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Managmeny Information

Systems used for Kentucky Fried Chicken

Abstract

An Enterprise Resource Planning (ERP) system has an enormous effect on a

business. It is intended to facilitate information sharing, business planning, and

decision making on an enterprise-wide basis therefore, allowing each

department to communicate and share information easier with the rest of thecompany. The ERP system is also responsible for connecting the organization

with its suppliers and customers.

KFC is a major quick serving restaurant (QSR) serving over 12 million

customers on a daily basis through its 21,400 restaurants in 109 countries. This

report investigates the Enterprise Resource Planning (ERP) system being

implemented at Kentucky Fried Chicken, the reasons for its implementation;

the benefits obtained from it my and my personal recommendations to enhance

it. The report also gives an introduction about KFC, its establishment and its

history.

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General Information

KFC Corporation, also known as Kentucky Fried Chicken is the world's most popularchicken restaurant chain. KFC primarily sells chicken pieces, chicken sandwiches, chicken

pot pies, crispy chicken strips, wraps and salads. KFC is part of Yum! Brands, Inc., the

world's largest restaurant company in terms of system restaurants, with more than 36,000

locations around the world.

Type Fast Food Chain

Founded 1930 (North Corbin, Kentucky)

First Franchise 1952 (South Salt Lake, Utah)

Founder Harland Sanders

Headquarter Louisville, Kentucky

Industry Quick Service Restaurant (QSR) industry

Revenues $ 520.3 million (2007)

Employees 24000 (2007)

Parents Yum! Brands

Key People Roger Eaton, President

Harvey R. Brownlea, COO

James O'Reilly, VP for Marketing

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Kentucky Fried Chickens Famous Story

Pete Harman was building a successful burger business in Utah when a white-

haired, goateed acquaintance from Kentucky showed up unexpectedly and offered to cook a

fried chicken dinner.

Colonel Harland Sanders had a business proposition. He was certain that one

helping of his specialty chicken, coated with a blend of 11 herbs and spices, would persuade

Mr. Harman to add chicken to his menu.

Mr. Harman was hooked after a few bites. Soon, his restaurant was promoting the

dish, called Kentucky Fried Chicken.

The chicken became an instant hit in that August of 1952 as customers lined up

outside the Salt Lake City eatery to take home dinners by the bucketful. For $3.50, they got

14 pieces of chicken, mashed potatoes, rolls and gravy.

From humble beginnings, Kentucky Fried Chicken became a fast-food staple and its

originator one of the world's most recognizable faces.

Fifty years later, the chain built on Mr. Sanders' salesmanship and home-style

cooking boasts nearly 12,000 restaurants worldwide generating sales of nearly $10 billion a

year.

For Mr. Sanders, success was a long time coming. He drifted from job to job,

including stints as a railroad fireman, insurance salesman, steamboat ferry operator, tire

salesman and service station operator. He perfected his chicken and the cooking technique

in the late 1930s while serving hungry customers who stopped at his service station now

a historic landmark in Corbin, Ky. The title colonel was an honorific bestowed on Mr.

Sanders by a Kentucky governor.

He decided to take his chicken from a handful of local restaurants to a national stage

at the age of 62, a time when most people are thinking of retiring.

He crisscrossed the country by car, his cookware and herbs and spices in the back, to

whip up batches of chicken for restaurateurs and their employees. The demonstrations

sealed many handshake deals in which restaurant operators agreed to pay Mr. Sanders a

nickel for each chicken sold.

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By 1964, Mr. Sanders had signed up more than 600 franchised outlets when he sold

the company for $2 million to a group headed by Jack Massey and Mr. Brown, who later

became governor of Kentucky.

Kentucky Fried Chicken took flight under Mr. Brown and his partners. By 1971,

when they sold the company for $285 million to Heublein Inc., it had more than 3,500

franchised and company-owned restaurants.

Mr. Brown attributed the company's success to its emphasis on take-home dinners

that resembled the kind mother made, a revolutionary concept in the restaurant industry.

The company also capitalized on Mr. Sanders' popularity. The colonel always

looked the part of the Southern gentleman, wearing his trademark white suit and blackstring tie while pitching chicken or dishing out homespun wisdom on television shows.

Mr. Sanders stayed on as company spokesman, promoting the chicken in folksy

television commercials, until his death in 1980 at the age of 90.

