1.

0 Facility Location:

Facility location, also known as location analysis, is a branch of operations

research concerning itself with mathematical modeling and solution of problems
concerning optimal placement of facilities in order to minimize transportation costs,
avoid placing hazardous materials near housing, outperform competitors' facilities,
etc.

1.2. KFC & Facility Location:

Presently KFC is branched out in every major cities of Malaysia with more than
60 outlets nation-wide. The outlets comprise of franchises, company owned and
affiliated. They used the proper method for facility location and layout analysis of
new or existing outlets.

Existing Locations of KFC in Shah Alam:

Section 13 Section 2 Section 14

Extreme Park D/T 1 Shah Lot 2, Jalan Bunga Melor Plaza Alam Sentral, 2,
Alam Extreme Park Jalan 2/18 Section 2 Shah Jalan Majlis, Seksyen 14,
Lompat 13/37, 40100 Alam, 40000 Selangor, 40000 Shah Alam,
Selangor, Malaysia Malaysia Malaysia

2.0 Factors That KFC Management Keep in Mind during Facility Location
Analysis:

There are several factors that influence the Facility Location Decision

2.1. Proximity to Customers:

o KFC Management during facility location analysis keeps in mind the
proximity of target customers and target market, so that the target
customer can be approached easily to outlets.
2.2. Business Climate:
o It is another important factors determined by the KFC during the
locations analysis. The location with favorable business environment
is selected for the KFC by the management.
2.3. Total Costs:
o The core objective of the KFC is to select a site with the lowest total
cost include land, labor, constructions, taxes and energy cost. By
minimizing the total cost they can be able to reduce the product cost.
2.0 Facility Location Techniques:

There are many analytical techniques that can be used in facility location
decision.

Some of these are:

1) Factor Rating

2) Cost-Profit-Volume analysis

3) Center of Gravity Method, and

4) Transportation and Simulation Models.

But first two methods Factor Rating & Cost Profit Volume Analysis are
more simple & suitable for KFC Because of easily understandable than Center
of Gravity & Simulation Method.

2.1 Cost-Profit-Volume Analysis:

When the fixed and variable costs for each site differ, Cost-profit-volume
analysis can be used to identify the location with the lowest cost.

Example

Suppose KFC is considering three alternative sites for its new production
facility.

Site A. Section 8

Site B. Section 9

Site C. Section 11

The Annual Production Cost associated with each alternative is a linear function
of the production volume. That is:

Total Production Cost = (Fixed Cost) + (variable unit cost) x (annual production
volume)

Assume that the expected annual production volume is 250.000 units.

And further assume that:

(x: production volume = 250.000)

For Site A: Prod. Cost = 10.000.000 + 250 x

For Site B: Prod. Cost = 25.000.000 + 150 x

For Site C: Prod. Cost = 60.000.000 + 50 x

At a production volume of 250.000 units, site B has the lowest cost, because

For Site A: Prod. Cost = 10.000.000 + 250 (250.000) = 72.500.000

For Site B: Prod. Cost = 25.000.000 + 150 (250.000) = 62.500.000

For Site C: Prod. Cost = 60.000.000 + 50 (250.000) = 72.500.000

This graphic shows that annual production cost changes with different
production volumes.
3.0 Facility layout:

Means planning And Arrangement of all machines, utilities, employee

workstations, customer service areas, material storage areas, aisles, restrooms,
lunchrooms, internal walls, offices, and computer rooms, for the flow patterns of
materials and people around, into, and within buildings Infrastructure services
such as the delivery of line communications, energy, and water and the removal
of waste water all make up basic utilities.

3.1. Factors that influence layout:

Volume, weight of items to be produced.
Nature of the service to be provided.
Cost of the building to house the operation.
The fragility of the product or component

3.2. KFC Facility Layout:

Internal & External layout of KFC outlet is attractive and charming all over
the world. Ideal color schemes, pleasant lighting outlets, comfortable sitting
arrangement, fully trained employees and their proper work division, State of the art
interior beautification, speedy & appropriate cooking process, special club/block for
kids, etc. are the chief characteristic of the KFC layout.
3.3. Advantage of KFC Good Layout:
Reduces bottlenecks in moving people or material.

Minimizes materials-handling costs.

Reduces hazards to personnel.

Utilizes labor efficiently.

