.
â€¢ Pre-cooling room and a large cold room for post harvest handling.
â€¢ Refrigerated truck for transportation.
Vista Processed Foods Pvt. Ltd.- Supplier of Chicken & Vegetable
A joint venture with OSI Industries Inc., USA, and Kentucky fried chicken India Pvt. Ltd. Vista Processed Foods Pvt. Ltd. produces a range of frozen chicken and vegetable foods. A world class infrastructure at its plant at Taloja, Maharashtra, has:
â€¢ Separate processing lines for chicken and vegetable foods.
â€¢ Capability to produce frozen foods at temperature as low as -35 Degree Celsius to retain total freshness.
â€¢ International standards, procedures and support services.
Dynamix Diary – Supplier of Cheese
Dynamix Diary has brought immense benefits to farmers in Baramati, Maharashtra by setting up a network of milk collection centers equipped with bulk coolers. Easy accessibility has enabled farmers augment their income by finding a new and potential market for surplus milk. The factory has:
â€¢ Fully automatic international standard processing facility.
â€¢ Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanized baby food.
â€¢ Stringent quality control measures and continuous Research & Development Amrit Food – Supplier of Milk & Milk Products (Frozen Desserts) Amrit Food, an ISO 9000 company, manufactures widely popular brands – Gagan Milk and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh. Its plant has:
â€¢ State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene.
â€¢ Installed capacity of 6000 liters per hour for producing homogenized UHT (Ultra High Temperature) processed milk and milk products.
â€¢ Strict quality control supported by a fully equipped quality control laboratory.
Radhakrishna Foodland – Distribution Centre
An integral part of the Radhakrishna Group, Foodland specializes in handling large volumes, providing the entire range of services including procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting. Salient strengths are:
â€¢ A one-stop shop for all distribution management services.
â€¢ Dry and cold storage facility to store and transport perishable products at temperatures up to – 22 Degrees Celsius.
â€¢ Effective process control for mini. distribution cost.
Kentucky fried chicken take great pride and care to provide customers with the best food and dining experience in the quick service outlet business. They believe eating sensibly, combined with appropriate exercise, is the best solution for a healthy lifestyle. Kentucky fried chicken offers a variety of menu items for those that want lower fat and lower calorie choices in their menu.
Kentucky fried chicken has always been committed to sourcing its requirements from local suppliers and farmers. This assurance is rooted in the philosophy of our company’s founder. He firmly believed in mutual benefits arising from a partnership between KFC and the local businesses, thus ensuring that Kentucky fried chicken commitment to growth was mirrored by that of its partners.
In keeping with this belief, KFC has carefully identified local Indian businesses that take pride in satisfying customers by presenting them with the highest quality products. Adherence to Indian Government regulations on food, health and hygiene is now a top priority.
Kentucky fried chicken India today purchases more than 96% of its products and supplies from Indian suppliers. Even our restaurants are constructed using local architects, contractors, labor and maximum local content in materials. The relationship between Kentucky fried chicken and its Indian suppliers is mutually beneficial. As KFC expands in India, the supplier gets the opportunity to expand his business, has access to the latest in food technology, and gets exposure to advanced agricultural practices and the ability to grow or to export.
All our raw materials too, have certifications from our suppliers to confirm that they comply with halal requirements. All in all, our commitment to halal underscores our commitment to putting “Customers First” in all that we do. To ensure that all our locally manufactured products conform to halal requirements, we implement stringent internal controls over raw materials, manufacturing and packaging. We are extremely careful to prevent cross contamination with filth or dangerous contaminants during the storage, preparation, handling, packaging and transport of our products. We also adhere to best practices to maintain the highest standards of quality and hygiene.
