Finger Lickin’ Good

It seems that KFC (Kentucky Fried Chicken) has about 900 restaurants in Great Britain. Last week, roughly 800 of those were forced to close because KFC’s “delivery partner,” DHL (a global courier, parcel and express mail service based in Germany) experienced some “operational issues.”

Obviously, it was bad news for KFC, which tried to put a positive spin on things by publishing statements like “our teams are working around the cluck to reopen all restaurants,” but we can imagine what they were saying privately and especially what they were saying to DHL, which calls itself “the global market leader in the logistics industry.”

That seems like a particularly bold claim right now.

Whether DHL will drop that tagline in light of the KFC fiasco is uncertain, but they will certainly pay dearly for the screw-up. I have no idea what the loss of revenues in 800 KFCs looks like, but I’m confident there are a lot of zeroes involved, and the hunt for a scapegoat will be intense.

As a lifelong Southerner and wearer of clothing with lots of Xs on the size tags, I’m a big fan of greasy fried chicken (their mashed potatoes and gravy are good, too). And while it’s easy to laugh at the predicament of these two corporate giants or to share the pain of fellow chicken lovers in the UK, it’s more valuable to look at the situation and consider the lessons it can teach us in our own businesses.

KFC will be OK. They’ll get their chicken and take an additional pound of flesh from DHL.

And DHL will survive, too. They’re a big company with plenty of resources. They’ll take their lumps — with KFC and their reputation — and they’ll probably never, ever miss another chicken delivery.

But the situation puts a spotlight on the fact that every aspect of the supply chain carries a potential death sentence if things go wrong — especially of you lack the resources of a KFC or DHL, and especially if your sales season runs less than 365 days a year.

What are you doing to protect yourself? What can you do?

Your first option might be safeguards and systems checks to reduce the likelihood of production or distribution stoppages. Backup systems and excellent communication can help.

Your second line of defense might be business insurance covering liability and/or loss.

What happens if someone drops the ball at your business? What happens if disaster strikes and you lose production, inventory, warehousing, retail space or some other key component of your operation?

With so much to lose — perhaps your entire business and the livelihood of you and your family — it pays to have systems in place and to be protected in case things go irreversibly wrong. Even if the backup systems and insurance are a little pricey, they could be the only way to keep going.

In a clever public relations move, KFC put out an ad in England saying “We’re sorry. A chicken restaurant without any chicken. It’s not ideal.” Above the text was an image of the iconic KFC bucket — complete with Colonel Sanders — but instead of “KFC,” it read “FCK.”