Some statistics have suggested that as many as 75% of KFC’s UK stores remained closed as new logistics provider DHL failed to deliver chicken less than a week after it began working with the fast food chain.
At the time of winning the contract, DHL declared it would “re-write the rule book and set a new benchmark” for deliveries. While DHL can safely say that it has managed to re-write the rule book, it has certainly not been in the way it envisaged.
The communication nightmare that this has become for both KFC and DHL is enormous. KFC was said to have been warned repeatedly of the dangers of transferring services from its former specialist food distribution partner Bidvest, to DHL, with little experience of food distribution. The financial impact on KFC is said to be £1m a day while it continues. For its part, while the financial impact may be minimal, the reputational impact on DHL may be far more severe.
Changing service providers in itself can present a host of challenges, as most businesses can attest. However, when the service that the provider supplies is business critical, such as the delivery of food to a fast food chain, contingency plans should be put in place. DHL has one distribution centre versus the six that Bidvest operated from – a structural challenge for DHL that may be difficult for it to overcome.
Bidvest has remained, almost, tight-lipped on the issue, save for one – I’m sure gleeful – statement, as they called their handover “a seamless transition” and wished KFC “well in their future endeavours”.
While it is difficult to plan for every single eventuality, a comprehensive crisis scenario plan should anticipate all potential situations, such as the transition to new ‘business critical’ service providers.
It is interesting to note that KFC has continued to issue statements on behalf of the company, with no credited spokesperson. One key point in a crisis is to have a central spokesperson and for them to be available throughout the period and communicate clearly and authoritatively in person if required.
Time is of the essence in a crisis and companies need to demonstrate that they are in control of the situation. In fairness to KFC, in this regard, it has issued regular updates as to the number of stores being re-opened and assurances on pay for staff, particularly those on short term contracts.
The bigger, and potentially more structural issue, is whether this new logistics agreement is one that can be sustained in the long term. If not, and a mistake has indeed be made, there is a much bigger and deeper crisis yet to unfold. Planning for all eventualities will be critical and how KFC, and DHL, communicate this will play a large role in how lasting the damage to their reputations proves to be.