KFC has been forced to close many of its stores as they have run out of chicken! This seems a bit crazy, right? The issue started when they switched their delivery contract to DHL. DHL have blamed the supply disruption on “operational issues”. The BBC has reported that 646 out of the 900 UK outlets are closed due to this disruption and it’s unclear how many more may be affected.
This disruption will more than likely cause a loss of earnings for KFC and badly hamper DHL’s reputation. What does this mean going forward? Well, the fact that KFC is estimated to be losing £1 million a day means they could struggle to pay some suppliers and in turn, this could cause their suppliers to struggle. The “Domino Effect” could strike again. DHL may also lose credibility for such a high-profile mistake and in turn lose out on business.
Out of your control
The situation that KFC faces is an example of how unforeseen circumstances can affect your business. If KFC were to struggle to pay suppliers because of an issue with DHL it would be likely that smaller business owners would face a far tougher struggles. Once again it becomes clear that those that suffer are not only the businesses that sell directly to KFC but a string of suppliers.
What can be done?
Trade credit insurance is here to support you even when the unforeseen happens. You and your business could be destabilised by many causes that can affect cash flow. That is why CMR has been helping SMEs for over 27 years by protecting their debtor book from bad debt and helping them grow. Should you wish to discuss the importance of credit insurance further and to find out how much a managed credit insurance policy may cost, please do not hesitate to get in touch.