SUPPLY CHAIN MODEL OF KFC - -G Q1 1122101111119 1 1kg kg xe 7 V INVENTORY MANAGEMENT 9
Analysis of KFC's supply chain model indicates that core suppliers can be classified into two categories Type | is providing processed products such as chili sauce, sauce Category 2 mainly provides fresh, unprocessed foods such as chicken, beef, and potatoes Upon request for such ingredients at restaurants, the required quantities of ingredients will be required to the distribution centers to transport them through the company-wide logistics management system There is a fleet of refrigerated trucks that deliver fresh ingredients in the form of processed food items to the company’s distribution centers Then another fleet of refrigerated trucks transports the products from the distribution center to the restaurants Processed food delivered to the company is then processed as a final step for the final consumer to consume through the KFC store
The goal of supply chain management is to optimize the flow of production, from receiving production elements to releasing finished products The production plan must meet the following three measurement criteria: e Achieve quantity and quality according to customer requirements e Timely and timely e Cost of effective use in the implementation of the plan
Supplier: KFC’'s input materials including vegetables, fresh chicken, beef, are provided by qualified farms KFC’s evaluation and quality control standards are based on international standards of Yum Brand Corporation in the US KFC only chooses reputable raw material suppliers and ensures quality by certifying quarantine There are only a few businesses in Vietnam that are qualified to supply chicken to KFC, such as the Vietgap standard chicken farm of Nguyen Phi Long | farm
Quantity and time: Store manager allows to import goods and divides them into two categories: dry goods and frozen goods Dry goods are materials used to process chicken, cooking utensils, containers Goods arrive once a week on every Wednesday morning Frozen goods are mainly chicken meat, in addition, there are potatoes, egg tart shells, fish bars Goods are imported in the evening, 2-3 times a week
Usage cost management: Every day before work, staff regulates inventory of supplies and registration This data is a calculated order quantity, which can also be used for intraday costs From there, branch managers can rely on customer buying cycles, sales times, safety stock levels, and weather factors to calculate expected sales
Suppliers: Suppliers can cheat in the supply of products, especially raw materials used to produce processed materials before being imported into the company This may adversely affect the quality of the product Suppliers may sometimes delay deliveries due to weather or disease conditions (especially COVID-19) resulting in delays in customer deliveries
Quantity: KFC always requires branch managers to closely monitor inventory volume and estimated order quantity to promptly send requests to supply materials to the company’s distribution centers However, sometimes KFC still has some problems with the number of customers when the number of customers suddenly increases to the point of overload
Time: Time is not an absolute guarantee, especially in big cities Traffic congestion can also contribute to significant delays in delivery times Fresh ingredients have a shorter (and more delicate) shelf life than frozen or processed ingredients They have to go from the field or farm to the counter very quickly to avoid product loss Some other problems that can be related to unexpected accidents during transportation also delay the time of goods entering the warehouse
Safety: At KFC, input materials are always guaranteed on food safety issues However, in the process of inventory or product processing, there may be some effects on the health of regular customers of KFC such as obesity, high blood pressure, etc
The current situation of the fast food market and the market share of KFC in Vietnam is very potential for growth because 65% of the young population is aged 35 and about 70% of Vietnamese consumers do not have the habit of using fast food Therefore, this is a promising market that investors need to exploit in the future To surpass competitors like Lotterial and McDonald's to stay at the top of the fast food market, KFC always requires strictness in their supply chain KFC builds a sustainable supply chain by using Distribution Resource Planning (DRP) to establish certain inventory control parameters (like a safety stock) and calculate inventory requirements in stages Branch managers use in-store product parameters, number of goods sold in a cycle, number of suggested orders, etc to plan orders from suppliers Since then, KFC always ensures the number of products to serve customers and make customers have the best experience when coming to KFC stores
