Professional Documents
Culture Documents
Semester 2, Session
2012/2013
Prepared by:
1.Firmansyah Shidiq
Wardhana
CEB110723
MAIN CONTENT
I. Executive Summary 2
X. Conclusion 14
APPENDICES
I Cover Page 1
II Table of Content 2
VV Bibliography/References 15
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CBEB2103 Operations Management Final Project
Main Objectives
This report provides analysis about the operation management conceptualization in Kentucky
Fried Chicken (KFC) specifically about the management of quality, total quality management
and quality control as well as the elaboration toward KFCs quality assurance. This report also
provides important terms, concepts, theories, models and approaches of quality managements
which are implied in KFCs. The method which used to gather the data is through the press
release of KFCs global site and KFCs Malaysia site as well as the previous studies about
KFCs operation management in general scope.
Discussions
There are seven main parts which are discussed extensively into this report. The first is about
the fundamental of quality management in KFC. The second and third points are about
specific dimensions of quality in KFC as well as the quality service implementation in KFC
within several decades of its operations. The fourth point is about the determinants,
responsibility and costs of quality in KFC. The fifth point of quality management in KFCs
which is taken into serious consideration is total quality management (TQM) implementation
in KFC. The sixth point is about quality control of KFCs as well as the quality assurance
which lies in the seventh point of quality management analysis in KFC
Recommendation
There are several recommendations which can be taken into the account for KFCs betterment
as follows: (1) KFC has to integrate their total quality management program to be more
systematic, holistic and customer centric. (2) The second recommendation about KFC quality
management is that the provision of fresh broiler chicken with high quality from certified
poultries who have high standardization of quality in term of halal point, cleanliness as well
as other quality determinants.
Limitation
The limitation of this academic project or working paper is that the data is gathered through
secondary method which is by analyzing the press release and provided information in the
KFCs website. Moreover, the accuracy of data will be more valid and accurate if we conduct
company visit or structured or semi structured interview with then quality manager of KFC.
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CBEB2103 Operations Management Final Project
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CBEB2103 Operations Management Final Project
Source: Graphic Created by Iman Shidiq with courtesy of Microsoft Office and Operation
Management Book Chapter 9 of Quality Management (Stevenson)
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CBEB2103 Operations Management Final Project
Business Description
KFC outlets prepare and sell chicken, snack and other approved menu items using the certain
trademarks and trade secrets owned by KFC Corporation. The franchisor is KFC Corporation
whose parent is YUM! Brand Incorporation.
The licensee will operate a KFC Malaysia and Global outlets, which are characterized by a
unique system which includes special recipes and menu items, distinctive design, also have
unique decoration and furnishing. KFC has specifications and procedures for operations
procedures as well as for quality control like training and assistance, advertising and
promotional program.
The franchisee, manager and the other employees indicated by KFC must attend and complete
to KFC's satisfaction the initial training program offered by KFC on the operation of a KFC
outlet. So, employees of KFC must attend and complete the training program to KFC's
satisfaction. In certain training, there may include written material and classroom instruction.
The franchisee will have a protected territory of the smaller of a radius of one and half miles
of the KFC outlet. There may be an area around the KFC outlet containing three hundred
thousand people. The franchisee's rights with respect to the protected territory will not be
dependent upon achievement of a certain sales volume, market penetration or other
performance factors. Within the protected territory, KFC will not use or permit others to use
in selling food products. Franchisee has the right to use under the franchise agreement except
for special event sales and foods products except other chicken than chicken in whole pieces
that using the name or image of Colonel Standards. The outlet may only be relocated with
KFC's advanced written approval. As known that the term of agreement and renewals also
considered as important point of KFCs quality responsibility to assure the operational
validity of KFC in certain period of time with legal compliance of the based or hosting
country. The term of the franchisee agreement is twenty years. Renewal terms are dependent
on the franchise agreement signed.
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CBEB2103 Operations Management Final Project
During the term of the franchise agreement the franchisee or a fully-trained and qualified
manager must devote full time to the management and operation of the KFC outlet. The
franchisee is responsible for the full performance of the franchise agreement. But, if the
franchisee is a corporation, one or more of the shareholders may be required to individually
guarantee the performance of the obligations under the franchise agreement. The franchisee
must sell all required products as KFC periodically designates. The franchisee may not deliver
any product from the KFC outlet or anywhere else unless separately approved for delivery
and have signed a Delivery Amendment. The franchisee may not including delivery and make
sales at special events only the franchisee complies with KFC procedures.
Process Customer
Total Quality
PREVENTION Control and Assessment &
Planning of
COSTS Inventory Quality
KFC
Planning Improvement
KFC's
KFC's
INTERNAL material KFC's Scrap
Reworking
FAILURE COSTS procurement Products Cost
Cost
cost
Source: Graphic Created with courtesy of Microsoft Office and Operation Management Book
Chapter Quality Assurance (Pearson,2012)and KFC Malaysia Official Site (www.kfc.com.my)
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CBEB2103 Operations Management Final Project
There are two divisions of manufactured products which are regulated by Malaysia as well
as regulated in KFC. Even, we known that KFC is considered as multinational franchising
company which is coming from United States as non Islamic based country. The two division
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CBEB2103 Operations Management Final Project
are known as regulation of such follows: (1) Locally Manufactured Products and Imported
Products. In this section, we would like to explain and elaborate more about the quality
controls and assurance toward the locally manufactured products with Halal Compliance
based on Shariah or Islamic Law.
