#Chickensad costing Jollibee Millions a day.

IN THE past weeks the trending #Chickensad has been dominating the Philippine social media universe in reaction to the sad turn of events for Jollibee Food Corporation’s (JFC) main staple, Chicken Joy. Apparently, what they said was a technology glitch in the systems upgrade they are undergoing failed to produce the delivery orders for the humungous food chain’s branches causing misses in the supply chain and logistics. In other words, no Chicken Joy made it to the branches and into the mouths of the poor hungry masses. Says one JFC insider:

SAP breakdown after go live…  commissary can’t deliver Chicken Joy and Spaghetti because they can’t issue delivery receipts. Stock is available and with six days inventory. But stores aren’t getting the goods hence closing down the stores.

One of the #Chickensad memes going around the social media universe

One of the #Chickensad memes going around the social media universe

So nasty was the problem that as of last count some 72 Jollibee branches were actually closed down (rather than suffer a riot, perhaps?). Where this will all lead is not clear at this point, but present and former Jollibee key insiders estimate that the daily losses run in the millions. As we are told:

There’s an official press release — a system issue. Anyway, they already spent half a Billion on systems consultants and given that they closed some 3.2 percent of total system wide stores they are taking a hit on the P180M per day revenue.

Simple computation places that at about P7 Million loss per day, rounded off of course. But that’s just us. From what we gather, more problems… some quantifiable, others not but much worse… are in the offing for the publicly listed JFC.

Just how big is chicken to the corporation’s business? Well, aside from the P180 million income JFC averages a day from Chicken Joy, chicken has become the main profit center of the whole group. Apparently, chicken has the best profit margin among all the products they have, so they earn more pesos for every peso spent than burgers, fries or anything else.

JFC’s chicken-centric profit advantage was so good that even their Chowking is pushing its Chinese style fried chicken. When they acquired Red Ribbon many regular items on the menu were dropped in favour of… you guessed it, chicken. And latest acquisition Mang Inasal was a perfect addition to this business model.

The systems upgrade was supposed to perfect JFC’s operations for its central chicken-centric central commissary, but apparently all that money and time has not been able to fix the system.

The problem is not new. A few years back the exact same thing happened but crisis was averted owing to the dedicated team of Information Technology and allied professionals employed by JFC who worked round the clock to ensure that the delivery orders came out, even if they had to print them out and deploy the orders manually as they fixed the system. I know because we commiserated with this IT professional and his staff’s all-nighter then. This is what the guy said to me:

We can’t stop or you’d have a riot because there would be no Chicken Joy in the morning.

Yes, that was a few years ago.

In his Facebook post today even Philippine Star columnist Boo Chanco got into the #Chickensad fray:

A migration of Jollibee’s system from Oracle to SAP shouldn’t cause such a massive disruption in business operations. Someone goofed, plain and simple.

Well, if it’s responsibility they’re looking for it’s obviously with IT, and that falls squarely on JFC’s Chief Information Officer’s (CIO) shoulders.

Okay, no names for now. But, again, having been in that line of business I have been informed about this guy a few years back. Let’s just say many of the professionals inside were not too happy with this CIO’s appointment. Something like “all talk but no real working knowledge.” That’s simplifying it, of course.

However, this CIO has been reported to put JFC in the path of its current state. First, costing the company the services of key individuals who have been responsible and with the work ethic for keeping the systems alive, and second the recruitment of inadequate consultants and service providers whose competency have been questioned more than once.

Reports a top IT consultant:

Haha… another I-told-you-so moment. Tried to save a few million, gave project to (let’s keep name out for now) but they only used local resources, I guess. That project was already delayed by 50 percent and they still didn’t get it right.

Replies our insider:

They had foreign resources, but the problem I noticed while I was still there was their expertise. I raised the alarm but it fell upon deaf ears because (the CIO) chose them and he didn’t want to appear to have made the wrong choice.

I warned the management as well. Now I am worried that if they don’t fix this soon it has the potential to take the company down.

Hmmm… now let’s see. A publicly listed firm spends half a billion pesos on a system that does not work and is losing it millions per day that it’s problematic.  Expect fireworks in the next stockholders’ meeting… if not a special board meeting called for this purpose.

And what about the regulators like the Securities and Exchange Commission (SEC)? Are red flags a fluttering?

Well, in contrast with the crisis averted years ago, the key professionals are no longer in service. What is the CIO doing today? Report the guys:

He is conspicuously missing from his leadership duties daw… he was at breakfast.