As for the supply chain, KFC has had to invest significantly in establishing safe and fresh food supplies KFC should provide more training to employees on the rules of food processing to ensure food safety for consumers Besides, optimizing capital in the process of importing raw materials to reduce product costs and increase profits Furthermore, KFC should anticipate the number of employees needed to serve customers, as well as optimize labor costs
WHAT IS INVENTORY MANAGEMENT? 0 ccccccccccccescscseeeccesssseeeeecesuseeeseesseeaeaeeaes 9
Inventory management refers to the process of ordering, storing, and using a company’s inventory This includes the management of raw materials, components, and finished products, as well as the warehousing and processing of such items —Holding inventory can account for 20% to 40% of their value per year.| (Zhang.J,2014)
5.2 Inventory management apply in KFC case
In KFC, inventory included 3 categories:
>ằ Dry storage that are consists of items like cleaning products, disposable plates spoons towels, recipes, etc ằ Cold storage (frozen) for non-veg items ằ Cold storage consists of veg products, cold drinks, water etc
Once the product is finished, it becomes the finished product the company sells to its customers so inventory management at KFC is extremely important
Receiving costs — these include the cost of unloading the goods at the warehouse and inspecting them to ensure that they are correct and defect-free items Ingredients at KFC need to be checked right from the import step If food is rotting when it arrives at the warehouse, the cost of receiving the goods will be a concern If the goods are damaged or lost by the supplier, it is necessary to take inventory of the goods to avoid incurring this cost
Shortage costs — These costs, also called stock-out costs, occur when businesses become out of stock for any reason When there is a shortage of goods at the warehouse, the production process will be interrupted In addition, KFC also has to pay the cost of idle staff, the cost of machinery, and the refrigerator to preserve without earning anything Customer loyalty will also be lost when the product they choose is exhausted "We had to choose chicken breast instead of wings because of ran out "- feedback from customer They will choose other products instead of remaining loyal to KFC "Compared to KFC,
I think McDonald's is still better"- customer feedback
Spoilage costs — perishable inventory at stock can rot or spoil if not sold in time, so controlling inventory to prevent spoilage is essential Raw materials such as dipping sauces, bottled water need to be preserved and see the expiry date to avoid incurring this cost." Spoilage not only costs money but also means you fail to realize a return on your initial investment” - according to the unleashed article
5.2.3 Import time, Quantity & Food safety
In regular process, necessary goods will be returned to the shop 2times /week Before moving the products to storage the 3 stage process is followed, at first the temperature is measured which should be between (-180C to -230C) , then expiry date of the product is verified and at last the quality of the product is checked via Tell-Through machine At any point of the this 3steps any one step is not upto the standards the products are sent back to warehouse Since the goods return twice a week, it is really necessary to store a certain quantity of goods On the other hand, the ordering staff must also ensure that the raw materials in the warehouse are sufficient to meet until the next time for the next time Avoid shortages, leading to stagnation and affecting the operation of the store as well as affecting sales That helps the store: reduce excessive inventory, easy to follow monitoring and preserving the quality of goods, saving investment costs on storage space and the premises of an unnecessarily large warehouse, simplifying and safe stacking unloading for employees
Seasonal demand: For holidays and Tet, the amount of inventory that needs to be stored increases significantly In order to meet customer demand, the store must have enough inventory but not exceed the available stock
Uncertainty: There are certain uncertainties in the supply, demand, and delivery, which makes the store want to keep a certain amount of goods in reserve In case of urgent stock from the time they place they take 2days to get the stock via courier At this point, the store will have to come up with suitable solutions to maintain the progress of operations
Economical by scale: Without an inventory, the store will not be able to operate efficiently because it takes too much time and costs to turn in the goods every day And the division of goods per day is also very complicated and difficult to control For KFC, inventory management must ensure customer needs while preserving raw materials If the inventory is too large and not used up for a long time, food safety problems can arise 5.2.4 Main tasks in inventory management Apply Just in time (JIT) and First in first out (FIFO) to manage the inventory
The restaurant follows Just In Time (JIT) and First In First Out (FIFO) to manage inventory Inventory, is divided into three types consisting of Daily, Weekly and Monthly
10 inventory The daily inventory consists fast moving products like Krushers, Non-veg items, ice-creams
