IT system upgrade causes disruptions in Jollibee operations

MANILA, Philippines - Constraints in the supply chain and sales order due to a new information technology (IT) system have prompted fastfood giant Jollibee Foods Corp. (JFC) to close several stores across its different brands.

JFC aims to restore the availability of all its products to normal levels and re-open stores in the coming days, the company said in a disclosure.

“The limited availability of products has caused the temporary closure of 72 stores of various JFC brands, representing 3.2 percent of its store network nationwide of 2,244 and the reduction in the menu of many stores,” the country’s largest fastfood chain said.

The JFC Group estimated that it has not been able to serve consumers to the extent of six percent of normal nationwide sales in the first seven days of August.

In the past days, JFC’s sales suffered from the limited availability of products in some outlets in Metro Manila and nearby

cities, an issue extensively discussed in social media.

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

The launch of the enterprise platform is the largest IT investment of the fastfood giant, with P500 million in expenses for 2014 alone. It involves the central integrating system, store information systems and several other systems, JFC said.

“The purpose of this major investment is to prepare JFC for an accelerated business growth in the Philippines and abroad as it pursues its goal to become the largest Asian restaurant company and one of the most successful restaurant companies in the world,” the company added.

JFC operates the largest fastfood service network in the Philippines with 2,244 branches composed of 839 Jollibee branches, 406 Chowking, 207 Greenwich, 298 Red Ribbon, 456 Mang Inasal and 38 Burger King.

The foreign operations of JFC is composed of 589 stores: Yonghe King with 311 stores, Hong Zhuang Yuan with 43 and San Pin Wang with 44, all in China; 111 Jollibee, 31 Red Ribbon, 46 Chowking and three Jinja Bar located in the US, Southeast Asia and the Middle East. It also has a 50-percent stake in Highlands Coffee branches in the Philippines and Vietnam; Pho 24 outlets in Vietnam, Indonesia, the Philippines and Japan; and Sabu stores in China.

Despite the disruption, JFC said it has sufficient raw materials, finished products and production capacity to meet the consumer demand for the months ahead.

The products are stored in various commissaries, warehouses and logistics center, JFC said, adding that it will enhance its transportation delivery capability in the months ahead.