Operations Management for KFC. Case Study

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Developing and delivering services and products to clients relies significantly on effective systems of interconnected processes and facilities and the efficiency of managing these aspects globally. Operations management concerns ensuring that services and goods are developed and successfully delivered to the target consumers (Collier & Evans, 2017, p. 3). As the previously cited literature elaborates, operations management entails different activities, including forecasting, supply chain management, facility layout, and design, selecting the desired technologies, quality management, purchasing, process, and job design, scheduling, and sustainability. Notably, each of the identified operations management elements plays a central role in promoting efficiency in product and service development and channeling them to the consumer.

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The Industry Context

Consumers are growing demanding how they wish to obtain preferred products and services in today’s ever-changing global environment. Businesses have developed a mechanism of dealing with the trend, preferring to adopt mass customization. According to Tseng and Jiao (2014, p. 684), mass personalization refers to an immediate, low-cost product and service development designed to meet changing, peculiar customer needs. Fundamentally customization permeates almost all industrial and economic sectors, including fast food.

Fast-food chains have adopted different strategies to respond to the growing mass customization and consumer preference trends. For instance, according to extant studies, such as Hwang, Kim, and Lee (2021, p. 110), most companies have adopted kiosks across their stores to allow consumers to customize their orders at their convenience. The previously cited literature reports that booths are revolutionary because they limit confusion in the order processing stage associated with physical communication with cashiers. Usually, cashiers would collect client order requests and payments but fail to deliver accurate information to the kitchen, considering the heavy workloads they must handle within the shortest time possible. The introduction of kiosks improves the ordering process, allowing customers, especially the demanding ones, to make their preferred combinations privately and get what they wish without minimal inconveniences. Therefore, kiosks have improved operations management for fast-food businesses, but they are yet to attain universal application, considering their technological requirements may be beyond some companies’ reach (Hwang, Kim, & Lee, 2021, p. 113). Despite their slow adoption, kiosks bring the prospect of mass customization close to the fast-food industry.

The Case Study of KFC

Kentucky Fried Chicken, KFC, is among the leading fast-food companies in the United States with a global presence in numerous other overseas destinations. The business is concerned with effective operations management to ensure it satisfies its ever-growing number of customers. While different aspects can be used to analyze KFC’s operations management efficiency, the continuous improvement concept is the most suitable. According to Uddin (2021, p. 173), KFC strives to engage clients by delivering products made to their tastes. Understandably, it is impossible to customize every client’s needs into the production process, explaining why management at KFC focused on continuous improvement.

Besides the novelty of kiosks, KFC is always trying to satisfy customers through its menu. Precisely, the fast-food chain incorporates vegan and meaty diets to cater to different client tastes, an increasingly popular strategy for most other businesses in the sector (Uddin, 2021, p. 175). The company invests significantly in consumer market research to understand the local preferences. The findings from these studies have helped the company provide various recipes, each designed to meet specific client demands. Coupled with the kiosk idea, KFC is always positioned to satisfy its customers.

Process Map of Order Fulfilment Process

Order processing is among the most critical aspects of a fast-food company’s operations. Notably, most clients express their dissatisfaction or satisfaction with the quality of services received, basing their perceptions on their experiences with the order fulfillment process (Collier & Evans, 2017, p. 5). Figure 1 presents a typical order fulfillment map for fast-food firms worldwide. According to figure 1, order processing is a complex process, beginning with the customer’s entry at the stores and ending with them leaving after being satisfied. Customers must wait in line and read the menu before placing their orders with cashiers who undertake other formalities before communicating with the kitchen staff. The kitchen staff then coordinates with other concerned staff, including the waiters and waitresses, to deliver the ordered products to the customer once it is determined that the process has met all prescribed procedures.

Order Fulfilment Process for Fast-Food Companies, Adapted from Duong
Figure 1: Order Fulfilment Process for Fast-Food Companies, Adapted from Duong (2021, p. 1).

