KFC changed its delivery contract from Bidvist to DHL Supply Chain © PA Images
KFC changed its delivery contract from Bidvist to DHL Supply Chain © PA Images

KFC branches close after delivery contract switch

posted by Su-San Sit
19 February 2018

Delivery giant DHL has issued an apology after a number of KFC branches were forced to close after it failed to deliver chicken to UK stores.

Last week KFC, which has more than 900 outlets, switched its delivery contract from South African-owned distribution group Bidvest to the German-owned DHL Supply Chain.

But soon after the changeover many branches began running out of chicken products.

Signs were placed on the doors of affected KFC branches over the weekend informing customers that the restaurants had been forced to close due to “a few hiccups with the delivery today”.

Closures have been reported in areas including London and the South East, the Midlands, East Anglia, the North East and Wales. 

DHL said “operational issues” were behind the supply disruption. 

“Due to operational issues, a number of deliveries in recent days have been incomplete or delayed,” it said.

“We are working with our partners to rectify the situation as a priority and apologise for any inconvenience.”

KFC blamed the shortage on “teething problems” associated with their new delivery partner. 

“We’ve brought a new delivery partner on-board but they’ve had a couple of teething problems – getting fresh chicken out to 900 restaurants across the country is pretty complex,” it said. 

“We won’t compromise on quality, so no deliveries has meant some of our restaurants are closed and other are operating a limited menu or shortened hours.”

A KFC spokesman said software issues were to blame for the situation. 

“We became aware of the issue on Friday and although initially triggered by a software issue, due to the complexity of our supply chain, we’ve seen a knock-on effect to the wider implementation system,” he said.

“Our teams are working flat out all hours to get us back up and running as soon as possible – but it is too early to say how long it will take to clear the backlog.”

In October 2017, DHL Supply Chain was chosen to operate KFC’s UK perishables supply chain with specialist logistics operator QSL.

At the time KFC said DHL would manage the warehouse and distribution service and introduce an optimised delivery schedule to provide faster turnaround of orders, allowing for “even fresher products on arrival in KFC restaurants”.

QSL would control demand planning and stock management via its dedicated IT software, as well as managing operational purchasing and accounting for KFC operations.

Speaking to SM, Andrew Black, principal at procurement consultancy Efficio, said the issues most likely stemmed from DHL miscalculating the volume required to complete a complex order. 

“I think what’s likely to have happened here is that KFC has switched to DHL on the back of presumably a more compelling commercial offer, without going through the proper testing or making sure they have the proper capacity to ensure they [DHL] can deal with the volume required,” he said.

“I can envisage here that they probably did a very simple calculation where they said, ‘We need X volume of birds a day and we have a certain number of trucks that can meet that requirement’, but the supply chain is much more complex than just distribution. 

“What needs to be done now is DHL has to do some proper analysis of the capacity requirements and get a clearer understanding of what KFC’s end-to-end supply chain looks like or KFC will have to go back to their original delivery partner.”

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