No doubt, not in a Jollibee branch? Well, adds another:

Apparently he (CIO) is not in the office again (today). He went missing for personal reasons a few weeks ago as well.

Well, so much for the problems of corporate giants and conglomerates. As far as Juan and Maria de la Cruz are concerned, they are #Chickensad and content themselves to laughing at KFC memes taking advantage of their chief rival’s misfortunes. Observes one tech pundit:

The problem for Jollibee is that so many rumors are already going around that it’s not a system issue. But that’s it’s connected to the expired chicken meat issue in China.

What’s next, Ebola virus? I pray it isn’t, but on the same breath the business grapevine is buzzing about the one top bee in the hive forced into retirement and even rumors swirling about that a pretty young thing is involved, and as of last swing that this is a 27 year old Korean. Hmmmm…

Now that’s not #Chickensad. It’s just … sad.

 

 

 

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53 Responses to #Chickensad costing Jollibee Millions a day.

  1. Larry King says:

    Na-corner ni Mang Larry para sa bonfire ang karne.

  2. Olay Rullan says:

    #SMH

    I’m just not happy with the fact that Systems was primarily tagged as the culprit.

    On any migration, it’s not just IT that works here. They go together with Business process and owners who operate them. If they’re awful in the first place and did not cooperate, it is guaranteed to fail.

    • JP Fenix says:

      Yes, which makes it bigger than the glitch they made it out to be. Stockhokders must ask the hard questions.

      • Menang says:

        Just for info on personal reason why LMs is on leave – LMs mother passed away late last week (Thursday or Friday) and his mom has been in bed critically ill a few weeks before that…

        • JP Fenix says:

          We sympathize with his personal circumstances. And that’s why the focus on the organization and its management’s need to be totally on top of the situation. Surely the curcumstances on one person should not impact the whole company, especially a large and publicly traded one.

  3. mark says:

    Larry matias?haha

  4. Bub says:

    magaling po sa “Fast”-Food industry ang SAP integrator nila

  5. Ronald says:

    Not just the Chicken Joy ~~~ services at the Jollibee stores particularly @ the BLUEWAVE in Macapagal Boulevard in Pasay City has deteriorated ~~~ imagine telling the customer –that’s me ~~ sorry sir we do not TISSUE — out of stock — WHAT?

    Now that is SAD — Jolli Double SAD

  6. Ronald says:

    Jollibee has the worst customer service of any company in any industry (yeah, worse than SM). They deserve this IT debacle. An ugly backend for an ugly front end.

  7. implem says:

    madaming SAP partners..unless this is SAP Philippines.. hehe
    saving millions tapos upon go live sasablay.. i think mali din yata yung bigla mong bibitawan ang legacy system.. lagi kung sinusuggest parallel run let’s say 2weeks then pag walang nakitang problem during cutover pwde na bitawan yung legacy.. mabuti na yung safe kesa ganyan hehe

    • legacy system talaga nila ang SAP…then they were offered by a company called ‘N’ to use it as their crm, erp, accounting system (I bet for marketing, I don’t see any reason why!?). Now, for some reason they have to go back to SAP. Company ‘N’ is never mentioned to this migration hubaloo..maybe there is some stipulation in the contract.

  8. Lynx says:

    I think mali ung naging planning dito during migration. I agree on the comments above that all should be responsible. At the end, the PM usually takes all the blame on this very expensive failure. Someone will be looking for a new job soon. hahaha

    • Marc says:

      Very true. As project that has a wide impact and as big such as this, every risk should have been taken into consideration. I don’t believe Jollibee did not do proper/standard procedures when they went live.

      A company such a Jollibee Foods Corp., would not have allowed such a lapse in the process. I suspect may mas malalim na dahilan.

      Ngayon, magiging Public Relations issue na to not only for Jollibee but for the software company. (sabagay, publicity is still publicity, good or bad)

      Hope everthing goes well for all parties….

  9. now i wanna see heads roll.. dammit!

  10. Jules says:

    Is this executive the former head bee? This rumour about a korean mistress is very interesting… I’ve been hearing it around but no real clues.

  11. taekayo says:

    dont eat fast food again it has ebola virus

  12. anonymous says:

    Do you want to know who their SAP implementation partner is? Google search using this “site:linkedin.com jollibee sap implementation”

  13. If the info above is correct na migration from Oracle to SAP yung nangyari (and according to you people mukha naman), well I just found this list of Jollibee’s systems online. Mukha naman kasing mix of solutions ginagamit nila. http://t.co/gFwiypWFm8

    What I am really interested in finding out is kung sino ang implementor nito. We’re evaluating vendors for replacement ng ERP and inaamoy ko tuloy kung yung nag-demo sa amin eh ito.

