KFC - FACILITY

LOCATION AND LAYOUT

 Group Members:

Harshal shah krunal mehta

Nutan shah Hitanchi kulkarni

Devshri jha Nirav sompura

Pankti parikh Ridham raval

Prabhav patel Manthan mehta

FACILITY LOCATION
LOCATION

KFC & Facility Location :
KFC Corporation, or KFC, founded and also known as Kentucky
 Fried Chicken is a chain of fast food restaurants based in Louisville,
 Kentucky.

 KFC is the third largest fast food chain with over 12,200 outlets in
 99 countries. KFC has maintained its title, for the last 60 years, of being the
 chicken Experts.

 Opening the first KFC outlet in Gulshan-e- Iqbal in 1997.KFC wore the title of being the
market leader in its industry.

 Serving delicious and hygienic food in a relaxing environment made KFC everyone’s
favorite. Since then, KFC has been constantly introducing new products and opening new restaurants
for its customers.

 Presently KFC is branched out in eighteen major cities of Pakistan(Karachi, Lahore,

Gujranwala, Sukkur & Muree) with more than 60 outletsnation-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.Facility location involves the evaluation
 of various sites for a new facility.
 Existing Locations of KFC In Lahore:

 Barket Market

 Defence

 Cavalry Ground

 Shadman

 Mall Road

 Thokar Niaz Baig

 M.M. Alam Road

 Y-Block

 GT Roa
Factor that KFC management keep in mind during
facility location

 There are several factors that influence the Facility Location

 Decision.

 Proximity to Customers,

 Business Climate,

 Total Costs,

 Infrastructure,

 Quality of Labor,

 Host Community,
Facility location

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”.
Facility location

Method of Factor Rating:

In factor rating method, first we must identify the Most Important Factors in evaluating
alternative sites for the new facility. Then we should assign a weight between0 and100 to
each of these factors. Each alternative location will then be rated based on these factor
weights. The most weighted alternative is selected as the best alternative.

Example:

Suppose KFC is considering three alternative sites for its

new facility locations.

Site A. Moon Market


Site B.Sha dra

Site C. Chock Chu Burg
Facility layout

 Method of Factor Rating(Cont…)

 After evaluating the firm’s Needs, the Managers have narrowed the list of
Important Selection Criteria down into three major Factors.

 Availability of skilled labor

 Availability of suitable Infrastructure, and

 Proximity of target customers.

Continued…….
 Weights reflecting the relative importance of each factor have been
assigned as follows:
Factor Site A Site B Site C

Available of skill 70 70 50
labour

Available of raw 60 40 90
materials

Proximity to the 70 95 60
firms market

Now we will multiply each score by its corresponding factor weight:

Weighted scores are calculated as: (Site Score)x (Factor Weight)
 In this case, Site“ A” appears to be the best choice with largest weight score. Therefore, factor rating method is very sensitive to the weights
assigned to each factor

Column1 Column2 Column3 Column4

Factor site A Site B Site C

Score weighted Score weighted Score weighted

70 35
Skilled labour 70 35 50 25

60 18
Raw metrials 40 12 90 27

70 14
material prox 95 19 60 12

Total weighted
scores 67 66 64
 From these results, the largest total weight is for Site A.

 It appears to be the best location.

 What happens if we change the factor weights.

 Lets use the following factor weights:

 Skilled labor: 0.45;

 Raw Materials: 0.40; and

 Market: 0.15

 Then the following results are obtained:

 In this case, Site“ C” appears to be the best choice with largest weight
score.
Therefore, factor rating method is very sensitive to the weights
assigned to each factor

Column1 Column2 Column3 Column4

Factor Site A Site B Site C

Score Weighted Score Weighted score weighted

Skillled labours 70 31.5 70 31.5 50 22.5

Raw materials 60 24 40 16 90 36

Market prox 70 10.5 95 14.25 60 9

Total weighted
scores 66 61.75 67.5
Facility layout

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. Moon Market
Site B.Sh ad ra
Site C. Chock Chu Burgi

 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)
Facility layout
Cost-Profit-Volume Analysis (Cont…)

 Assume that the expected annual production volume is 250.000 units. And
further assume that:
(x: production volume = 250)

For Site A:Prod. Cost = 10,000 + 250x

For Site B:Prod. Cost = 25,000 + 150x

For Site C:Prod. Cost = 60,000 + 50x

 Based on these information, Which site has the lowest cost?

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

 For Site A:Prod. Cost = 10,000 + 250 (250) = 72,500

 For Site B:Prod. Cost = 25,000 + 150 (250) = 62,500

 For Site C:Prod. Cost = 60,000 + 50 (250)= 72,500

Facility layout
 Facility layout:

 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 smooth flow patterns of materials and people around, into,

and within Buildings Infrastructure services
Facility layout
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

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
Facility layout
Facility layout
Advantage of KFC’s Good Layout:

 Reduces bottlenecks in moving people or material.

 Minimizes materials-handling costs.

Reduces hazards to personnel.

Utilizes labor efficiently.

Increases moral.

Utilizes available space effectively and efficiently.

Provides flexibility.

Provides ease of supervision.

Facilitates coordination and face-to-face

communication where appropriate

 Conclusion And Recommendation:

 KFC can progress rapidly by identifying new facility locations

and increasing existing target market and facility locations by
launching new competitive product chain at minimum cost. KFC’s
Unity Drive had a simple but essential message and objective.

 To bring together the people of Pakistan by promoting in the

words of KFC founder, “Unity, Faith & Discipline.

 The campaign proved to be a successful initiative in not just

providing hope for our patrons, but also allowed KFC Pakistan to
take an effective step forward during tough times and entrust
other responsive companies to act in a similar manner.
THANK YOU