A Problem of Lack of Supply Planning
What do you do if an internet-breaking campaign creates a shortage of products?
For Popeyes, it all started with a simple tweet, that took only 15 minutes to write and has now been shared over 85,000 times, to create a social media feud that lead to record breaking demand for its products. Popeyes initially reaped the benefits of publicity amongst the battlefield but, without adequate supply planning, the spat quickly led to shortages in supply for Popeyes. Drive-thru lines caused traffic jams in the roads, and some employees reported large orders and long shifts.
The Chicken Wars of 2019 between Popeyes and Chick-fil-a is a cautionary tale about the havoc social media can wreak on supply chains. To avoid squandering opportunities afforded by unprecedented demand, supply chains need to run like well-oiled machines. Enter supply planning.
Here are four important lessons from the Chicken Wars of 2019.
Supply Planning and Collaborative S&OP
Collaborative and cross-functional S&OP is no longer optional in a business environment where social media can upend supply chains in a moment notice. Collective intelligence from marketing, sales, procurement, finance, etc. helps decision makers have access to current information. Advances in technology such as predictive analytics and cognitive computing empower top companies to build forward-looking, dynamic planning systems that are nimble and can respond quickly to spikes in demand — or better yet, anticipate that they might be coming.
In consumer facing industries, social media is a must when it comes to the company’s planning. Demand sensing tools can help organizations like Popeyes better track and account for spikes in demand as the result of viral social media. Using artificial intelligence and machine learning, these tools can mine massive amounts of online data to determine social sentiment and model its impact on demand. Used alongside statistical forecasts, POS data, and other inputs, demand sensing can help fine-tune planning and forecasting by tracking customer sentiment in real time as it unfolds.
The internet-breaking chicken war between Popeyes and its competitors is something that certainly could not have been fully anticipated. It is, though, in every company’s best interest to plan for what it would do, should a scenario like this would occur. Supply-chain leaders should plan for a wide range of scenarios. The more comprehensive an organizations collection of plans, the more versatile it can be when responding to the unexpected. In order to drive competitive advantages, companies need to collaborate with suppliers in order to develop a responsive replenishment system. This means that suppliers need to be kept up-to-date with trends that have the potential to turn the supply chain on its head.
Supplier Relationship Management
Battles, like the chicken war, with competitors are won or lost on the strength of the company’s supplier relationships. While it seems hard to believe that Popeyes could run out of chicken sandwiches, it wasn’t the lack of chicken that was the issue. The components of the sandwich included a custom cut of chicken special type of flour and a barrel-cured pickle, that take time to source from suppliers.
More than a month after Popeyes completely sold out of its famed chicken sandwiches, they were finally back. Just a short while after its return, though, customers began tweeting that they were sold out again at some locations. This is not the first time social media upended supply chains, and while it remains to be seen who will in the spotlight next, one thing that is for sure is that social media outburst will always happen – It is in every company’s best interest to be ready if it were to affect them, or risk losing these battles to competitors.