Jollibee #Chickensad: Expired Chinese meat, port congestion or IT problem?

James Ryan Jonas

What’s the real reason behind the temporary closure of several Jollibee Foods Corp. (JFC) stores and the unavailability of chicken and other products in their menu?

If we are to believe the company’s official statement, an IT systems upgrade that went awry is to be blamed. Addressing the “Chickensad” phenomenon making the rounds on Facebook and Twitter, Jollibee explains in its press release on August 8:

The product limitation has been caused by the migration to new systems that started on August 1, 2014, which has resulted in temporary slowdown in sales order taking, product loading and dispatch of transportation.

The company did not give more details about the “systems migration problem” but instead highlighted that the new enterprise platform is “the largest investment in information technology in JFC’s history amounting to at least half a billion pesos.”

Not tested, no backup and no alternative?

chickensad-kfcAnd yet we wonder: a company spends half a billion pesos for a new system that appears to be untested before launch, with no existing fail-safe backup, and no alternative in case it would not go as planned? Mind-boggling.

Last we heard, the problem caused the closure of 72 branches of Jollibee, Chowking, Mang Inasal and other JFC brands — representing 3.2% of its total store network nationwide.

From a corporate perspective, this is totally unacceptable. With Jollibee losing millions of pesos each day the stores are closed, heads should definitely roll.

Or is it caused by a problem bigger than an IT upgrade failure?

Expired Chinese meat scandal?

Several analysts find it hard to believe that a failed systems migration is to be solely blamed. Here are some probing questions raised that tend to refute the IT problem:

  • If the problem really was an IT problem, why can’t Jollibee simply revert to a manual process, for the meantime, just to ensure stores won’t close and won’t create dissatisfied customers?
  • If there really is no shortage of chicken and the stocks are just sitting in commissaries, why would Jollibee choose to close stores and leave inventory in warehouses — risking possible expiration of such perishable items?

china-meat-scandalThe so-called #Chickensad problem is further exacerbated by recent reports that KFC, McDonalds, Burger King and other fastfood chains in China have also ran out of stock in their chicken and hamburger products after it was discovered that the chains’ meat supplier has been serving them expired meat.

Shanghai’s Food and Drug Administration raided last week the warehouses and facilities of Shanghai Husi Food and seized more than 5,000 boxes of expired meat. A Chinese local media earlier broke the news that the supplier has been selling chicken and beef past their expiry dates to at least 9 international fast food chains in China.

Jollibee’s PR group, meanwhile, was swift to deny the store closure was due to a supply problem or the Chinese expired meat scandal. As per JFC’s press release:

We would like to clarify that this is not a supply issue or a chicken shortage situation.

They also dismissed claims that they were importing meat from the same disgraced Chinese supplier. Earlier today, a Department of Agriculture (DA) representative also came to the rescue of Jollibee, saying the company’s chicken supply comes from local, not foreign, sources.

“Before, Jollibee used to import their chicken but they have shifted to local products three to four years ago,” says DA Undersecretary Jose Reano, during a radio interview.

Port congestion and Manila truck ban?

In the same interview, Mr. Rosendo So, president of the Samahang Industriya ng Agrikultura (Sinag), confirmed that Jollibee’s chicken supply comes from San Miguel Corporation (SMC).

Mr. So instead pinned the blame on the port congestion problem and the Manila truck ban, saying “Ang problema, ‘yung congested ang pier. ‘Yun ang isang nangyari din, kung bakit nabitin ‘yung (supply) dito sa Metro Manila.”

Several companies have recently complained that cargo vessels are unable to dock and unload at the Manila International Container Port (MICP) and the Port of Manila, leading to spoilage and higher product prices.

So which is it? Vote in our poll!

What do you think is the real reason behind the missing Jollibee food items and the closure of stores? Do you agree or disagree with Jollibee’s justification in their press release?

Vote in the poll below so you won’t be Chickensad anymore!

[poll id=”20″]

Image Credits: Jollibee, KFC, CCTV America

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.