Before I dive into the details, I would like to put it out there that the information in this article does not contain the official statements from JFC nor its IT partner. The statements in this article are from IT insiders and those who have knowledge of this issue. I will also avoid naming the JFC partner at fault and any individuals.
Now let us pull the curtain on this chicken shortage issue. To make it clear, the common belief that JFC (Jollibee Foods Corporation) has a problem with its chicken suppliers and inventory is not true. They actually have dozens of suppliers and they have at least a weeks worth of inventory, enough to supply their stores. The problem lies in their system upgrade, This was their statement and many Pinoys didn’t believe it, well its actually true! JFC wanted to fast track it’s operations and sought the help of a partner to update their ERP systems (Enterprise Resource Planning).
This partner is actually is a multinational company with a good enough reputation. The problem all started when they landed the JFC contract. According to insiders, this company’s Philippines office did not have a big enough team to handle a project of this magnitude. This was the common conclusion because 1. They never heard of any projects implemented by this company using that ERP before and 2. This company was very vigilant in recruiting early last year. These activities led insiders to believe that they landed the JFC deal without proper staffing and they were in a rush to staff for this project. This is not good practice because it will be difficult to have a newly assembled team take on a big project right away and the company hasn’t been able to test their capabilities before being sent off to a huge project. Imagine recruiting soldiers to fight in the frontlines and you don’t have the time to test their know-how or abilities. You just interview them and take their word for it. Do you think that kind of process will ensure that you have the best soldiers?
The mishaps didn’t end there. So, this company hired local consultants in a hurry, that is already a big no no. They then decided to hire consultants from India and other countries as well. This proved to be a bad move as their make-shift local team had to work with foreign counterparts. This new hybrid team was formed so quickly, they didn’t have the teamwork down, which is necessary for any project, the team was not formed with skillsets fitting together in mind, they haven’t worked under a common methodology and a lack of understanding processes and standards.
Lastly, they proceeded with the “go live” without a backup in place. So when issues arose after the “go live”, no safety net was in place to serve as the backup while they fix the issue. The problem was that they could not track orders by the chains from their warehouses. The system could not produce delivery orders which resulted in misses in the supply chain and logistics. Now, if a backup was in place, they could have easily shut down the existing program in order to fix it while activating the old program so that the supply chain process would still go on without a hitch. ERP Insiders speculate that the issue could have been in the Warehouse Management upgrade of the Sales and Distribution side.
This project cost about P500 Million, there are 72 branches closed and a rough estimate of around P7 Million lost in sales per day. What a nightmare for the food giant and the ERP partner. Let’s hope that this and other companies will learn from this. This specific ERP industry is very small and consultants are in demand, it is my hope that the companies who are specializing in this ERP would learn to value their seasoned consultants and treat them with the utmost care. As you can see, when your manpower is subpar, you might land in deep water.
Incognito Daily 
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