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PROJECT

OPERATIONS MANAGEMENT

PROJECT HEAD: SIR FARRUKH


SUBMITTED BY: SHAZZA ZUBAIR
BBA-05
ROLL NO#09

ACKNOWLEDGEMENT

This project is a pure effort , I thank ALLAH ALMIGHTY that he


gave me a strength and ability to perform my duties in a proper
manner. Also, this acknowledgement would remain in complete
without thanking the staff of KFC Islamabad and Peshawar for their
whole-hearted and kind co-operation. I dedicate this effort to my
extremely dedicating teacher SIR FARRUKH

TABLE OF CONTENTS

INTRODUCTION

i.
ii.
iii.
iv.

History
Strategy
Target market
Products

CURRENT OPERATIONS
i.
ii.
iii.
iv.

Inventory management
Supply chain management
Just in time
Operational management

Summary
Conclusion
Recommendations

INTRODUCTION
COMPANY PROFILE
KFC Corporation
based in Louisville, Kentucky, is the world's most popular chicken restaurant
chain, specializing in Original Recipe, Extra Crispy, Kentucky Grilled Chicken. Every day, more
than 12 million customers are served at KFC restaurants in 109 countries and territories around
the world. KFC operates more than 5,200 restaurants in the United States and more than 15,000
units around the world. It is the worlds largest and most well known chicken restaurant, with
chains in more then 10 thousand locations and worldwide in 80 countries. KFC and its franchised
employees are more than 200 thousand, all over the world. KFC is world famous for its Original
Recipe fried chicken -- made with the same secret blend of 11 herbs and spices Colonel Harland
Sanders perfected more than a half-century ago. Customers around the globe also enjoy more
than 300 other products -- from Kentucky Grilled Chicken in the United States to a salmon
sandwich in Japan

PARENT COMPANY
CUPOLA PAKISTAN
Cupola
is a Dubai based multinational company and has been at the forefront of development in
Food & Retail sector for over a decade. Its flagship brand KFC has amassed itself as the
dominant concept in the Quick Service Restaurant (QSR) business in the country

KFC PAKISTAN
Food, fun & Festivity, this is what KFC is all leading the market since its inception;
KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel sanders
secret original recipe chicken or the hot & spicy version, every bite brings a yum on our face. At
KFC they say,
We do chicken right

KFC STRATEGY
Its primary objective is to take advantage of the potential growth in other
countries. To establish a strong position and to develop their image .key success factors are
Continuing cost saving through R&D
Use of new technology and innovation to work efficiently
Their key factors will lower the cost and increase profit industry.

TARGET MARKET
KFC targets HUNGER ,and we know there are no compromises when it
comes to HUNGER

PRODUCTS OF KFC
KFC Pakistan provides 100% Halal and Hygienic products to its
customers. It offers a variety of finger-licking products, some of which are as follows:

Kentucky fried chicken


Zinger burger
Krushers
GameBox
Twister
Boxmaster
Chicken Bucket
Hot wings
Fries
Corn on the cob
Zing Kong
Snacker(chicken & veggie)
Veggie Feast
Soft Drink
Coleslaw
Chicken Thali
Veg Finger
Snack Box
Sundae
Soft Twirl
Brownie Sundae

ORGANIZATINAL STRUCTURE

CURRENT OPERATIONS
KFC SUPPLY CHAIN
SUPPLIERS IN PAKISTAN
There are two categories of suppliers.the DRY FOOD
SUPPLY and the FROZEN FOOD SUPPLY. For a dry food supply like a burger bun
they have established their own warehouses .where as for frozen food chicken they
have agreement with K &N chicken for suppling chicken and fish is supplied by
Thailand and spices are supplied by dubai to all over restaurants in Pakistan.
-

WAREHOUSE
Pakistan is divided into two areas, namely North and South. The area below
Multan falls under the southern region whereas, Multan and the area above it falls under North
region. Each region hence has its own warehouse. The North region has its warehouse in Lahore.
The south region has its warehouse in Karachi
.
PROCUREMENT
Monthly budgets are made to plan purchasing activities. These comprise of
dividing the allocated budget into the inventory policies already defined at the warehouse from
past data and experience. FIFO method is used for all items for the inventory at the warehouses.