Here the orders are placed by the inventory department every night after the restaurant closes for customers The requirement sheets are filled inorder to place the order and products are moved from inventory The weekly inventory consists of Dry storage items like disposal plates ; equipments and recipes needed to cook The requirement sheet is filled while placing order which is placed every Thursday and the products reach the outlet to the max by Monday or Tuesday The monthly inventory consists of detailed stock verification of the items present in the store and the products disposed off due too non consumption on reaching the standard time are also recorded The update of stock verification is done via website and once updated its final and no changes can be done by the staff, if in case there are changes they call up the head quarters and make the necessary changes Logistics The products/goods are transported from Bangalore warehouse via road transport The outlet does not purchase from any other local dealers for any items
In regular process, the truck reaches the outlet on Monday or Tuesday between 9am to llam Before moving the products to storage the 3stage process is followed, at first the temperature is measured which should be between (-180C to -230C) , then expiry date of the product is verified and at last the quality of the product is checked via Tell-Through machine At any point of the this 3steps any one step is not upto the standards the products are sent back to warehouse In case of urgent stock from the time they place they take 2days to get the stock via courier Inventory Storage
KFC implements different storage for different products consisting of dry storage, cold storage (frozen) for non-veg items, chill storage and cold storage for veg products Dry storage consists of items like cleaning products, Disposable plates spoons towels, recipes etc The products are stored at room temperature Cold storage consists of veg products, cold drinks, water etc stored at temperature (-loC to -40C) Cold storage fr non- veg products are stored at temperature (-180C to -230C) wher the product validity is months Older batches are placed at the front
Items are placed in simple rack system and fast moving items are placed in a such manner that they are easily accessible The products are moved in FIFO method Chiller storage are stored in temperature of (-loC to -40C) It’s a non-veg defrosting room Stores fresh product and frozen product (for thawing) is placed here Frozen product once taken out of freezer cannot be returned (expire time 12 hours) Items are placed in rack system placed along with time tag placed with it PROCESS Here the items are moved from cold storage to the chiller are placed for thawing and defrosting with room temperature of (- 1oC to -40C)
Frozen product once taken out of freezer to chiller cannot be placed back Once the duration of 12 hours are done items/ packets are removed out and goes to the cleaning process The duration of cleaning depends from staff to staff usually on an average 5-10 minutes are needed After the items are cleaned, it is placed in an Marinator where basic masalas are mixed The machine takes 1Ominutes and makes 300 rotations Once the items are marinated there is a need for the products to absorb the masala so they are kept for absorption in a process called Ageing which takes 2 hours
After that the products need to get a layer for themselves so they pass through a process of Breading On the basis of requirement cooking is done Cooking consists of 3 types: Grilled, Fried and Baked The duration of items which are grilled is 45 minutes from the time it is ready Fried and Baked items duration is 2 hours from the time it is ready Grilled and baked items are cooked in an micro oven called “Convotherm” After that the products are placed in an oil dry machine which absorbs oil from the dishes which takes time duration of 1 — 2 minutes
RESPONSIVENESS TO CUSTOMER DEMAND - Sàn Hs sns xnxx 17 VII STAFF MANAGEMENT 24
When coming to KFC, what customers demand and care about most is the quality and price of the foods, time delivery in the fastest, friendliness of the staff willingness to meet all requests and listen to customer feedback
Quality control is the traditional approach, concerned with ensuring that actual quality, as measured, meets the target or benchmark standards that have been set It is concerned with maintaining quality standards, rather than improving them and involves: e Establishing quality standards for a product or service e Establishing procedures and processes that ought to ensure that these quality standards are met in a suitably high number of cases (in other words, quality acceptance standards are established) e Monitoring actual quality e Taking control action in cases where actual quality falls below the standard e Procedures for inspecting and checking the quality of bought-in materials, and production output
KFC always aims to be able to serve delicious, hot and fast food to customers All products of KFC are completed by the dedication and thoroughness from the stages of preservation, preparation, processing and serving to customers