    • JP Fenix says:

      Sorry, I can’t help you there. The whole point of the article is to expose the management and org flaws of a publicly listed company, drastically affecting profitability, shareholder value and profits of franchisees. It’s not the specific systems, personnel or suppliers. But scroll through the comments, some leads have been posted.

    • Kapitan Buwan says:

      Company that starts with C. Just google ‘Jollibee SAP’ and you’ll see people from linkedin who worked on the ERP SAP implementation for Jollibee

    • KapitanBakal says:

      initials are cg

  14. WootWoot says:

    Too bad this #crisis happened to Jollibee. Also surprised to learn of the budget, Php500million. That’s nowhere near the amount spent when they implemented Oracle ERP, WMS and the online ordering system some 10-12 years back. PAZ was managing overall project, also acting as referee between the CIO then and the vendor PM during their daily shouting matches 🙂

  15. just sayin says:

    The integrator is Capgemini. What’s the big deal with mentioning the facts? JFC is a public company all these should be disclosed anyway.

    • JP Fenix says:

      That’s the point. JFC’s official disclosure st the SEC was played down. Avoided mentioning in the blog because I wanted to focus on that as a management and org flaw. I didn’t want it to come out as motivated by supplier competition and the like. Good that all your comments are contributing and enhancing this discussion.

  16. bert says:

    its not a new thing in migrating into a new system no matter how well planned.Lowering the risk is the way to go….remember the system problem of the govt agency some years back?

  17. boy_posong says:

    Diba si ‘N’ base cloud ‘yan? i tried AWS amazon cloud before. Ang mahal kaya. pay as you go. Nevertheless, ‘N’ should be mentioned if that’s the truth.

  18. Basilio says:

    As a PMP, I know for a fact that accountability lies with the project manager. Once the Project Charter is issued and signed, ownership is passed on to the PM. The PM is responsible for risk, vendor, scope, cost, schedule, contract management, etc. The PM issues the RFP, rates and recommends the vendor and ensures smooth implementation. Executive management is responsible for the vision and long term planning. Why should executive management micro-manage the work of the PM?

    • JP Fenix says:

      You’re right. But remember, it’s a half billion peso endeavor which has been going on for a long time. I’m sure there were project milestones which were reported to management… exactly what my sources said in my article. But even management did not listen.
      In any case their SEC disclosure played it down as a glitch. To me the management should have been more forthcoming. Again, it’s a publicly listed firm.

      • Basilio says:

        I am sure if you are a PM, you wouldn’t want your team members to go over your shoulder, straight to the executive. It is just a matter of whose voice has more weight at that time

        • Kapitan Buwan says:

          Exactly what I was thinking. The CIO or the execs might be getting positive reports from the consulting firm (or PMs) running this project until come prod release where they learned that it is a disaster.

          I’ve been into a bigger project than this and the same thing happened. A ‘big blue’ company responsible for the transition gave a picture to the client execs that the project is running smoothly.

          Come pre-production time (Good thing they have that – not sure with Jollibee), where they have to present a final working output to the client execs only did they find out about its apparent failure.

          • Basilio says:

            That’s right. All 3rd Party Consultants are also salesmen. A really skilled PM knows how to look beyond sales promises. Hence a solid RFP process – including vendor conferences and a strict vendor rating system based on requirements and how each vendor have such requirements in the past historically with other clients. Interview their references and clients to establish track record. This is intended to weed-out the bad apples.

  19. Basilio says:

    Team members report to the team lead. The team lead reports to the PM. The PM reports to the Sr. PM or Manager. The Manager reports to the Executive. Each level of management makes decisions based on information given to them. Obviously, the executive management put bigger weight on the information given by middle management or the PM – otherwise why the hierarchy? Might as well have a flat structure – which would be more chaotic.

  20. boy_posong says:

    nabigla si ‘N’ sa system ng jolibee. cloud-base erp advice:

    “What to Do:Migrate applications to the cloud in small steps, on a department-by-department basis. Start with non-critical operations before moving key functions like finance, legal, and HR.”

    http://www.cruxialcio.com/sap-needs-culture-change-battle-cloud-upstarts-netsuite-workday-8105

  21. Anon Y Mous says:

    “N” is DEFINITELY NOT SAP, but a competitor. Actually, co-founder of Oracle also owns majority of “N” and was its initial financial backer

  22. Pingback: What good is SLEX’s RFID if you can’t reload it like EPASS? | JPFenix Blog

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