Question: Read the case study provided and answer the following questions. SA FAT CHICKEN CRISIS IS GETTING WORSE SAYS POULTRY GIANT SA's largest poultry producer, Astral
Read the case study provided and answer the following questions.
SA FAT CHICKEN CRISIS IS GETTING WORSE SAYS POULTRY GIANT
SA's largest poultry producer, Astral Foods, said on Monday its shortage of smallersized chicken portions for the fastfood
restaurant sector had worsened since December amid continuing load shedding. There isn't a lack of chickens instead,
chicken houses are full of birds that cannot be slaughtered due to electricity outages. As they wait, the chickens are getting
heavier. Fastfood outlets typically require chickens of around kg But many now weigh more than kg one poultry
farmer told News In December, KCF was forced to temporarily close some outlets due to problems with chickens. Astral
told News the situation has worsened since December as more regular Stage load shedding is implemented.
"Currently, it is difficult to find birds in the weight ranges required for QSR quickservice restaurant production," said Astral,
while adding that it couldn't comment on behalf of the entire industry. The group said it had commissioned diesel backup
generators at all its processing sites in February but there was still a backlog of large live birds on farms. Astral said
that once the backlog had been completely addressed, QSR production should normalise". Spur Corporation CEO Val
Nichas said on Monday that the group, which owns brands such as its namesake steakhouse, Roco Mamas and John
Dory's, had mitigated the chicken supply crisis by using a combination of larger and some smaller chicken suppliers. "The
biggest challenge has been the supply of wings and leg quarters, but this has been mitigated via this portfolio of chicken
suppliers. Our specifications have not been compromised at all in this process." Nichas says many suppliers have ramped
up their generator capacity in recent months, but this along with running costs, including diesel could results in price
hikes of to
Doug Place, chief marketing officer for Nando's Africa Middle East and South Asia, told News last week that while the
restaurant industry was under similar if not more pressure from a supply point of view that it experienced in December,
Nando's was not likely to run out of stock. We are confident we will keep all stores open and that we will have all menu
items available for sale," said Place. But he said there was no doubt there was "more pressure", adding that the main
reason was that the "mean load shedding level had moved from to which compounds the supply chain issues between
the farm and getting the chicken into restaurants. "There are definitely shortages of chicken. The stock on hand is at lower
levels than what we would feel comfortable with. December was particularly tough because demand was higher as people
eat out more. And even though now demand is less, the mean load shedding impact is higher." Place said, however, that
the danger of discontinuing menu items or shutting restaurants temporarily is low. We run a good supply chain and we've
had years of practice with load shedding even if it hasn't been at this level." Nevertheless he said Nando's was anxious
about load shedding and the supply situation.
Responding to questions last week, KFC South Africa said that its supply is "currently stable" with no menu items or
stores" affected.
QUESTION
From a supply chain and operations management context, critically discuss the impacts of loadshedding for
KFC Nandos and Spur as highlighted in the case study.
As the Marketing Manager at KFC you have been tasked by the Group CEO, Sabir Sami, to prepare a report
addressing the ramifications of the highlighted crisis and devising your response strategy. Make use of relevant
examples.
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