DHL Supply Chain remains committed to client KFC, despite the fast food chain stripping it of a significant portion of its work.
Following the failure to launch last month of its supply chain and distribution service with KFC, which made international headlines as the chain was forced to close the majority of its UK estate, Bidvest Logistics has been bought back on board.
A statement issued yesterday by Bidvest Logistics confirmed it had signed a long-term agreement with KFC UK & Ireland to provide renewed supply to up to 350 restaurants in the North of the UK, from 26th March 2018.
Paul Whyte, business unit director at Bidvest Logistics, said: “We are delighted to welcome KFC back to Bidvest Logistics.
“As the UK’s leading foodservice logistics specialist we understand the complexities of delivering fresh chicken.
“KFC is a valued customer and we will provide them with a seamless return to our network.”
In response, DHL Supply Chain told MT: “We acknowledge KFC’s decision to invite Bidvest Logistics to service its 350 restaurants in the north of the UK.
“In conjunction with our partners, we remain fully committed to delivering excellent service to KFC‘s remaining 550 restaurants across the UK."
John Perry, MD of SCALA, a provider of management services for the supply chain and logistics sector, said: “The decision by KFC to return part of its contract to its previous supplier, Bidvest, following the catastrophic issues it experienced when it switched to DHL, demonstrates the ongoing difficulties that the fast good giant is still battling with. It also shows that there is a lack of confidence that the problems can be solved quickly.
“It puts DHL in a difficult position, as it is effectively being bailed out by a competitor, but it is also potentially harmful to its reputation and the success of winning other business. Splitting the operation between suppliers at this stage, after implementation, raises the question again as to why the transition from Bidvest to DHL wasn’t phased in and whether the proposed solution can be made to work.
“To date, this will have been a very costly experience for all concerned parties. With logistics contracts typically being low margin affairs, large, unexpected costs or incurred penalties can rapidly erode the benefit of switching suppliers. This highlights just how important it is to weigh up the risks before making changes to a contract.”
DHL Supply Chain apologised for the situation last month, which saw around two-thirds of KFC’s 900 UK stores temporarily close and the supply story go international.
However, the GMB union last month described the fast food chain’s decision to switch from Bidvest to DHL, which affected some of its members, as a penny pinching move that had backfired.
DHL Supply Chain announced in October of last year that along with Quick Serve Logistics it had won the contract to manage KFC’s supply chain as part of a "groundbreaking" new transport strategy.