The quality of food at KFC first depends on the source of fresh and clean food, and then on the way it is preserved and processed At KFC, employees work in shifts, so the quality of the food also depends on many factors such as: experience, employees’ emotions, mechanical problems, So even if you follow a certain process, the products served to customers are all different Besides, the quality of food also depends a lot on the customer's perception, the same product but some people find it pale, some
17 people find it salty, Therefore, to overcome the situation on KFC need to recruit careful recruitment and selection of staff; instruct, communicate and train in a methodical and detailed way for new employees on how to serve customers, how to preserve and process food; regularly check on the kitchen staff on how to prepare food if the staff is not wrong and need immediate retraining to ensure that customers always have a great experience and highest satisfaction
The service process is how the service is created and the steps to achieve the expected result Because service is the result of an interactive process between customers and employees, it is difficult to identify When businesses want to check the quality of their services, check the service skills of employees in the company, it is impossible not to build a service process The service process helps customers visualize the benefits they will receive when using your services, which leads to buying behavior, and then helps customers to test the productivity of the process Whether the process meets the requirements of the contract between the two parties For employees in the company, that service process helps employees to be trained and improve their work productivity, by the standards set by the company Below is a diagram showing the service process of KFC :
Step 1: Personal preparation: each employee wears a mask, is neatly dressed, has a neat uniform, has neat hair, light makeup, is not flamboyant, does not wear bulky or too eye- catching jewelry And especially each individual will start work with a positive spirit and attitude, full of energy, and joy Work: The workplace, tables and chairs, equipment, cooking and eating utensils are all cleaned, operated and arranged in accordance with regulations
Step 2: Welcoming Each guest to KFC is politely welcomed, cared for, and supported, advised, and guided to the appropriate location by the staff Friendly smiling attitude communicates with guests by saying "KFC welcome you”
Step 3: Approach, record requests and receive money from customers: Many customers coming to eat for the first time may not be familiar with the name of the dish here After receiving the order from the customer, very quickly, the kitchen staff will receive the information and start processing On the customer side: they will pay at the counter, the staff will receive the money, say thank you and when the restaurant is too crowded, the staff will give the table card or call you to pick up the food according to the order number on the bill
Step 4: Serve, observe and take care of:
While waiting for customers, the staff always observe and take care when customers have needs For example, when a customer feels uncomfortable waiting too long, the staff will come to comfort the customer and urge the kitchen staff; While enjoying the food, customers with any request can call the remote staff at any time.
Step 5: Say Goodbye and Clean Up The receptionist smiled goodbye to the guests and they said KFC thank you! And then their staff comes and clears the table, ready to serve the next guest
Whenever coming to KFC, customers will feel the dynamism, friendliness and professionalism of the staff In terms of space, enjoy the combination of red and white tones with neat tables and chairs for a cozy and clean indoor space All of the above factors bring the best service to customers when coming to KFC
The whole system of KFC applies the standards of food hygiene and safety which to be issued by the Ministry of Health and it also has been granted certificates for the whole system
KFC's employees get a certificate about health standards and they still update constantly about international food safety standards Applying closed process, KFC brings the products also meet food safety standards for customers, do not contain toxic chemicals to affect the real life of clients
However, there are still some incidents such as Chicken head discovered in KFC takeaway, Customer becomes quadriplegic after eating KFC products, Found a piece of metal about the length of a finger in a chicken bought at KFC In the hearts of customers, there will be many questions about how KFC manages quality?
Chicken head discovered in KFC takeaway
A diner has expressed outrage after ordering from KFC Feltham in Twickenham (UK) A girl named Gabrielle wrote her full experience after giving it a 1 star rating
"I ordered chicken at KFC Feltham today and found this while unpacking fried chicken wings guys.”