Figure 1 reveals that the order fulfillment process is always complex, implying that delays could result from the slightest operational glitches possible. Therefore, fast-food businesses, such as KFC, must streamline their operations management to minimize challenges to the flow of information among all the stakeholders involved in the process.

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The Supply Chain Management Case

Supply chain systems play a critical role in facilitating seamless operations for companies across different industries. Most fast-food brands operate in more than one location worldwide, with some, such as KFC, having a global presence in more than 100 countries (Uddin, 2021, p. 173). The diversity of operational locations creates the need to facilitate supply chain efficiencies to minimize delayed or disrupted production and delivery of services and goods to the target market. KFC works closely with its suppliers to ensure a coordinated, smooth flow of goods into and out of its production line. The company uses different strategies to foster healthy relationships with suppliers, including annual awards and rewards to the most outstanding performers.

Technological transformations, including the emergence and proliferation of big data solutions, contribute significantly to KFC’s successful supply chain management activities. Precisely, the company depends on supplier and consumer data to streamline its supply chain, depending on its just-in-time inventory management strategy that saves costs while maximizing client satisfaction. Usually, according to Collier and Evans (2017, p. 4), the just-in-time model ensures that KFC, as do other businesses, obtain and store only the specified inventory to meet the customer demand stream.

Resource and Capacity Management

Resources are critical to many operations’ success, explaining why fast-food companies strive to attain the highest levels of resource capabilities. Resource requirements are diverse, ranging from labor, material, equipment, and labor to labor. KFC understands the implications of having the suitable resource base for its operational efficiency. Consequently, the management concentrates on keeping the most motivated staff across the industry. While many strategies are used to achieve the motivation, the stimulus derives from KFC’s tendency to provide the right resources when its employees need them to facilitate smooth operations.

Relationship between Service Quality and Profitability

A growing number of researchers are concerned with the direct relationship between service quality and profitability. For example, global firms measure the efficiency of adopted marketing strategies against the value generated in sales (Zeithaml, 2017, p. 68). Companies also understand that a similar nexus exists between the quality of products and services offered to clients and the enjoyed profitability levels. For example, clients perceive high-quality products as being worth premium expenditures, meaning that they are willing to pay higher prices for better-quality offerings. Therefore, businesses across the spectrum strive to improve quality to improve the brand appeal and grow their profits through improved sales.

The Case Study of KFC

Fast-food industries, such as KFC, comprehend the role of quality in profitability, explaining their commitment to improving customer experiences through this strategy. Notably, KFC is famous worldwide for its unique, delicious recipes. Clients associate KFC’s amazing fried chicken recipes customized to meet diverse customer preferences as the best competitive strategy (Uddin, 2021). According to the latter cited literature, KFC strives to blend exotic recipes with local ones to improve client experience, making it one of the strongest fast-food brands worldwide. Consequently, the company has been growing its sales volume over time, expanding to untapped markets, such as new locations in Africa, Asia, and the Americas, directly increasing its sales volume and profitability.

Operational Challenges

Operations management is continuously transforming, and corporate leaders must stay abreast of the issues likely to characterize the future workplace. While many other challenges have been reported, this sector discussed the most discussed.

Customers

The changing global environment means that customers are increasingly becoming challenging to manage. According to the extant literature, especially Collier and Evans (2017, p. 23), clients are growing their demand for high-quality services and products with improved and new features delivered within the shortest timeframes possible. Notably, consumers also place new orders on companies to accompany their high-quality products and services with outstanding support and service. Therefore, firms, including KFC, understand that they must act promptly yet keenly to minimize losses and damage their brand reputation, especially when they face problems.

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Technology

Technologies continue evolving rapidly, placing new demands on businesses worldwide to steady their investment in this area to continue benefiting their models. Technological developments keep influencing product designs while transforming the service delivery model for global brands. Companies comprehend the new challenge of customizing their services and products to meet individual clients’ needs. Yet, most of them realize that they cannot match the abilities of the most established corporations in doing so. Notably, technological capabilities create gaps in performance for global companies, which KFC and other businesses must address to continue their profitability models.