The secret recipe
The Colonel’s secret flavor recipe of 11 herbs and spices that creates the famous “finger lickin’ good” chicken remains a trade secret. Portions of the secret spice mix are made at different locations in the United States, and the only complete, handwritten copy of the recipe is kept in a vault in corporate headquarters. On September 9, 2008, the one complete copy was temporarily moved to an undisclosed location under extremely tight security while KFC revamped the security at its headquarters. Before the move, KFC disclosed the following details about the recipe and its security arrangements:
The recipe, which includes exact amounts of each component, is written in pencil on a single sheet of notebook paper and signed by Sanders.
The recipe was locked in a filing cabinet with two separate combination locks. The cabinet also included vials of each of the 11 herbs and spices used.
Only two executives had access to the recipe at any one time. KFC refuses to disclose the names and titles of either executive.
One of the two executives said that no one had come close to guessing the contents of the secret recipe, and added that the actual recipe would include some surprises.
On February 9, 2009, the secret recipe returned to KFC’s Louisville headquarters in a more secure, computerized vault.
In 1983, writer William Poundstone examined the recipe in his book Big Secrets. He reviewed Sanders’ patent application, and advertised in college newspapers for present or former employees willing to share their knowledge. From the former he deduced that Sanders had diverged from other common fried-chicken recipes by varying the amount of oil used with the amount of chicken being cooked, and starting the cooking at a higher temperature (about 400 °F (200 °C)) for the first minute or so and then lowering it to 250 °F (120 °C) for the remainder of the cooking time. Several of Poundstone’s contacts also provided samples of the seasoning mix, and a food lab found that it consisted solely of sugar, flour, salt, black pepper and monosodium glutamate (MSG). He concluded that it was entirely possible that, in the years since Sanders sold the chain, later owners had begun skimping on the recipe to save costs. Following his buyout in 1964, Colonel Sanders himself expressed anger at such changes, saying:
That friggin’ … outfit …. They prostituted every goddamn thing I had. I had the greatest gravy in the world and those sons of bitches– they dragged it out and extended it and watered it down that I’m so goddamn mad.
Ron Douglas, author of the book “America’s Most Wanted Recipes,” also claims to have figured out KFC’s secret recipe.
The famous paper bucket that KFC uses for its larger sized orders of chicken and has come to signify the company was originally created by Wendy’s restaurants founder Dave Thomas. Thomas was originally a franchisee of the original Kentucky Fried Chicken and operated several outlets in the Columbus, Ohio area. His reasoning behind using the paper packaging was that it helped keep the chicken crispy by wicking away excess moisture. Thomas was also responsible for the creation of the famous rotating bucket sign that came to be used at most KFC locations in the US.
KFC’s logo used from 1997 until November 2006
Early television advertisements for KFC regularly featured Colonel Sanders licking his fingers and talking to the viewer about his secret recipe, and by the 1960s both the Colonel and the chain’s striped bucket had became well-known. The bucket as product placement can be seen in the hands of both Annette Funicello and Dwayne Hickman in 1965’s How to Stuff a Wild Bikini, and was also featured prominently in the 1968 Peter Sellers vehicle, The Party. The Colonel made appearances as himself in Jerry Lewis’s The Big Mouth (1967), Herschell Gordon Lewis’ Blast-Off Girls (1967) and Al Adamson’s Hell’s Bloody Devils (1970), as well as an appearance in 1968 on Rowan & Martin’s Laugh-In.
Despite his death in 1980, Sanders remains a key symbol of the company in its advertising and branding.
The resurrected Kentucky Fried Chicken logo
One of KFC’s latest advertisements is a commercial advertising its “wicked crunch box meal”. The commercial features a fictional black metal band called “Hellvetica” performing live, the lead singer then swallows fire. The commercial then shows the lead singer at a KFC eating the “wicked crunch box meal” and saying “Oh man that is hot”.
In 2007, the original, non-acronymic Kentucky Fried Chicken name was resurrected and began to reappear on company marketing literature and food packaging, as well as some restaurant signage.