KFC changed hands a few more times. It became a subsidiary of R.J. Reynolds

Industries later RJR Nabisco when Heublein sold it in 1982. PepsiCo acquired KFC

from RJR Nabisco in 1986 for about $840 million.

In 1997, PepsiCo's three fast-food restaurant chains KFC, Taco Bell and PizzaHut spun off to form Tricon Global Restaurants Inc. This year, Louisville-based Tricon

changed its name to Yum! Brands Inc.

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Kentucky Fried Chickens Basis for Success

Is owed much to the vision, energy, and heart of its founder and corporate icon, Colonel

Sanders. Colonel Sanders developed the special cooking process and created the blend of

11 secret herbs and spices known to the world today as Original Recipe Kentucky Fried

Chicken. The Colonels Promise and vision which states the following:

To Serve Our Valued Customers

Hot, Great Tasting Meals

Great Value for Your Money

Quickly and Accurately

In a Clean, Comfortable Environment

In a Friendly, Courteous MannerToday, the company continues to maintain rigorous quality control programs to ensure that

its customers around the world enjoy the highest possible quality restaurant services and

food products. KFC employees are trained to deliver this promise to each and every

customer that is served.

The C.H.A.M.P.S Program

It is a program that backs up the Colonels promise to the customers.

C.H.A.M.P.S stands for the six universal areas of customer expectation common to all

cultures and all restaurants concepts which are:

Cleanliness

Hospitality

Accuracy

Maintenance of Facilities

Product Quality

Speed of Service

C.H.A.M.P.S is the operating platform used to ensure that the customer has the consistent

quality experience in every restaurant, everyday and on every occasion.

\

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Corporate Overview

Facts and Figures

KFC restaurants are located in 109 countries and territories around the world and serves

over 12 million customers every day generating sales of nearly $10 billion a year. KFC

operates more than 5,200 restaurants in the United States and more than 16,200 units around

the world, employing more than 24,000 people worldwide.

Type of Restaurant

Its locations can be found operating as free-standing units and kiosks in high-traffic areas.

Many KFC locations are co-located with one or more ofYum Restaurants including Long John

Silver's, Taco Bell, Pizza Hut, orA&W Restaurants. Many of these locations behave like a

single restaurant, offering a single menu with food items from both restaurants.

Franchise Model

More than 20% of the restaurants are company-operated; the remaining 80% are either

franchised or licensed. Franchisees are required to meet certain operating standards as part

of their franchise agreement.

KFCs Organizational Structure

KFC has adopted a traditional fast food chain restaurant structure.

Chief Executive Officer: The CEO has control over departments and employees.

Regional Manager: Monitors and Controls the Area Manager.

Area Manager: The Area Manager drives excellence in day-to-day operations of all

company owned restaurants in the market; trains, coaches, supports managers; plansand sets goals; focuses on in-store problem solving/process improvement; setsstandards; recognizes and motivates Restaurant Managers, Assistant Managers andRestaurant Teams.

Restaurant General Manager: The Restaurant General Manager is accountable for

creating and running an energetic and valuable work environment, which iscommitted to serving the best chicken at the fastest speed and with a smile. TheRestaurant General Manager reports directly to an Area Manager and is accountablefor successfully implementing and maintaining all company policies and proceduresin relation to operations, customer service, cash handling, marketing, purchasing,human resources, health & safety, administration, training and development.

Assistant Manager: The Assistant Manager is responsible for assisting the

Restaurant General Manager in creating an energetic and valuable workenvironment. Assistant Managers are also responsible for ensuring all company

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policies and procedures are followed in relation to operations, customer service,cash handling, marketing, purchasing, human resources, health & safety,administration, training and development

Trainee Manager: Trainee Manager is responsible for assisting the Restaurant

General Manager and Assistant Manager in creating an energetic and valuable workenvironment.Trainee Managers help with day-to-day running of the restaurant, and need to ensurethat all operations, customer service, cash handling, marketing, purchasing, humanresources, administration and training & development policies are followed.

Customer Service Team Members: Are responsible for working the service areas

and ensuring quality product, service and cleanliness is delivered to all customers attop speed and with a smile!

Food Service Team Members: Are responsible for putting the crunch in the coating

and the zing in the Zingerthe cooks main task is to prepare and cook theirresistible KFC products! The cook must also maintain the cleanliness of thecooking area as well as the quality of product and speed of preparation.

