SCH4801
ASSIGNMENT 3
DUE DATE: 1 OCTOBER 2026
, SCH4801 ASSIGNMENT 3 2026
DUE 1 OCTOBER 2026
QUESTION 1
1.1 Supplier localisation
a) Two strategic benefits and impact on KFC SA supply chain
Localisation sourcing poultry and other inputs from South African producers delivers two
clear strategic benefits aligned with supply-chain philosophy of reliability, total cost of
ownership and resilience (Ambe et al., 2022, Chapters 7 & 10; Study Guide Lesson 7 &
10).
Enhanced supply reliability and quality control / food-safety alignment
All poultry is sourced locally and subjected to 34 quality checks. This shortens the
chain, reduces lead-time variability and allows intensive supplier audits and
biosecurity protocols. Impact: During the 2023 avian-flu outbreak, KFC could rapidly
intensify audits and protect continuity for the majority of its - 960 outlets (only Lesotho
stores closed temporarily). The star-rating system and second-/third-tier visibility
further enable quick substitution, lowering stock-out risk and protecting brand integrity
(fresh, wholesome meals).
Inclusive economic participation and risk diversification through SME
development
Structured mentoring, inclusive-procurement targets and quarterly supplier-
development scorecards build a broader, more resilient local supplier base especially
rural/previously disadvantaged SMEs. Logistics providers are also evaluated on
empowerment metrics. Impact: Reduces over-reliance on a few large suppliers,
, supports BBBEE/transformation goals, and creates longer-term collaborative
relationships that improve innovation e.g. co-development of biodegradable
packaging) and cost control, while aligning with corporate social responsibility (CSR)
objectives.
b) Two potential risks and impact
Concentrated exposure to local disruptions (disease, weather, infrastructure)
Heavy reliance on South African poultry producers creates vulnerability to avian flu,
drought or feedstock shortages. Impact: The 2023 outbreak already forced temporary
store closures in Lesotho and required emergency biosecurity reinforcement. In a
country with intermittent power and logistics challenges, localised supply can amplify
rather than buffer shocks, increasing the need for higher safety stock or expensive
airfreight contingency.
Limited access to global cost or technology advantages / potential capacity
constraints
Local producers may not always match the scale, specialised genetics or lower input
costs available internationally. Impact: Higher unit costs can pressure margins in a
price-sensitive market; capacity bottlenecks during demand spikes (public holidays, new
product launches) may force KFC to accept higher inventory holding costs or temporary
quality compromises, undermining the total-cost-of-ownership (TCO) benefits that
localisation is meant to deliver (Ambe et al., 2022, Chapter 10).
Overall, localisation strengthens brand control and social licence but requires robust
dual-sourcing contingency, real-time visibility and continuous supplier development to
keep residual risk acceptable.
, 1.2 United Nations Sustainable Development Goals (SDGs)
KFC’s sustainability strategies align with at least two SDGs (Ambe et al., 2022, Chapter
12 on green supply-chain management and environmental management systems / ISO
14000).
SDG 12 Responsible Consumption and Production
KFC removed single-use plastic straws from >900 restaurants (eliminating ~60 million
units annually), shifted to paper-based packaging (cutting plastic- 40 % by 2022) and is
on track for all consumer-facing plastic to be recyclable, reusable or compostable. It
also co-develops fibre-based materials and converts used cooking oil into biodiesel.
Motivation from case: These actions directly reduce waste generation and promote
sustainable packaging across the supply chain, matching SDG 12 targets on resource
efficiency and waste reduction.
SDG 13 Climate Action (and linked SDG 7 Affordable and Clean Energy)
KFC’s Planet 2050 agenda targets a 46 % reduction in greenhouse-gas intensity per
restaurant and per tonne of product/packaging by 2030. Practical steps include piloting
solar installations to reduce dependence on Eskom’s unstable grid and using biodiesel
for delivery fleets. Motivation from case: Digital platforms track environmental
performance data; these initiatives lower the carbon footprint of logistics and operations
while building resilience against energy insecurity.
1.3 Transportation modes
As Supply Chain Manager, evaluate road and rail for KFC’s fresh/frozen, temperature-
controlled, high-frequency restaurant network (Ambe et al., 2022, Chapter 16 - The role
of transport in the supply chain; Study Guide Lesson 16).
