Unique Supply Chain Decisions by Chick-Fil-A
Key Points:
· Chick-fil-A operates with a unique supply chain model and mindset
· Product is sourced using high standards
· Their operations are heavily based on experience of consumers and others (i.e. employees, suppliers, etc.)
A quick Google search of “what is America’s favorite chicken?” will lead you to Chick-fil-A®. For over 70 years Chick-fil-A has been perfecting their iconic chicken sandwich, among other products. The ethical operations of Chick-fil-A differ from that of some of their competitors. They take the matter of sourcing their food very seriously. Among their considered areas of high importance is the experience had by customers and employees. Chick-fil-A strives to not only create a positively memorable menu, but a unique and satisfying experience in the dining room or drive-thru.
The purpose of this case study is to share some of the unique supply chain decisions made by Chick-fil-A.
Unique Operations
Demand for Chick-fil-A products has continued to steadily grow over the past few years. In the spring of 2020 Chick-fil-A opened their first full-scale distribution center through the formation of Chick-fil-A Supply®. Chick-fil-A Supply was created in an effort to ensure restaurants have the ingredients, packaging, and other items needed to successfully and efficiently serve their consumers.
By depending on their own operations for supplying, Chick-fil-A has allowed themselves more freedom. They are able to take matters into their own hands as they address and innovate different distribution situations that arise. These situations can involve high-volume deliveries, varied delivery environments, or quickly changing needs. The lessons Chick-fil-A learns across their distribution network can be shared and implemented in future locations. Chick-fil-A Supply positively affects the future of their company.
Focused on Customers
If you’ve visited one of their locations, it’s almost guaranteed you at least once heard the phrase “my pleasure.” Employees are required to treat customers with a high level of respect and kindness. Chick-fil-A has engrained customer satisfaction into the heart of all they do. They must be doing something right, because they have had 50 consecutive years of sales growth, despite economic depressions.
There are multiple ways Chick-fil-A implements consumer-based strategies. They have an app that encourages customer engagement, resulting in the ability to better identify demand. Each receipt has a customer survey that not only rewards consumers with a free sandwich, but the feedback allows the chicken chain to make improvements that will please their loyal customers. Chick-fil-A is also very active on their social media, which is another great way they interact with customers and stay at the forefront of their minds.
Chick-fil-A is one of the least expensive chains to open, which results in about 20,000 applicants every year. However, only 70-80 of these individuals are selected to open and operate a restaurant. Chick-fil-A wants to maintain ownership of the franchise because it allows operations to be uniform across the board. It is essential to their operations that they have the right people in the right places. Most of these chain operators are only allowed one location, so they are able to remain very hands-on and involved. Not only are they in the chicken-business, but they are also in the people-business. Founder Truett Cathy said, “In the end, remember that businesses don’t succeed or fail, people do.”
Conclusion
When it comes to supply chain, Chick-fil-A really knows what they’re doing. They are able to forecast consumer demand using tools implemented by their customers. They have created quite a loyal following and have definitely made a large impact in the fast-food industry.
The current single location of Chick-fil-A Supply can serve 300 restaurants when operated at full capacity. They are relying more on themselves, which allows them to make innovative decisions more freely.
Recently, Chick-fil-A has faced a shortage of some of their popular sauce options. This is due to supply chain complications that have affected other companies as well. While a lot of Chick-fil-A’s decisions are efficient and effective, this is a major inconvenience to their consumers that could have been avoided. Accurate forecasting software would have allowed them to prepare for the demand of these sauces. While Chick-fil-A has a wide array of new and impressive ideas, it would be wise to use methods that are proven dependable until the new methods reach comparable levels of reliability.
