What KFC’s chicken shortage teaches us about effective supplier sourcing
But when delivery problems...
When KFC switched its delivery contract to DHL, chances are it didn’t foresee the supply chain disaster that would follow.
But when delivery problems meant that around half of its UK stores didn’t have enough chicken and had to close temporarily, the fast food chain was reported to face a loss of £1mn a day. And that’s not to mention the big PR issue it now has on its hands.
Large businesses changing the logistical company that manages their deliveries are bound to face a few blips when the transition is still new.
But clearly the closure of so many stores is far more than a mere blip and many will be questioning whether KFC adequately prepared the ground with the new supplier to take over this business-critical service.
Businesses can mitigate risks in their supply chain selections, provided they put effective sourcing practices in place, such as:
Risk identification: if you’re switching suppliers, particularly one that delivers a critical service such as your logistics, identifying risks before they escalate and cause major problems is essential to effective sourcing. The would-be supplier should be briefed as part of the tendering process so that they can provide a water-tight transition plan. The procurement team should seek reassurance that areas vulnerable to error are addressed as they change supplier, ensuring that such risks are mitigated.
Cultural fit: it’s key to establish how a new supplier works and whether that fits into your own ways of working, in order to ensure a smooth and productive relationship. And that includes ensuring that both of your company values are compatible with each other, e.g. you might prioritise quality products and services over speed, and you can only ensure this if your supplier can deliver according to the same ethos.
Experience: does your would-be supplier have proven experience in your market, or can they provide cases of similar scale and complexity? Asking for references helps you establish a supplier’s capability and credibility, and given that it comes from a customer’s perspective you’ll know that the testimony isn’t a selling ploy. Asking for evidence of previous projects can help you establish whether the supplier can deliver in the areas that are key to you.
Flexibility: as your business changes, so do your requirements from a supplier. You can only ensure that business growth doesn’t mean a blip in your supply chain if your suppliers can respond quickly to changes, whether that’s a higher number of orders or new types of products. How can a supplier be measured on this in sourcing?
Gartner: Women in supply chain at five-year high
Women now represent a greater percentage of the supply chain workforce than at any other point in at least the past five years, according to a recent Gartner survey.
The Women in Supply Chain Survey 2021, conducted by Gartner and Awesome, surveyed 223 supply chain organisations with more than $100m in annual revenue from February through to the end of March 2021.
- Women represent 2% more of supply chain workforce than in 2020
- Women now account for 42% of the workforce
- Number of women in exec-level positions declined by 2%
- Just 15% of top leadership are women (17% in 2020)
- 84% of organisations say COVID-19 did not impact efforts to advance women
It found that women now represent two per cent more of the supply chain workforce than in 2020, accounting for 42%, compared with 39% last year. Dana Stiffler, Vice President Analyst with the Gartner Supply Chain practice, says the impact of COVID-19 on supply chain was significant, though different to other sectors.
"Contrary to other industries, supply chain’s mission-criticality during the COVID-19 pandemic has meant that many sectors did not reduce their workforce, but rather continued to hire and even faced talent shortages, especially in the product supply chains," she said. "This resulted in many women not only standing their ground in supply chain organisations but increasing their representation in organisations. We also recorded a record number of specific commitments and supply chain-led actions and saw existing programs starting to pay off."
Supply chain still lacks women in executive leadership
But the elephant in the boardroom remains. Though the figures present a positive step towards greater diversity and gender equality at all levels, the number of women in executive level positions declined by two per cent in the past year. Women represent just 15% of the upper echelons of supply chain leadership. Gartner did however record a rise in women at all other levels of leadership.
The vast majority (84%) of organisations surveyed said the outbreak had no discernible impact on their ability to retain and advance women. But more than half (54%) admitted that retaining mid-career women was becoming increasingly difficult. A lack of career opportunities was cited as the biggest challenge to this, while other blamed a lack of development opportunities.
Despite these challenges, companies of all sizes are becoming broadly better at gender diversity. Around a third more said they had a targeted initiative focused on attracting women and advancing their careers.
Stiffler said a push towards measurable and formal initiatives is at least pointing in the right direction: “It's encouraging to see that the larger share of this jump was for more formal targets and specific goals on management scorecards. For these respondents, there is greater accountability for results — and we see the correlation with stronger representation and inclusion showing up in pipelines.”