Chicken
Chicken is supplied by K&Ns in customized cut, packed and labeled packets directly to
the warehouses in each region. Labeling is necessary for inventory management and efficiency.
KFC gives a lead time to K&Ns of one week for them to deliver their order. The chicken arrives
in special freezer fitted van which keeps the chicken frozen while it is being transported. The
Supply Chain Management different types of pieces ordered by the warehouse are in baskets of 5
square feet and having a height of 8 inches. The vehicles used for this are small trucks which
have a maximum loading capacity of five tons.
Sauces
Unilever (Yum) provides all the sauces needed by KFC such as Ketchup, Chilly Sauce,
Mayonnaise, Tartar Sauce etc. Yum is a brand especially made for KFC and cannot be sold in
the market to the customers. These are delivered directly to each warehouse
by Unilever themselves. The lead time for this operation is about two weeks.
Spices and herbs
These are imported directly from Dubai and Singapore. The lead time for these exceeds two
months as these are not perishable items and it takes a lot of time for transportation. All imports
are done through sea in dedicated 20 containers for KFC.
Packing Material
This is purchased from local parties namely Afeef Packaging, AAA and Gold Packages. Due to
frequent re-designing of boxes and deals offered by KFC, the inventory of these is kept at a
minimum.
Bread and Buns
Supply Chain Management Since the last 4 or 5 years KFC has been producing
their own buns in their own bakery. Their plant is located at Sohrab goth, Karachi.

Fish
Information was not provided. Internationally, fish is bought from Thailand. But in Pakistan,
fish is bought from local vendors as it is a low selling item.
French Fries
These are imported directly from America. They are also imported to Pakistan by Yum
company through china where they also come from America.

STORAGE AND INVENTORY


MANAGEMENT
Chicken
Inventory of chicken is for 15 days. The storage area for chicken is not in the warehouse
itself but in a separate cold storage area built right beside the warehouse in each region. Before
marinating, the chicken is stored in an organized form in six separate cold storage rooms whose
area is around 45 to 50 square feet, having a height of around 7 feet. The chicken is stored in the
same baskets which it comes in and stays there till its turn for marinating. Marination is done in a
separate room in the same cold storage facility where the chicken is first washed and mixed with
the herbs and spices it needs. The mixture is fed into a machine known asTumbler
which marinates it. After this is done the chicken is re packed into labeled clear

Supply Chain Management plastic bags with stickers on them showing the description of the
item inside it and the expiry for it. These bags are then put into a separate cold storage room,
again in an organized form.
Sauces
Inventory for Sauces are stored for around 25 to 30 days depending on the forecasted sales
and the expiry dates for each.
Spices and Herbs
Inventory for these are stored according to forecasted sales and the three months
lead time given by the procurement department.
Bread and Buns
Buns are provided directly to the branches at KFC from the factory after every 4
days.There is a weekly audit of every single inventory item at the warehouse to match it with the
numbers in the system as deviations are high due to high replenishment cycles.

ZONAL DISTRIBUTION
Distribution is done on need basis. The cities are divided into zones and the routes taken are
accordingly. Karachi is divided into 3 zones:
Zone 1:
Gulshan-e-Iqbal and Gulistan-e-Johar
Zone 2:
Clifton and Defence
Zone 3:
Bahadurabad, Tariq Road and Sindhi Muslim SocietyDaily 5 to 6 vehicles are dispatched from
the south warehouse for the interior Sindh (15 daysinventory) and Zonal distribution in Karachi
(1 week inventory for normal-storage and 2 day inventory for cold-storage goods)

