Kentucky Fried Chickens Quality Management Program Management Essay

This assignment is a study on organizational analysis by identifying problems and solutions for a particular company as a subject matter. The company chosen for this assignment is Kentucky Fried Chicken Corporation. In this assignment, the present author is required to perform research on the company. The author will analyze and indentify each of the problems and solutions of the company according to two theoretical models presented in the course materials or readings. Other than that, in the written assignment, the present author will first briefly explain the objective of this assignment and identified the elements, factors and issues that link to this research. After the brief explanation, the present author will evaluate and interpret the overall review on Kentucky Fried Chicken Corporation. Lastly, the present author will draw a conclusion for this assignment regarding on Kentucky Fried Chicken Corporation.

Kentucky Fried Chicken rules the roost when it come to serving chicken. One of the world’s largest fast food chains, the company owns and franchises more than 16, 200 outlets in about 100 countries, more than 5, 100 locations are in the United States. The restaurants offer the colonel’s trademark fried chicken in both original recipe and extra crispy varieties along with chicken sandwiches, chicken pot pies, crispy chicken strips, mashed potatoes plus gravy and potato wedges. Its locations can be found operating as free-standing units and kiosk in high – traffic areas. Kentucky Fried Chicken Corporation grew rapidly which then became a public company in March 17, 1966, and listed in the New York Stock Exchange on January 16, 1969. Kentucky Fried Chicken becomes a subsidiary of RJ Reynolds Industries, Inc. now RJR Nabisco, Inc. Kentucky Fried Chicken was acquired in October, 1986 from RJR Nabisco Inc. by Pepsi Co Inc., for approximately $ 840 million dollars.

In January 1997, PepsiCo, Inc. announced the spin-off of quick service restaurants – KFC, Taco Bell and Pizza Hut – into an independent restaurant company, Tricon Global Restaurants Inc. In May 2002, the company announced the approval of the shareholders to change corporate name to Yum! Brands Inc. The company, which owned by A&W All American Food Restaurants, Kentucky Fried Chicken, Long John Silvers, Pizza Hut and Taco Bell restaurants, is the world’s largest restaurant company in the category of system units with a total of 32, 500 in over 100 countries and territories.

Kentucky Fried Chicken possesses several types of restaurant: the commonest being a dine – in restaurant with a customer seating area that has a condiment bar and a drive – through – window (DTW) for drive through patrons.

The competitiveness of the fast – service restaurant industry in the United States impose pressure on these establishments that to simply contain its current consumer base, a fast food outlet must offer consistent, high quality service. In addition, productivity, resulting lower costs and higher profitability.

In late 1970s, Kentucky Fried Chicken became an early adopter of a quality management program after identifying the importance of managing service quality. (http://biz.yahoo.com/ic/56/56325.html, 2010)

Kentucky Fried Chicken’s Quality Management Program

Controlling quality in a manufacturing company revolves around understanding consumer expectations in terms of products or services and what the establishment need to do to meet those expectations. Total Quality encompasses culture, attitude and organization of an establishment that intends to provide and persists to provide, its patrons with goods and services that satisfy their needs. The culture needs quality in all facets of the company operations, desiring to perform perfection and intolerance of defects. Hence, customer – driven quality, top management leadership and commitment, employee participation, continuous improvement, fast action based on facts and a Total Quality Management culture.

Managing quality in service business includes the intangibility of service results and the presence and participation of customers in the creation of service. The way a service process is executed and service outcome are the two important points of service customers. Consequently, quality management in services emphasize on both of these factors. For example, Kentucky Fried Chicken’s management requires to control not only the taste, temperature and fried chicken’s, but also the courtesy and the speed of service it gives to its patrons.

Kentucky Fried Chicken’s quality management identifies this basic difference by utilizing two complementary programs for quantifying quantity :

The quality service and cleanliness (QSC) program for judging the quality of service results from the prospective of a patron.

The operations facility review (OFR) program for estimating an establishment’s process implementation performance against Kentucky fried Chicken’s process specifications.

The outcome of this two quality measurement programs are edited in ” Today’s Kentucky Fried Chicken restaurant quality period report ” a quarterly report for senior management at Kentucky Fried Chicken.