Head Office DepartmentsCompany support functions are listed below:

Business Development

The Development team finds, builds and maintains KFC Restaurants. The Team is set

up in four key areas; network planning, acquisition, store design & construction and

estate management. The team works closely with the Finance team to ensure that the

new restaurant is not only optimizing the customer experience but also driving industry

leading returns for the shareholders. They are also responsible for ensuring KFCs high

standards of convenience, comfort and safety are maintained in all KFC restaurants and

facilities through an extensive annual refurbishment program.

Finance

Meaningful and insightful analysis of their performance is central to ensuring their

continued business success. In the first instance this requires accurate and timely

accounting. Whether it be paying the suppliers, billing the franchisees, managing cashand asset purchases or paying salaries for the employees, each member of the Financial

Control team is dedicated to ensure all business transactions are accurately and

efficiently recorded. This provides a robust platform for the Business Control and

Commercial teams to analyze results and partner with key stakeholders to set and drive

the strategic direction of the business.

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Human Resources

The peoples culture is key to KFCs success and finding the right people who will

thrive in the job they do is paramount. Their HR Practices are second to none and theythrive on giving employees the opportunity to grow and develop within the business.

Their vision is To Build a World Class Organization, which will be achieved through:

Managing Talent, Building People Capability, Creating Engagement and Driving

Organization Effectiveness.

Information Technology

The IT team at KFC select, develop, implement and maintain professional technology

solutions that support, and enable, the strategic goals of the business. The team supports

restaurants throughout the area with a robust and standard framework of applications

and infrastructure. The team has a passion for the provision of world class solutions and

support, from the in-store technology that enables their stores to sell great chicken, to

the timely, relevant and accurate reporting to the management team that enable clear

decisions to be made.

Marketing

The driving force behind the KFC Marketing team is a shared passion to deliver a

constant pipeline of irresistible tasting meals. The process starts with defining consumer

needs and exploring new ways to deliver consumer led innovation. The Marketing team

work cross functionally with Product Excellence and Operations to develop andimplement new ideas and with Finance to measure their contribution to the business.

The Marketing team is also the heart of communication, both within the business and

most importantly to the consumers. The multi million pound Marketing budget is

divided between media buying and advertising production to ensure a year round

calendar of new news to drive consumers back to KFC Restaurants again and again.

Operations

The Operations team is the hub of the company, running KFC stores and delivering to

the customers fantastic quality food and outstanding levels of service. The function

covers the leadership, management and evaluation of all the stores and above store

support staff. Operations works alongside all KFC functions to ensure that their

restaurants look good, their teams are motivated and well trained and all of their

delicious products are hot and fresh giving all their customers a reason to return. They

partner all other functions to ensure that standards are set and maintained. Operations is

a people business. They recruit, train and coach their teams. They take pride in

providing great career development opportunities for their teams, enabling people who

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have joined them for their first job at the age of 16 to progress to become Restaurant

General Managers and Area Managers.

Franchise Operations

The Operational support for the KFC Franchisees is a key focus for their business. They

have a dedicated team working with their Franchise partners on delivering exceptional

excellence.

Enterprise Resource Planning System (ERP)

ERP is a software that consists of multiple applications such as customer relationshipmanagement (CRM) software; inventory control software; accounting applications;sales software; order-tracking tools; invoicing software; project-management andpayroll programs, among others. By consolidating all these tasks into one over-archingsoftware suite, businesses can dramatically cut training and maintenance costs, ensureall data is consistent and up-to-date, and reduce software expenses. It integratesinformation across the company and eliminates complex links between computersystems.

ERP Key Functions: ERP Systems typically handlethe manufacturing, logistics, distribution, inventory, shipping, invoicing,and accounting for a company. ERP software can aid in the control of manybusinessactivities, including sales, marketing, delivery, billing, production, inventorymanagement, quality management, and human resource management.

ERP Software Applications Include:

EDI (Electronic Data Interchange): Is the structured transmission of data between

organizations by electronic means. It is used to transfer electronic documents from

one computer system to another, eg. from one branch in an organization to another.

It is more than mere e-mail; for instance, organizations might replace bills of

lading and even cheques with appropriate EDI messages.

