KFC reverts to original distributor after chicken crisis - Supply Management

KFC reverts to original distributor after chicken crisis

9 March 2018

KFC has reappointed its original chicken distributor for some of its UK restaurants after a botched delivery deal with DHL forced the temporary closure of hundreds of outlets last month.

Yesterday, the fast food giant announced it had signed a new long-term deal with Bidvest Logistics, its previous delivery partner, to supply 350 outlets in the north of the UK.

Bidvest Logistics lost out after its contract was put out to tender last year, with KFC deciding to overhaul its UK supply chain and awarding the contract to logistics service DHL Supply Chain.

At the time, KFC had boasted the partnership with DHL and its software provider QSL would “deliver a new level of service”, while DHL said it would “re-write the rule book”.

However, last month, Yum Brands-owned KFC was forced to temporarily shut hundreds of its 900 UK restaurants after “operational issues” at DHL left a backlog of chicken at the delivery group’s sole UK warehouse in Rugby.

It led to a shortage of the chain’s key ingredient as well as other menu items, including fries, coleslaw and gravy, prompting questions as to why it had tried to implement the change to a new supplier with a single, new and untested distribution centre without any contingency plans in place. 

A KFC spokesperson said after “working hard to resolve the present situation” a decision had been made in conjunction with QSL and DHL to revert the distribution contract for up to 350 of its restaurants in the north of the UK back to Bidvest Logistics.

“The decision will ease pressure on DHL’s Rugby depot, to help get our restaurants back to normal as quickly as possible. As it stands, over 97% of our 900 restaurants are now open for business, although there will be some limited menus before we are back to business as usual,” they said.

The spokesperson added that the company would continue to operate with QSL and DHL for the remainder of its restaurants in the country.

Meanwhile, Paul Whyte, Bidvest Logistics business unit director, confirmed the company would “provide renewed supply” to KFC from 26 March. 

“We are delighted to welcome KFC back to Bidvest Logistics. As the UK’s leading food service logistics specialist we understand the complexities of delivering fresh chicken … we will provide them with a seamless return to our network,” he said.

A DHL spokesperson said that together with its partners it remained “fully committed to delivering excellent service to KFC’s remaining 550 restaurants across the UK”.

John Perry, managing director of consultancy Scala, said: “It puts DHL in a difficult position, as it is effectively being bailed out by a competitor, but it is also potentially harmful to its reputation and the success of winning other business. Splitting the operation between suppliers at this stage, after implementation, raises the question again as to why the transition from Bidvest to DHL wasn’t phased in and whether the proposed solution can be made to work.”

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