Furthermore, there are two way of controls that assure the Halal compliance of locally
manufactured products by conducting Internal Control and External Certification. Firstly, the
internal controls must ascertain that all of KFCs products in Malaysia must conform to Halal
requirements, apart from obtaining Halal Food Certification for KFCs internal operations.
Moreover, quality manager of must operate internal controls of the raw materials
procurement, manufacturing, packaging, storage, transportation and utensils. In Malaysia,
KFC is known as careful company who is careful to prevent cross contamination of foods and
utensils with the filth (najis) or dangerous as well as prohibited contaminants. The internal
controls also adhere to adhere to industry best practices to maintain the highest standards of
quality and hygiene in food production. The second way is called as External Certification by
JAKIM Malaysia to inspect KFCs factory, restaurants, ingredients and processes before
permitting KFC to use Halal JAKIM logo.
QSR Brands
develop product QSR Brands Jakim Inspects Jakim issues the
using only halal applies to the KFC's Halal Certificate
ingredients by JAKIM for halal products, and Halal logo
Syariah assurance facilities and allowed for
Advisory certification layouts KFC's
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CBEB2103 Operations Management Final Project
CLEANLINESS QUALITY
Source: Graphic Created by Iman Shidiq (www.firmansyahsw.com) with the main source of
Industrial Management of KFC (KFC Official Website)
Cleanliness:
Most KFC outlets have fallen way below the standards when it comes to cleanliness
and is characterized by distinct distasteful smell rather than the aroma of freshly friend
chicken. This phenomenon is due to reasons pointed below:
Garbage of the entire outlet is thrown either right outside or very near the entrance
therefore causing repulsion in customers entering the arena. KFC sees a high rate of
customers every hour, with more guests coming in for breakfast, lunch or dinner more will be
the need to maintain the floors and the bathrooms due to increased frequency of guests.
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CBEB2103 Operations Management Final Project
cleaner or appropriate substitute used to lighten the stench. Use of the same material over and
over makes the tables oily and installs a sense of apprehensiveness in the guest.
Service Aspect:
Statistics have shown that every order takes 5 minutes to register and another 15
minutes before its carried on to the consumer while the competitors take 4.5 minutes to take
the order to the customer. Staff faces much problem in understanding and providing a basic
order within the time limit of what is considered appropriate. Also, many guests have
complained regarding the impolite and inhospitable manner of the staff and the time taken to
serve the guest when the order is not as asked or gets late. The staff is known to show a
helpless attitude towards the regular guest problems. With the lack of passion for serving KFC
management has a lot to work upon which must be enforced on following. Manager does not
take appropriate measure to win over the customer in case a customer issue arises.
X. CONCLUSION
KFC is a profitable and a successful venture in Malaysia. It has been accepted and
appreciated all over Malaysia due to which there are over 500 flourishing branches each doing
commendable business. Basic of the responsibilities of an organization is to make ensure that
all their actions and business operations adhere to the ethical standards provided by the law.
Other than strategies for marketing and management, businesses have considered other
elements that play significant roles towards success. Any business requires social interaction
and dealings, the strong recognition of what is morally right or wrong is then essential. The
ultimate purpose of this analysis is to ascertain the quality aspect of the operations within
KFC.
Any organization that considers ethical management as a major aspect of conducting
business can easily gain respect and good reputation from the customers. Contrary to the
belief that social responsibility undermines businesses' profitability goal, this actually help in
generating profit through customer loyalty and good company image. For Kentucky Fried
Chicken, the company must be able to ensure that the products that they offer are healthy and
nutritional, so as to ensure also that their gain customer trust, loyalty and respect.
KFC must also give importance to the management issues to build a healthy
atmosphere for their employees to work in ensuring best quality and excellent service. Since
todays generation is prone to hypertension induced by cholesterol it must prioritize in
including healthy options in its menu by adding more fresh products like fruits and
vegetables. They must also cater to the vegetarian market which is a huge and neglected
niche.
Lastly, being a retail outlet in a fast progressing and technology affluent circumstances
KFC must consider investing in such technology which not only enhances consumer
satisfaction but sells a memorable experience. The idea should be to make things hyper
convenient and meaningful in order to nurture a satisfactory and enhancing customer
relationship. KFC must aim at providing not just the product but an entire experience which
will be share via social media encouraging one of the guests friends to walk down the same
path in turn the KFC obtaining more consumers due to better basics such a quality, cleanliness
and online security, hyper convenience such as ease-of-shop, home delivery, online payments
and experience such as edutainment and digital engagement.
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CBEB2103 Operations Management Final Project
REFERENCES:
Baharin, N., Y. Ishak & R. I. (2012). Factors Influencing Operation Management Application
in Malaysia and ASEAN. Paper presented at the Prosiding Perkembangan Pengurusan dan
Ekonomi Kebangsaan Malaysia ke VII, Kuala Lumpur.
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