AMS (Attendance Monitoring System): The attendance monitoring system provides

registration and complete processing of the employees attendance. It is intended for

all organization types, ranging from state administration bodies to banks to industrial

companies. Data is stored in an SQL server database, allowing distributed data

processing within a computer network.

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CAD/CAM/CAE (Computer Aided Design/ Computer Aided Manufacturing/

Computer Aided Engineering): This system handles the design, manufacturing and

engineering functions in the organization. This provides drawing and designengineering information to ERP in the execution of manufacturing and purchase

functions.

DMS (Document Management System): Provides storage,

versioning, metadata, security, as well as indexing and retrieval

capabilities of electronic documents and images of

paper documents e.g., records of transactions

handled. The system also provides text edit

facilities, cross checking, confirmation of

authenticity of documentation.

CMS (Communication Management Systems): ERP

uses CMS as a tool for its communication needs.

CMS controls overall communication within the

organization.

SMS (Security Management System): It handles

security aspects of the organization. It tracks the movement of

man, material and vehicle. Access by unauthorized or unidentified

means are monitored and warned. Therefore the entire business operation can be

safeguarded.

Objectives for Implementing an ERP System:

Performance Management & Reporting: Report and manage the performance of

enterprise business solutions.

Purchasing: Automate the steps from procurement to payment.

Materials Management: Manage inventory receipts, shipments, moves and counts

across your warehouses, suppliers and customers.

Manufacturing: Control manufacturing operations with material planning,

production scheduling and shop floor execution capabilities.

Order Management: Create quotes, book orders, manage materials, generate

invoices and collect cash. Sales: Control your valuable customer relationship management solutions.

Service: Manage the entire Service delivery lifecycle.

E-Commerce: Create and run a secure web store front.

Point of Sale: Automate cash sales and inventory management.

Financial Management: One system automates the processes of your business

solution and manages your financial records.

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Projects: Project management, planning and execution. Track costs associated with

multi-phase projects across your business solution.

Advantages of an ERP System:

ERP systems connect the necessary software in order for accurate forecasting to be

done. Integration among different functional areas in an organization to ensure proper

communication, productivity and efficiency. Order tracking, from acceptance through fulfillment.

The revenue cycle, from invoice through cash receipt.

Tracking the three-way match betweenpurchase orders (what was ordered),

inventory receipts (what arrived), and costing (what the vendor invoiced).

Reduce paper documents by providing on-line formats for quickly entering andretrieving information. Improves timeliness of information by permitting, posting daily instead of monthly.

Greater accuracy of information with detailed content, better presentation, fully

satisfactory for the Auditors. Improved Cost Control.

Faster response and follow up on customers.

More efficient cash collection and reduction in delay in payments by customers.

Better monitoring and quicker resolution of queries.

Enables quick response to change in business operations and market conditions.

Helps to achieve competitive advantage by improving its business process.

Improves supply-demand linkage with remote locations and branches in differentcountries.

Provides a unified customer database usable by all applications.

Improves international operations by supporting a variety of tax structures, invoicing

schemes, multiple currencies, multiple period accounting and languages. Improves information access and management throughout the enterprise.

ERP Systems Centralize DataBenefits of this include: Eliminates the problem of synchronizing changes between multiple systems -

consolidation of finance, marketing and sales, human resource, and manufacturing

applications Permits control of business processes.

Provides real time information to management anywhere, anytime to make proper

decisions. Reduces the risk of loss of sensitive data by consolidating multiple permissions and

security models into a single structure. Shorten production lead-time and delivery time.

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Disadvantages of an ERP System:

Customization of the ERP software is limited.

Re-engineering of business processes to fit the "industry standard" prescribed by theERP system may lead to a loss of competitive advantage.

ERPs are often seen as too rigid and too difficult to adapt to the

specific workflow and business process of some companiesthis is cited as one of

the main causes of their failure.

Many of the integrated links need high accuracy in other applications to work

effectively.

Resistance in sharing sensitive internal information between departments can reduce

the effectiveness of the software.

Some large organizations may have multiple departments with separate, independent

resources, missions, chains-of-command, etc, and consolidation into a singleenterprise may yield limited benefits.

