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Jollibee Foods Corporation has attributed its supply chain problems to a major systems upgrade for the largest food service network in the Philippines, a situation that earned the moniker #ChickenSad from netizens, but from the perspective of an information technology management expert the situation could have been avoided if only the timeline was executed in a more relaxed manner.
In a blog post, Calen Martin Legaspi, CEO of IT consulting firm Orange & Bronze Software Labs, claimed the team behind the technology systems upgrade by Jollibee did not have a "sizable team" specializing in ERP (enterprise resource planning) system.
ERP is a business process management software, which allows a company to use a system of integrated applications to manage and automate business processes.
Legaspi said the project was outsourced to a large multinational vendor. He did not name the company.
"[The] vendor seemed to be having trouble filling the positions required for the project, which is not surprising considering how much in-demand that specialization is," he noted.
So the company decided to hire people from India and other countries to staff the project.
"Assembling a large team of outsiders quickly is troublesome," Legaspi said.
Although the root cause was attributed to a shift from one ERP system to another – Oracle-based to SAP-based), Legaspi also blamed the tight timeline of 18 moths within which to implement the project.
"Just to give this some perspective, many of the projects I've seen costing just 1/20 of this one usually have a 24-month timetable. I'd expect that a project of this size would require three to five years to properly implement, from inception to transition," he said.
"Maybe this was just a first phase, but unfortunately for Jollibee it has already been a costly first phase. Let's hope some methodology changes have already taken place to avoid costly mistakes in the future," Legaspi noted.
The systems upgrade caused the temporary closure of the fast food restaurant's 72 stores in Metro Manila and nearby cities.
Jollibee likewise reiterated that it does not suffer from shortage of supply.
"The Jollibee Group has sufficient raw materials, finished products and production capacity to meet the consumer demand for the entire month of August and for the months ahead, both for local and imported goods, in line with its sales and product supply planning," the publicly listed company said in a disclosure to the Philippine Stock Exchange (PSE). Jollibee shares are traded on the PSE.
"The products are in the company's various commissaries, warehouses and logistics center," it added.
According to the company, it operates the largest food service network in the Philippines. As of June 30, it was operating 2,244 restaurants in the country that included the Jollibee brand (839 outlets), Chowking (406), Greenwich (207), Red Ribbon (298), Mang Inasal (456) and Burger King (38).
Abroad, it was operating 589 stores that included Yonghe King-China (311), Hong Zhuang YuanChina-43, San Pin Wang-China (44), Jollibee (111, including 30 in the US, 49 in Vietnam, 12 in Brunei, 10 in Saudi Arabia, four in Qatar, three in Kuwait, one in Hong Kong and two in Singapore), Red Ribbon in the US (31), Chowking (46, including 19 in the US, 20 in the UAE, five in Qatar and two in Oman), and three Jinja Bars in the US.
The JFC Group had a total of 2,833 stores worldwide.
It also has a 50 percent interest in the following joint ventures: Highlands Coffee with 78 stores in Vietnam and the Philippines, Pho 24 with 57 stores in Vietnam, Indonesia, Philippines, HongKong, Macau and Cambodia, Sabu with 12 stores in China.
Netizens still #ChickenSad?
While some netizens are not that much into #ChickenSad anymore, many are still craving for their favorite Chicken Joy on the fast food restaurant's menu.
– VS, GMA News