Vehicles
Company:
Hyundai Shehzore
Quantity:
4-5
Company
Hino Dutro Truck
Quantity:
4-5
Gross vehicle weight
8.90 tons
Maximum capacity:
4 tons (reduced from 5 tons because of modifications

QUALITY ASSURANCE
here are multiple ways by which KFC assures the quality of its
products. Some of the ones which were disclosed to us were:

Surprise visits to branches

Planned visits to branches

Rigorous raw material inspection

Customer feedback

SOFTWARE
MRP/ERP
The company uses Supply Chain Management (SCM) Software to manage its inventory acrossits
whole supply chain. This software has been developed by Siddhat Haider. There is
a weekly physical count of the inventory to tally it with the figures in the software

JUST IN TIME SYSTEM


In controlling inventory and most importantly quality of the chicken,
Kentucky Fried Chicken uses a variation of Just In Time (JIT) system, by receiving chicken two
to three times a week. KFC starts to operate when a delivery truck arrives at the back door. The
truck usually contains chicken, vegetables, and other needed materials to successfully operate a
KFC restaurant. There are many steps involved in the successful unloading of a delivery
truck. Frozen foods are taken off the truck first and immediately transferred to the freezer. This
includes vegetables, deserts, and other food products. Next to be unloaded is the refrigerated
goods. This is the part of the process where the world famous chicken is unloaded. Finally, the
dry good and condiments are unloaded and stored in their appropriate Place.
The chicken is received with a kill date. The kill date represents the date the chicken was
actually butchered. This kill date is also used as a measure of the freshness for the
chicken. When taking the chicken off the truck it is placed on the chicken-side of the isle next
to the refrigerator to prevent warming until it can be placed inside. Once the truck is unloaded,
the refrigeration unit inside the truck must be inspected for satisfactory working order. For
inventory accuracy all pieces aboard the truck are counted and checked against the bill of
lading. Any shortages or surpluses are noted and called in to franchise headquarters. The cases
in which the chicken arrives in must be damage free. This includes the box being sealed as well
as being structurally stable. Any damages must be noted and relayed to the shipping
agency. The kill dates must be checked on each individual chicken. No chicken will be
accepted if it is received six days past the kill date. Printed with the kill date on each chicken is a
label stating Inspected for Wholesomeness by the U.S. Department of Agriculture which must
be attached or the chicken must be rejected. Acceptance sampling is done to ensure quality of
the chicken during each shipment. At random at least five cases are selected, based on quantity
of order. The middle bag of chicken is always used in each case for sampling purposes. To
check for quality, a thermometer is used to check the temperature of the chicken by inserting it
into the thickest part along the bone. Acceptable temperature is between twenty-eight and thirtysix degrees Fahrenheit. If one chicken fails to meet the quality inspection then the entire lot must
be rejected. Upon rejecting a lot the market manager and or the franchise supervisor must be
notified immediately. This is necessary to arrange for an immediate shipment to be
scheduled. This is important due to the inventory control system in place to ensure quality to
every customer. Once the sample testing is complete the chicken can be placed in the
refrigerator. First In First Out (FIFO) Method is used in placing the chicken in order in the
refrigerator. The earliest kill date is located at the front of the cooler such that it is the first one
to be used when needed. This guarantees quality and freshness to each customer.

Conclusion
After analyzing KFC's operation and procedures it appears to be an effective and efficiently ran
restaurant. Customer relations are important assets to KFC, which builds repeat business and
reinforces their reputation as the leader in the chicken industry. As far as recommendations we
feel KFC needs to persevere with its already implemented procedures and continue to listen to
customer needs to ensure their success as an industry leader.
Recommendations

Even though it has defined the target market but stil need to redefine it
KFC has to improve its R &D
KFC has to look ahead for its health conscious customers
They only focus high income level

REFERENCES

KFC ISLAMBAD

http://www.kfcpakistan.com/