Figure 6: UK diner finds a chicken head in her takeaway KFC hot wing meal (Kenh14,2021)
Immediately, KFC responded to this incident and frankly admitted the fault on their part
ORGANIZATIONAL STRUCTURE MODEL - - << 2 21222231 ‡ S2 kereeszee 24
Cashier —] Supply ke Lobby “| Cook 3 Rider
Figure 3: Organizational Structure Model in KFC’s Restaurant
The organizational model of KFC Restaurant is built according to the online structure model in a straight line with no overlap between stages and departments Each department has different functions and departments but still has a close relationship with each other and has the same goal of serving customers with the best quality e Store Manager:
The Store Manager is the person who has the highest authority in the restaurant and manages the restaurant in all aspects of work to ensure the correct function of the restaurant At the same time, take responsibility before the law for all business activities of the restaurant e Assistant:
Assistants execute the work plan set by the store manager and manage their shift Check the ingredients, food, preparation and processing of dishes before guests arrive, handle customer complaints
Periodically evaluate the work of junior staff, promote praise and punishment to the store manager
Perform tasks assigned by superiors
In charge of processing areas, raw material warehouse, staff management There are 3 assistants in | working day and there will be | assistant to schedule employees e Cashier:
As the person receiving orders from customers, handling requests when customers order more and solving problems in the process of packing goods for customers
This is the department responsible for collecting the daily budget and handing over the work to the manager at the end of his or her working hours ® Supply:
This is the department that provides cashier items to pay customers Employees of this department will directly make hamburgers and snacks, and will also be the receiving department in the cook department and recording the holing time for the products of the day © Lobby:
This is the department that contacts and solves customer inquiries about food and drinks and can help guests order more food This is the part responsible for cleaning tables, chairs, stairs, and toilets In addition, they also prepare dipsticks for customers when starting work © Cook:
This is the key part of the restaurant Employees of this department will directly fry chicken and preliminarily prepare the food, then switch to the supply department This is also the place to receive dishes for washing Cook department is also responsible for storing cold foods and cleaning the premises e Rider: This is a delivery worker, usually a male employee, who has a license and motorbike They have good health.
REQUIREMENTS FOR EMPLOYEES Á G00 L1, 0 1 911110111190 111g kg 21 1£, 25
KFC employees will become official employees of KFC Vietnam after a probationary period and training period At this time, they will have to go for regular health check-ups according to KFC’s regulations to ensure their health conditions And every year, all employees will get a free periodic health check
New employees will have to attend a skill training course taught by food safety experts, and be granted a certificate of food safety within 2 years by the Vietnamese Ministry of Health
In addition to the above requirements, KFC employees are not allowed to wear fingernails or wear jewelry such as rings and bracelets In addition to uniforms and hats, employees are required to wear dark jeans and dark shoes Before going to work, you must have your hair and clothes neat and wear a leather belt Female employees must also wear light makeup
7.4 Working shift at KFC restaurant
To ensure employees’ health and work efficiency as well as to ensure smooth work progress and avoid the situation of many jobs but lack of people when employees are busy or unexpectedly sick They can apply for leave or be flexible, who changing shifts without adversely affecting restaurant operations, KFC has arranged shift staff as follows: Full time:
25 © Shift A (6:00am-14:00pm): Employees are responsible for arriving 15 minutes early to prepare, check the condition of equipment, tools, and clean the store before opening time Prepare food ingredients, process, receive menu information from diners, order guests to carry out the processing © Shift B (14:00pm-22:00pm): The afternoon shift will finish the morning's work to prepare for the afternoon's work and continue the afternoon's work until the end of the shift At this time, the shift staff not only processed but also preliminarily processed, cleaned up and cleaned
This time is also subject to change depending on the number of guests If in the case of a large number of guests, but you have to process a large amount of dishes to serve guests, etc., this time division can also change depending on the level of guests and the division of labor is usually a pillow shift above and employees can work overtime Due to the characteristics of KFC: employees will be paid based on working hours per day and marked monthly based on time cards, so the number of working hours may change due to crowdedness