Recommendations

The reported challenges place new demands on companies in the fast-food sector to evolve their operational strategies to improve their ability to satisfy clients. Notably, the unique needs have far-reaching brand reputation implications for businesses, especially KFC, calling to action revolutionary technological adoptions. Precisely, management at KFC may want to improve its technical capabilities, especially in data analytics, to leverage client satisfaction. Accordingly, data analytics helps companies understand their markets better, drawing them closer to full mass customization. Mass customization appears to be the most revolutionary development predicted for the coming years, giving the rationale for proposing improved investment in data analytics and related technologies. These technologies will help KFC to understand its target clients better and produce services and products, which are tailored to satisfy their needs in exemplary ways.

Conclusion

Operations management is at the heart of successful business operations. Notably, managers realize the need to evolve operational strategies to adapt to the ever-changing working environments characterizing the contemporary corporate environment. The scope of operations management extends across different aspects of business, encompassing supply chain strategies, human resource management areas, and others. KFC, one of the leading corporations in the fast-food sector, benefits significantly from its operations management strategies. As discussed, the management at KFC strives to build a corporate brand through producing services and products meeting specific client demands. KFC strives to satisfy its clients by providing local menus to supplement exotic offerings. The method is part of the mass customization transformation. KFC delivers alongside using kiosks at its stores to allow customers to place orders and receive their preferred products with as minimal interference as possible.

Despite the reported benefits of an efficient operations management strategy, KFC, as do other businesses, realize the challenge to continue changing their operational methodologies to meet specific customer and technological demands. Technological evolution appears to be the core concern of companies because it determines how corporations bond with their customers and sustain these connections. For instance, KFC may want to bolster its investment in data analytics to increase the prospect of using client data to engage in mass customization for its product and service offerings. Notably, the proposals may help to avoid most of the challenges in the order processing procedures that most fast-food companies adopt, improving client perceptions of the brand and company in the process. The proposals are critical, considering the ever-changing operational environments characterizing modern businesses.

Reference List

Bamford, D., & Forrester, P. (2010). Essential guide to operations management concepts and case notes. New York, NY: John Wiley and Sons.

Brown, S., Bessant, J.R. and Lamming, R., 2013. Strategic operations management. Boston, MA: Routledge.

Collier, D. A., & Evans, J. R. (2017). OM6. Boston, MA: Cengage Learning.

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Duong, Y. (2021). Ordering Process at Fast Food Restaurant. Web.

Holweg, M., Davies, J., De Meyer, A., Lawson, B. and Schmenner, R.W., 2018. Process theory: the principles of operations management. London, UK: Oxford University Press.

Hwang, J., Kim, S. and Lee, Y.K., 2021. Mass customization in food services. International Journal of Hospitality Management, 93, p.102-119.

Kanyan, A., Ngana, L. and Voon, B.H., 2016. Improving the service operations of fast-food restaurants. Procedia-Social and Behavioral Sciences, 224, pp.190-198.

Olsen, T.L. and Tomlin, B., 2020. Industry 4.0: Opportunities and challenges for operations management. Manufacturing & Service Operations Management, 22(1), pp.113-122.

Parker, D., 2012. Service operations management: the total experience. New York: Edward Elgar Publishing.

Stevenson, W.J., Hojati, M. and Cao, J., 2014. Operations management (p. 182). New York, NY: McGraw-Hill Education.

Torlak, N.G., Demir, A. and Budur, T., 2019. Impact of operations management strategies on customer satisfaction and behavioral intentions at café-restaurants. International Journal of Productivity and Performance Management, 69(4), pp. 1903-1924.

Tseng, M.M. and Jiao, J., 2014. Mass customization. Handbook of industrial engineering, 3, pp.684-709.

Uddin, M.S., 2016. Operational strategies and management of KFC: an inquiry. EPRA International Journal of Research and Development, 5(1), 172-179.

Zeithaml, V.A., 2017. Service quality, profitability, and the economic worth of customers: what we know and what we need to learn. Journal of the academy of marketing science, 28(1), pp.67-85.

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