KFC Before Implementing an ERP System

KFC was using multiple IT solutions to address their business requirements. Because of

this, the integrity of the reports became difficult to validate and management had a hard

time tracking down their stocks. They became burdened by multiple data sources that

didnt integrate. Lots of time and money was lost from duplication of order entries and

business processes throughout the outlets. Numerous hours were being spent each

month manually creating reports, tracking invoices, and handling payroll to provide the

Head Office with their month end financial reports. The reason behind these problems

was evident: the systems could not communicate with one another. The KFC IT Team

updated KFCs enterprise IT structure withJD Edwards EnterpriseOne 8.10 to be able

to solve KFCs growing problem of misinformation and inaccurate reports.

KFCs Implementation of an ERP System

This Enterprise Resource Planning (ERP) system assists with managing finance, assets,

people, projects, suppliers and the fulfillment and manufacturing processes.

JD Edwards EnterpriseOne 8.10 offers both the foundation and operational components,including:

Financial Management

Technical Foundation

Inventory Management

Asset Management (Equipment, vehicles)

Forecasting

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Workforce Management

Time and Expense Management Procurement

JD Edwards EnterpriseOne 8.10 benefits the company with the following: Greater efficiencies - reducing duplicate data entry/maintenance Standardizes business processes Tracks and manages key data Greater level of insight into how the business works Enables to plan ahead Provides business applications for now, and into the future

Conclusion and Recommendation:

The proposed system will not be a different system but, an upgrade to the existing one.After an evaluation of various ERP solutions, I came to conclusion that an upgrade toJD Edwards EnterpriseOne 8.10 to JD Edwards EnterpriseOne 9.0 would be the bestchoice.

JD Edwards EnterpriseOne 9.0 includes enhancements for financial management,supply chain management and human resource management. The latest release alsoincludes industry-specific capabilities for engineering and construction, food andbeverage, commercial real estate, industrial manufacturing and professional services.

The new Web-based system enables quicker generation of inventory, sales and revenue

reports going from 1 hour to 20 minutes. This helps the KFC management to makemore accurate and quicker decisions in response to demand changes.

The system also enables centralized data repository, XML-based integration, andsmooth integration with other applications. Also leverages JD Edwards EnterpriseOneXML Publisher to print and distribute formatted documents, results in savings on third-party software licensing costs.

The system supports the company to automate inter-company invoicing and businessworkflows between the US Head Office and the rest of the company owned outlets,helping to ensure consistency and enhancing operational efficiency. It potentially saves20 to 30 additional headcount to process these routine transactions.

Key features of JD Edwards EnterpriseOne 9.0 include:

Deployment to enjoy enhanced functionalities, user-friendliness, multi-language and

multi-currency support, as well as ease of management. As the new version is unicode-

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compliant and Web-enabled, it helps to save a lot of time and resources for deploymentand training across various countries.

Accounting module provides advanced project accounting integrated to an

enterprise's general ledger to help deliver better data quality for improved complianceand financial management and multiple options for expense allocation on projects. Newfunctionality handles detailed client-required payroll and time card reporting, reportgeneration and invoice printing to specific client formats, and different financial burdenand allocation methods for meeting client needs.

Enhanced financial compliance capabilities through new data relationship

functionality for assigning correct values to entered information. Now, data can beentered correctly using customer-defined rules to help eliminate the possibility thatinconsistencies, abbreviations or incorrect spellings are captured.

Dynamic configuration capabilities enable sales and customer service

representatives to correctly enter sales order combinations comprised of products andservice offerings.

New industry-specific enhancements for food and beverage producers.

JD Edwards EnterpriseOne Tools 8.98 supports JD Edwards EnterpriseOne

applications 8.10, 8.11, 8.11 SP1, 8.12 and 9.0. Key features for reducing total cost ofownership include:

New User Interface that incorporates customer-driven user interface improvements

and adopts a consistent Oracle standard to enhance productivity and improve the visualexperience.

More standards adoption, including support for Web Services for Remote Portlets

(WSRP) and Java Database Connectivity (JDBC), increases IT staff flexibility and

reduces learning curves for effective use. Enhanced Batch Process Management with out-of-the-box functionality to improve

the management and monitoring of JD Edwards EnterpriseOne batch processes andreports.

References

www.kfc.com

www.yum.com

http://www.oracle.com/us/corporate/press/017527_EN

http://www.gtslb.com/solutions/jdedwards.htmhttp://it.toolbox.com/home/search/?r=jd+edwards

http://www.sap.com/index.epx

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