Kentucky Fried Chicken often uses customer – and market – oriented surveys to manage its service quality in order to understand customer’s expectations and to access the company’s performance against its competitors. The outcome of these surveys are also edited in the quarterly quality report.

In order to achieve its goal, Kentucky Fried Chicken hires a professional interviewing service to surveys consumers on their impressions of product and service quality. A consulting firm is also periodically hired to recognize important service qualities and uses the understanding of consumer expectations in designing and continually updating its quality assessment schemes.

Kentucky Fried Chicken monitor customer complaints via complaint cards available at all Kentucky Fried Chicken outlets and also through letters and phone calls from consumers. Kentucky Fried Chicken also record the number and the types of complaints different restaurants receive.

Kentucky Fried Chicken uses market tracker surveys to assess its performance on important customer service attributes namely, speed of service, mispacks, courtesy, product quality and value for money spent compared to that of its competitions ( such as McDonald’s and Wendy’s )

Kentucky Fried Chicken’s quality management program also stresses continuous improvement of processes, employee empowerment and training of staff to use quality management tools and methods. Its quarterly quality report plays an important part in Kentucky fried Chicken’s quality management program. Providing data on customer expected needs and Kentucky Fried Chicken’s performance permit management to take swift and immediate action.

Quality, Service, Cleanliness (QSC) Program

Kentucky Fried Chicken carried out the QSC program in 1977 and it was designed to assess and evaluate quality at each Kentucky Fried Chicken outlet, company owned or franchised, from the customer’s view – point. ” Mystery Shoppers ” independent individuals contracted by Kentucky Fried Chicken, assess the quality, service and cleanliness of each outlet. Mystery shoppers conduct a QSC assessment of each restaurant twice a month. They are well trained to use the standard QSC form so that they carry out their task in an objective, accurate and and consistent manner. To reflect the ever – changing customer expectations, Kentucky Fried Chicken often revises and updates the form, however, outlet general managers utilize a shortened version of the same form ” QSC alert form “, out daily self – evaluations of their restaurants. Through this methods, managers are able to take immediate improvement actions, such as instructing and helping employees to carry out their jobs correctly. It also aids managers to infuse an awareness of patrons expectations among restaurant staff.

Operation Facility Review

Consumers anticipate consistent and high quality products and services in all Kentucky Fried Chicken outlets. Therefore, operational excellence is of paramount importance to Kentucky Fried Chicken’s success. The objective of the operations facility review (OFR) is to aid Kentucky Fried Chicken to attain national consistency, high operating standards and performance in all its outlets through the utilization of a standardized evaluation program. The OFR assessment program measures a restaurant’s performance against Kentucky Fried Chicken’s Operation standards.

The OFR program is very similar to the QSC program except that the OFR evaluators are Kentucky Fried Chicken staff. The OFR evaluators are strictly trained by Kentucky Fried Chicken to ensure that they carry out all assessment in an objective, accurate and consistent way. Restaurant general managers are required to complete OFR evaluations for their own outlets at least once a week. Running training programs for restaurant staff and maintaining facilities, equipment and premises following Kentucky Fried Chicken’s operating standards is mandatory of managers.

Drive – Through – Window Test

In the fourth quarter of 1989, Kentucky Fried Chicken outlets in Texas and Oklahoma states suffered a decline in its financial and operating performance compared to that of other divisions. The profit margin decreased from 16% to 8%. Kentucky Fried Chicken’s performance key customer attributes, as revealed by the QSR, OFR, and market tracker surveys, was also suffering. Kentucky Fried Chicken was being ranked in the bottom half of the quick – service restaurant industry in terms of :

Speed of service.

Value for money spent.

From historical sales data, 50% of Kentucky Fried Chicken’s total sales volume was derived from the drive – through – window (DTW) operation. Slow service was considered a serious critical problem for DTW, since speed of service is unquestionably the most critical aspect of service quality for a quick – service outlet. The division was also facing competition from new double drive through hamburger operations such as McDonald.

In comparison with the double drive – through or other major fast service restaurants that used drive – through as a big portion of their business, Kentucky Fried Chicken had no marketable competitive advantage introduction of new products was immensaly affected by the slow service, hence, hampering product innovation activity.