First as a Part-time employee for some organizations, customer demand is higher during certain times of the day and down at other times For example, high demand at 11:30 to 2pm, 6pm to 8:30pm and lower for the rest of the day Instead of hiring staff for full eight- hour shifts, the organization uses its capacity more efficiently by hiring part-time workers The second is to take advantage of available human resources, managers and employees should be trained as instructors At the same time, new and existing employees are also participants in improving training and working methods The change from increasing the number of training sessions for each employee in the store so that the staff will be fully trained in every part of the store, e.g kitchen, cashier, service, etc
Finally, KFC can use technology software Based on the software, restaurant owners know which employees are active In particular, restaurant owners can manage their restaurant chains remotely via devices Nowadays, there are many reliable software such as Mona PMS, Bamboo HR, OOC digiiHR, etc
Aim to improve and increase customer satisfaction by shortening service waiting time and the staff is always ready to respond to requests from customers At the same time, improving the shortage of human resources when the store is at peak hours, the number of customers increases suddenly but there is not enough manpower to handle Besides, there is a redundancy of human resources when the work is not evenly divided in different positions From that, towards the goal of solving the above problem and, in the long term, helping to increase the store's reputation by emphasizing a dedicated and dedicated service attitude
Appropriate business strategy, accurate prediction, prestigious and quality products are making KFC fried chicken brand in Vietnam market KFC has really attracted young people not only because of its convenience and luxury but also as a new trend among young people Come to KFC not only to enjoy the food but also to enjoy a modern style that is popular in the world With experience and success in the world market, when coming to Vietnam, KFC has risen to its fullest to affirm its position as the No | fast food here
VietNam, K., 2021 About Kfc | Kfc Vietnam [online] Kfcvietnam.com.vn Available at:
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Wu, H C., & Cheng, C C (2018) What drives experiential loyalty toward smart restaurants? The case study of KFC in Beijing Journal of Hospitality Marketing & Management, 27(2), 151-177
Nguyen, H T., & Anh, D B H (2018) GAINING COMPETITIVE ADVANTAGE FROM CSR POLICY CHANGE-CASE OF FOREIGN CORPORATIONS IN VIETNAM Polish Journal of Management Studies, 18(1), 403
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& Isai, K I A (2020) A Study on Customer Satisfaction Towards Ambiance, Service
27 and Food Quality in Kentucky Fried Chicken (KFC), Petaling Jaya Malaysian Journal of Social Sciences and Humanities (MJSSH), 5(4), 84-96
Pant, M From Wikipedia, the free encyclopedia Jump to: navigation, search For other uses, see KFC (disambiguation) KFC
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Giang, P H (2016) The Study of Factors that Influence Consumer Purchasing Decisions towards Top Three Fast Food Brands Including Kfc, Pizza Hut and Lotteria in HoChiMinh City, Vietnam
Ha Nam Khanh, G (2016) Nghiên cứu các thành phân giá trị thương hiệu chuỗi nhà hàng KFC tai TPHCM (Study on the Elements of the KFC Chain Brand Equity in Hochiminh City) Nghiên cứu các thành phân giá trị thương hiệu chuỗi nhà hàng KFC tại TPHCM (Study on the Elements of the KFC Chain Brand Equity in Hochiminh Ciy)(October 12, 2016)
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10.1 GROUP WORK — SELF-EVALUATION FORM
Case Study — Fast food restaurant services Presentation and group report operations of KFC
Student name & ID: Le Thi Thu Trang - 20071050
Do Thuy Tien - 20071044 Nguyen Thi Ngan - 18071171 What proportion of the group work did you contribute, in % terms?
Group members Management issue studied % Active Note
Le Thi Thu Trang Operation management model 100 % Active
Inventory Management Staff Management Recommendation
Nguyen Thi Ngan Operation management 100 % Active objective Supply chain management Recommendation
Do Thuy Tien Supply chain management 100 % Active
Inventory management Quality management Recommendation
1 What did you learn mainly from this activity, both about the topic covered as well as the group activity itself?
Through this course, we know the operation process of an organization in general and KFC in particular In addition, we have had an online team working experience to be most effective
2 Do you have any comments on the team's mission, process, or dynamics (e.g that will help us improve and develop the mission for next year)?
After finishing the course, we learned many useful skills and how to study documents from the teacher
3 Please describe how you used team feedback to develop your team report Our report was quite flawed and sketchy, so we put a lot of effort into perfecting the report First, we take note of the teacher's feedback Next, I use the sample lesson given by the teacher for reference and give a specific framework for the report in the most logical and clear way
Working environment is very important for employees to utilize their skills and capabilities
Training and motivational activities boost up the capability that increases productivity
* The restaurants’ service time was cut more than half by improving labor Ỹ productivity
+ Automated Inventory ement Nối li: technolo: