#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

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.