1. Chick-fil-A Supply Chain Presentation
Bobby Baptist
Michael Haddad
Dermot Kennedy
Laurel Krauth
Sabrina Spradley

2. Brief History Founded: 1946 by Truett S. Cathy
Original Location: Hapeville, Ga.
Original Name: Dwarf Grill because of small size.
Later the name was changed to The Dwarf House.
After the introduction of the chicken sandwich, the name Chick-fil-A
Dwarf House was used.
Innovation: Pioneered the In-Mall concept in 1967

3. Current Operations Currently over 900 stores.
11 Dwarf Houses, 746 Free Standing/Mall Units,
158 University/Hospital locations, 1 Truett’s Grill
Expected to reach $1 billion in sales in 2000
Third largest quick serve Chicken restaurant
Annual sales increasing at 18% annually
Expanding to international market
4 locations in South Africa

4. Current Locations

5. Major Competitors Chicken Market
Kentucky Fried Chicken ($8.9 B annual sales)
Popeyes ($1.3 B annual sales)
Fast Food Market
McDonalds (approx $30 B)
Wendy’s ($2 B annual sales)

6. Change of Distribution Service
On May 5, 2000 Chick-fil-A, Inc. announced that it planned to change food distribution services from AmeriServe Food Distribution, Inc. for its entire system of Chick-fil-A® restaurants.
"Chick-fil-A has already arranged for distribution services for our more than 900 locations as we leave the relationship with AmeriServe," said James L. S. Collins, president and chief operating officer of Atlanta-based Chick-fil-A, Inc. "Our distribution services will now be handled by MBM Corporation based in Rocky Mount, NC. They will service our entire system."
Privately-held MBM Corporation is based in Rocky Mount, NC with annual sales of $4 billion. The company currently operates 29 distribution centers with distribution capabilities throughout the U.S. and internationally. It also handles distribution services for other major quick-service chains.
Complete switchover was completed in August, 2000 with Chick-fil-A expected to provide 7% of MBM’s total sales.

7. MBM Distribution Centers

8. MBM Sectors

9. MBM Operations Common Products supplied by MBM
Chicken (breakfast, sandwich, nuggets, strips)
Waffle Fries
Carbonated Drink Syrups
Paper Products (including styrofoam cups)
Condiments
Eggs
Other meat products
Deserts (Ice Cream, Brownies, Hershey’s syrup)
Cleaning supplies

10. Order Quantities of Common Products per Week
Typical Operations
(Values are taken from Howell Mill Chick-fil-A and The Riverdale Dwarf House locations.)
Chicken - 60/ 35 lb boxes per week
Chicken Strips - 5/ 36 lb boxes per week
Chicken nuggets - 20/ 30 lb boxes
Seasoned Coater (flour) lbs per week
Bread - 72 racks (32 buns per rack) per week
Lettuce (Salad) - 3/ 30 lb bags shredded per week.
Lemons - 5/ 15 lb boxes per week
Coke syrup - 7 boxes per month
Waffle Fries - 90 (28 lb boxes/week)
Ice Dream Mix - 24 (7 lb bags per week)

11. MBM Transportation All shipments made by truck
typical truck capacity 14 tons
Trucks refrigerated and compartmentalized
Loaded in reverse order so that next stop’s load is
closest to door (Minimizes stop time)
Since trucks make multiple stops, all attempts are made to send
trucks out with full loads. (Minimizes transportation costs)
Trucks with less than full loads serve multiple restaurants
Trucks typically cover distances up to 400 miles.

12. Chick-fil-A inventory Management
Safety stock:
Food items - 5days
Paper Products weeks
Out of stock items:
Purchased from local vendors or from other local
Chick-fil-A stores

13. Other suppliers Fresh Produce: Alliant Food Distributors:
Lemons
Lettuce
Tomatoes
Carrots
Cabbage
Onions
Pickles
Orders placed weekly. Trucks arrive bi-weekly

14. Cagle Operations Supplies: Chicken Nuggets Chicken Strips
Chicken Breasts (Breakfast and Sandwich)

15. Product Flow Manufacturers (Heinz,Kraft,Tyson) Distributor (MBM)
3 day lead time
Chick-fil-A, Inc.
Consumer
1 day lead time
Local Produce Growers
Distributor (Alliant) no
Nominal lead time
Stockout?!
Local Chick-fil-A stores or
Local External Suppliers
Order necessary items that are out of stock
yes

16. Relationship with Distributors
MBM: 7% of annual sales
MBM provides Chick-fil-A with order quantity
software
Uses 4 week previous average order quantity to predict
next week order quantity. The Operator can accept this
value or increase/decrease as he/she deems necessary.
Alliant: 4% of annual sales
Orders placed through a weekly order guide supplied by
Alliant.
Weekly guide uses previous 2 week demand to predict
next week’s demand. 1/4 of this value is typically added
for safety stock.

17. Conclusions
Chick-fil-A is one of the leading quick serve chicken restaurants
MBM was selected over Ameriserve to help minimize costs by delivering supplies in a more efficient way
MBM supplies Chick-fil-A with software to help in the reorder process
Chick-fil-A is expected to reach $1 Billion in sales due to newly implemented inventory management
Chick-fil-A currently plans continued growth while still producing a quality product