Increases morale.

Utilizes available space effectively and efficiently.

Provides flexibility.

3.4. KFC Facility Layout Map:

KFC fallow about the following facility layout for their outlets round the world.
3.5 KFC Process Layout Map:

KFC use process layouts because of variability in customer processing requirements.

The KFCs old and new process schematic diagram are presented blow.

KFC Old Process Layout:

Customer
Place Order

Raw
Finished
Material
Goods
Cook Assemble Deliver

KFC Modern (New) Process Layout:

Customer
Place Order

Raw W. I. P.
Material Cook Assemble Deliver
4.0 Quality Control Management

One can use a fishbone diagram when identifying possible causes for a problem
especially when a teams thinking tends to fall into ruts. Below is the example of
service quality of KFC that mapped into fishbone diagram.

Service Quality of KFC Fishbone Diagram

People

In people section there are motivated worker and work time division.

For motivated worker, the people that work in one of the KFC branches are
acting as a team to produce excellent working output by introducing the feast
ceremony for workers on every closing time.
Not only it helps in building strong motivation and relationship among
workers, but it also help to prevent wasting unsold food.
For work time division, the people that work in one of the KFC branches are
working in their respective shift that had been agreed by both the worker and the
manager.
This helps in preventing workers from collapse or becoming too tired during
working hour that will decrease the working output.
Method

In method section there are distance of supply and variety of meals.

For distance of supply, the range between the supplier and the KFC branches are
low and the distance between the two of them are near. This is to provide a faster
supply, transportation from the supplier to the KFC branches to help the rotation
of the products and to decrease the decay level of the supply during the
transportation of the supply
For a variety of meals, the arrangement of the food in every meal is unique to
provide a wide range of selection product and interesting meal set. The variety is
included for every age respectively, and for a different number of customers such
as Chicky Meal with toys are targeted for the children while the Kentucky Bucket
with many foods are aimed to the customer that comes to their family.

Measurement

In method section there are responsiveness and food assurance.

For responsiveness, every staff in the KFC branches is particularly responsive

to provide a quick response for any questions and quick food preparation
service. This helps in improving the customer satisfaction since most of the
customers are in a rush with time due to work or other personal matter so to
the majority of the customer the faster the service the better.

For food assurance, the safety of every product in the KFC branches has been
ensured since all raw material suppliers are required to submit a statutory
declaration to confirm that they comply with Halal requirements in relation to
the manufacturing process, storage and transportation of product supplied. The
products of the KFC branches had been passed through The Halal Certification
Process - Locally-Manufactured Products that being endorsed by JAKIM.
Machine

In method section there are multiple machine and auto-timed machine.

For multiple machine, every machine in the KFC branches are not only one, but
there are many machines being provided. This is to ensure the faster food
production with the usage of many machines simultaneously and also to prevent
the machine from being broken so easily due to singular usage of only one
machine to produce many foods.
For auto-timed machine, every machine in the KFC branches has been
provided with an auto-timed machine to ensure the accuracy of the cooked
food time and to prevent overcooking. This helps in providing a food that not
only fast to be served but also tasty due to being cooked with a suitable time
period.

Environment

In method section there are courtesy and convenience.

For courtesy, every staff in the KFC branches has been reminded to be very
courtesy to every customer to provide an excellent service to the customer
since the aim are not only to give quick service but also a nice service to the
customer so that the customer do not feel reluctant to come again since they
had already feel comfortable when coming to the KFC branches.

For convenience, every machine in the KFC branches has been provided with
an easy list of order and service so that every customer that comes will feel at
ease and not stressed with the service. The convenience model that had been
introduced by the KFC branches are the simple meal order selection, take away
service, drive-thru service, food delivery service and fast food production
provided.
Materials

In method section there are recipe secrecy and food from own farm.

For recipe secrecy, just as most people already know has been kept their recipe
as a secret to maintain the uniqueness of the product that do not have any
substitutes that can have the same deliciousness as the product. This help in
keeping the quality of the foods and the tasty feeling that cannot be duplicated
so that the customer can feel satisfied with the food goodness and uniqueness.

For food from own farm, every chicken food that has been produced in every
KFC branches are taken from the KFC farm itself. This help to ensure the quality
of the supply by growing the resource material itself so the power to choose the
best quality of the material