Therefore, a solution was needed to overcome the problems of slow service, when, as a matter of fact Kentucky Fried Chicken’s DTW operation had been fine – tuned over many years and cutting down on service time was nearly impossible. However Chuck Reynolds, then regional manager, sought a way to further reduce service time by conducting a test at a few restaurants.

Improving The DTW Processes

In the meeting whereby the Pareto chart was developed, the team also brainstormed to generate ideas for reducing hang time. From the basics of quality management, the DTW employees were the best sources of specific improvement ideas and for implementing them in individual restaurants. Blocker logs were introduced to record the overlying causes of delays.

Total quality management was vigorously used. The team systematically analyzed the reasons recorded in the blocker legs every two weeks. Pareto charts and fishbone diagrams to identity the most frequent and important blockers were used by the team. DTW stuff were challenged and encouraged to general solutions for eliminating the frequency of important blockers. A fishbone chart was developed to identity three key causes of slow service problems with headsets, out – of – product condition and poor equipment layers. Teamwork is clearly manifested when restaurant teams and DTW employees got together to develop and implement plants for solving problems in each of the four restaurants.

After 10 months the four restaurants achieved the major goal of 60 seconds windows hangs time. The following are some of the major changes they made to operational procedures and facilities grouped under the lessons learned in the test :

They rationalized process flow and improved equipment layout to get rid of wasted motion and to reduce service time.

They changed the product mix and specifications.

Many small process improvements ultimately added up to a large improvement.

They used headsets to create customer focus and to convert serial activities into paroled ones.

Given the patron’s participation in the service process the customer should be given clear instructions on what he or she is supposed to do.

The restaurants used the timer as a local point for motivating team members. The DTW timer was the most crucial tool in improving the speed of service.

they created an atmosphere conductive to problem solving, established simple procedures so that employees could suggest improvements, and immediately acted on suggestions.

Rigorous training and motivating stuff through individual or team incentives were keys to process improvement.

The restaurants made process improvement a way of like for managers.

The team always keep an eye a competition.

The Results

The impossible goal of service time of 60 seconds was achieved. Business grew significantly after customers experienced the faster service and labor productivity showed substantial improvement with obvious implications for cost performance. Consequently, the profit margin increased from about eight percent before the test to about nine percent after the test. The QSC and OFR scores for the test outlets were raised and their performance on the key customer attributes showed dramatic improvement. As expected, the speed of service category showed dramatic improvement.

In comparison to the rest of the district, the four test restaurants substantially improved their overall performance during 1991 as compared to 1990 :

They increased customer transactions by 29. 5 percent in the annual DTW customer transactions while that of the district the division decreased by three percent and one percent respectively.

They higher sales growth by 17. 5 percent while the sales for the district and the division decreased by 0. 5 percent and one percent respectively.

They improved productivity by 12. 3 percent

Kentucky Fried Chicken has replicated the operational changes implemented in the test at other restaurants and a similar persisting improvement in speed of service and labor productivity is seen. The better performance has resulted from the quality management program or more specifically from various operational improvements. In fact, with further operational made since the test, Kentucky Fried Chicken’s new record for the average hang time is about 30 seconds. (http://www.yumasun.com/news/students-43929-progress-high.html, 2010)

Conclusion

In summary, Kentucky Fried Chicken rest on the rigorousness of the OFR and QSC programs to keep on assessing the quality of both service processes and result. These tools are further utilized to better the underlying processes for achieving improved overall performance. Kentucky Fried Chicken strives to alter its detailed specifications as the needs of the marketplace evolve and industry practices change. Its experience with the DTW speed – of – service test the ideas of process focus and continuous improvement through empowering its employees are the foundations of the ongoing quality management program at Kentucky Fried Chicken.

Hence, Kentucky Fried Chicken (KFC) Corporation, uses a sophisticated program to manage the quality of service it offers to its patrons. In the last quarter of 1989, the south central division of Kentucky Fried Chicken launched a test program in four Oklahoma City restaurants to improve the speed of service at its drive – through -window operation. It was a huge success and the restaurant cut service time by more than half while improving labor productivity. They also successfully outperformed other restaurants in the arena of profits, sales growth, and increase in customer transactions. The improved processes in the test outlets have served as benchmarks for other Kentucky Fried Chicken restaurants targeting for continuous process improvement, while the decreased service time now serves as the revised specification in Kentucky Fried Chicken quality restaurants and management program.