ASSIGNMENT 3
DUE DATE: 1 OCTOBER 2026
, SCH4801 ASSIGNMENT 3 2026
DUE 1 OCTOBER 2026
QUESTION 1
1.1 Supplier localisation
a) Two strategic benefits and impact on KFC SA supply chain
Localisation sourcing poultry and other inputs from South African producers delivers two
clear strategic benefits aligned with supply-chain philosophy of reliability, total cost of
ownership and resilience (Ambe et al., 2022, Chapters 7 & 10; Study Guide Lesson 7 &
10).
Enhanced supply reliability and quality control / food-safety alignment
All poultry is sourced locally and subjected to 34 quality checks. This shortens the
chain, reduces lead-time variability and allows intensive supplier audits and
biosecurity protocols. Impact: During the 2023 avian-flu outbreak, KFC could rapidly
intensify audits and protect continuity for the majority of its - 960 outlets (only Lesotho
stores closed temporarily). The star-rating system and second-/third-tier visibility
further enable quick substitution, lowering stock-out risk and protecting brand integrity
(fresh, wholesome meals).
Inclusive economic participation and risk diversification through SME
development
Structured mentoring, inclusive-procurement targets and quarterly supplier-
development scorecards build a broader, more resilient local supplier base especially
rural/previously disadvantaged SMEs. Logistics providers are also evaluated on
empowerment metrics. Impact: Reduces over-reliance on a few large suppliers,
, supports BBBEE/transformation goals, and creates longer-term collaborative
relationships that improve innovation e.g. co-development of biodegradable
packaging) and cost control, while aligning with corporate social responsibility (CSR)
objectives.
b) Two potential risks and impact
Concentrated exposure to local disruptions (disease, weather, infrastructure)
Heavy reliance on South African poultry producers creates vulnerability to avian flu,
drought or feedstock shortages. Impact: The 2023 outbreak already forced temporary
store closures in Lesotho and required emergency biosecurity reinforcement. In a
country with intermittent power and logistics challenges, localised supply can amplify
rather than buffer shocks, increasing the need for higher safety stock or expensive
airfreight contingency.
Limited access to global cost or technology advantages / potential capacity
constraints
Local producers may not always match the scale, specialised genetics or lower input
costs available internationally. Impact: Higher unit costs can pressure margins in a
price-sensitive market; capacity bottlenecks during demand spikes (public holidays, new
product launches) may force KFC to accept higher inventory holding costs or temporary
quality compromises, undermining the total-cost-of-ownership (TCO) benefits that
localisation is meant to deliver (Ambe et al., 2022, Chapter 10).
Overall, localisation strengthens brand control and social licence but requires robust
dual-sourcing contingency, real-time visibility and continuous supplier development to
keep residual risk acceptable.
, 1.2 United Nations Sustainable Development Goals (SDGs)
KFC’s sustainability strategies align with at least two SDGs (Ambe et al., 2022, Chapter
12 on green supply-chain management and environmental management systems / ISO
14000).
SDG 12 Responsible Consumption and Production
KFC removed single-use plastic straws from >900 restaurants (eliminating ~60 million
units annually), shifted to paper-based packaging (cutting plastic- 40 % by 2022) and is
on track for all consumer-facing plastic to be recyclable, reusable or compostable. It
also co-develops fibre-based materials and converts used cooking oil into biodiesel.
Motivation from case: These actions directly reduce waste generation and promote
sustainable packaging across the supply chain, matching SDG 12 targets on resource
efficiency and waste reduction.
SDG 13 Climate Action (and linked SDG 7 Affordable and Clean Energy)
KFC’s Planet 2050 agenda targets a 46 % reduction in greenhouse-gas intensity per
restaurant and per tonne of product/packaging by 2030. Practical steps include piloting
solar installations to reduce dependence on Eskom’s unstable grid and using biodiesel
for delivery fleets. Motivation from case: Digital platforms track environmental
performance data; these initiatives lower the carbon footprint of logistics and operations
while building resilience against energy insecurity.
1.3 Transportation modes
As Supply Chain Manager, evaluate road and rail for KFC’s fresh/frozen, temperature-
controlled, high-frequency restaurant network (Ambe et al., 2022, Chapter 16 - The role
of transport in the supply chain; Study Guide Lesson 16).