In 2010, an advertisement was shown in Australia showing an Australian cricket fan giving West Indies fans KFC chicken to keep them quiet. The ad sparked a debate over racism in the ad, suggesting that all black people eat fried chicken. Fried chicken was eaten by black slaves because it was cheap and easy to make. Though KFC stated that it was “misinterpreted by a segment of people in the US”, the ad was later pulled from TV. However, several Australian commentators have expressed the opinion that the ad is not racist, because this is not a racial stereotype in Australia and the cricket fans in the ad are not African American, but West Indies cricket supporters (the West Indies Cricket Team was playing a Test cricket series against the Australian Cricket Team at the time of the ad).
KFC in the US has been accused by Greenpeace of a large destruction of the Amazon Rainforest, because the supply of soy used for chicken food that KFC receives from Cargill has been traced back to the European KFC. Cargill has reportedly been exporting soy illegally for several years. The Greenpeace organization researched the issue and brought it to the attention of the parent company YUM! Brands, Inc. The parent company denied the illegal operation, and said that their supply of soy is grown in parts of Brazil. Greenpeace has called on KFC to stop purchasing soy from Cargill, to avoid contributing to the destruction of the Amazon.
In 1971, Sanders sued Heublein Inc., KFC’s parent company at the time, over the alleged misuse of his image in promoting products he had not helped develop. In 1975, Heublein Inc. unsuccessfully sued Sanders for libel after he publicly referred to their gravy as “sludge” with a “wallpaper taste”.
In May 2007, KFC (Great Britain) requested that Tan Hill Inn, in the Yorkshire Dales, North Yorkshire, UK refrain from using the term ‘Family Feast’ to describe its Christmas menu, although this problem was quickly resolved with the pub being allowed to continue use of the term.
Wages and working conditions
Balmoral KFC workers and allies picketing the store
Like many fast food outlets, KFC employs a high proportion of young, unskilled workers, at or just above minimum wage, and its workers are not unionized. In New Zealand, KFC youth workers earn NZ$10.13 an hour. Staff at the Balmoral, Auckland store went on strike for two hours Restaurant Brands, the franchise holder, offered no wage increase in contract negotiations. Restaurant Brands agreed to phase out youth rates in New Zealand, although no date was set.
Many stores in western Canada are unionized with the Canadian Auto Workers, and as a result many non-franchise stores in western Canada pay higher than minimum wage.
Protesters demonstrating outside a KFC restaurant in Royal Oak, Michigan
Since 2003, animal rights and welfare organizations, led by People for the Ethical Treatment of Animals (PETA), have been protesting KFC’s treatment of the animals used for its products. These groups claim that the recommendations of the KFC Animal Welfare Advisory Council have been ignored. Adele Douglass, a former member of the council, said in an SEC filing reported on by the Chicago Times, that KFC “never had any meetings. They never asked any advice, and then they touted to the press that they had this animal-welfare advisory committee. I felt like I was being used.”
KFC responded by saying the chickens used in its products are bought from suppliers like Perdue Farms, Tyson Foods, and Pilgrim’s Pride, and that these suppliers are routinely monitored for animal welfare violations. Several PETA undercover investigations and videos of these and other KFC suppliers purporting to show chickens being beaten, ripped apart, and thrown against walls contradict KFC’s claims. PETA has criticized some of the practices of chicken breeders, such as beak trimming and overcrowding, but KFC says its suppliers meets UK legal requirements. The Department for Environment, Food and Rural Affairs recommends a maximum stocking density of 34 kg-around 30 chickens-per square meter, and say that in circumstances where beak trimming needs to be carried out to prevent the birds injuring each other, only one third of the beak should be trimmed “measured from the tip towards the entrance of the nostrils”. PETA states that they have held more than 12,000 demonstrations at KFC outlets since 2003 because of this alleged mistreatment of chickens by KFC suppliers.
In June 2008, KFC Canada agreed to PETA’s demands for better welfare standards, including favoring suppliers who use controlled-atmosphere killing (CAK) of chickens, and other welfare standards as well as introducing a vegan sandwich at 65% of its outlets. PETA has called off its campaign against KFC Canada, but continues to demonstrate against KFC elsewhere in the world.
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