Popeye’s Chicken and Stockouts

Posted on March 19, 2012 | in Concession Stand, Inventory, Small Business | by

And this is exactly why companies carry high amounts of inventory when they don’t need to – fear of stockouts.

This problem could have been prevented without having to hold significantly high amounts of excess inventory – a little better planning for the increased traffic and business on the corporate side with marketing and communication with the individual franchises to tell them to order more for this high volume time period would have made this traffic spike a blip as opposed to a disaster.

This is not to point the finger at the corporate level of Popeye’s or the marketing department or the franchises themselves. (The customers obviously have that handled just fine.) However, the swiftest reaction would be to simply stockpile inventory of chicken so this never happens again. As you’ll know, the swiftest reaction is not always the smartest reaction.

But what was the root cause of the stockouts?

Was it poor planning by the franchises? Were they aware of the discount promotion and simply did not prepare for the traffic?

How about marketing that missed the target for demand? They obviously recognized the benefits of the promotion for the customers but when franchise dining rooms are closed by mid-afternoon due to no inventory you have a significant miscalculation.

Was the promotion well-communicated from the marketing folks to the franchise owners? How can we know for sure how prepared the franchise owners were for the volume? Did marketing just tell the franchise owners there was a promotion or was there also a volume multiplier communicated so franchises could know how much more chicken to order for the event?

Anyway, when teams, organizations, and companies fail to communicate and adequately prepare, there’s a chance you’ll make the news and land in a viral video.

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One Response to “Popeye’s Chicken and Stockouts”

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