Yes, we have no chicken

A screw-up of international proportions hit the business news a few days ago: It was reported that most of the 900 or so KFC outlets in England and Ireland stopped operations because they ran out of chicken.

The chicken shortage was a result of “teething problems” with KFC’s new shipper in that market, DHL. DHL didn’t deliver the chicken, thus choking KFC’s business.

Well, one shock of recognition runs the whole world ‘round, eh? The story may carry a London dateline but it features two storied names in Saipan’s scene.

The “H” in DHL stands for Larry Hillblom (1943-1995), a founder of the company, who was a well-known resident of Saipan. KFC, for its part, is a well-known Chalan Kanoa resident and has served my pals and I many a dinner.

Anyway, one facet of the chicken-shortage story is that it’s such a contrast with KFC’s usual way of doing things. KFC’s international expansion was regarded as a marvel of competence and was studied and discussed in business management circles. And, not so incidentally, KFC now stands as the largest restaurant chain in China.

If nothing else, the story can serve as a useful reminder of something so obvious that we can overlook it: Logistics is pretty much everything. It’s the invisible backbone of commerce.

And it really is invisible. A lot of freight moves at night, warehouses are often unseen by the casual eye, and the experts that keep the logistics chain operating aren’t usually showcased as business celebrities.

But the expertise is certainly essential and it can be well-rewarded. I knew an officer in the U.S. Marines whose only complaint about re-entering civilian life was that a constant stream of job offers was cutting into his beach time. The corporate head hunters just wouldn’t give him any peace. His military specialty? Logistics.

Stepping back to the global scene, if you ask anyone about China’s rise to economic prominence they’ll tell you it’s because China built a lot of factories. That’s not the entire picture, though; it’s just the more obvious end of it. From what I’ve seen in the factory-to-market chain in south China (the nation’s manufacturing center), the roads, the airports, the administration, and the expertise are world-class. True, I just saw a few narrow slices of this, but, still, what I saw was impressive. That’s why I remain convinced that Mandarin Chinese is the language of the future; it is becoming the global language for getting things done.

If you want to geek-out about economics (OK, nobody really wants to do that, but we can pretend, right?) you’ll note that transportation is a leading indicator of broader economic activity. When things are moving, economies are getting ready to get moving, too.

With this in mind, we can seek more conceptual leverage. If transportation is a leading indicator of economic activity, then what’s a leading indicator for transportation?

I don’t have a textbook answer to that, but my beach chair notion is that infrastructure and related elements of logistics (warehousing, fuel depots, repair facilities, etc.) are obvious candidates. But, from my experience, just as important as the visible assets are the intangible elements such as competence and efficiency in the logistical realm, including ports administration. After all, ports are bottlenecks that can hold an entire chain of industrial events and capital hostage. Show me a place where it’s hard to move goods, and I’ll show you a place that probably has a broad array of economic inefficiencies.

If it seems like I’m spinning too big of a logistical discussion out of a mere hiccup in a restaurant headline, you should consider the case of yet another restaurant chain, Waffle House, which, like KFC, has its origins in the U.S. South.

The nation’s 2,100 or so Waffle House locations are open 24/7. Waffle House has such solid logistics that its restaurants are considered benchmarks for disaster conditions. According to a Sept. 1, 2011, article in the Wall Street Journal, the Federal Emergency Management Agency uses, among other measures, a “Waffle House Index” to gauge the severity of natural disasters.

In fact, the last time I ate at a Waffle House it was during a freak ice-storm that shut down a swath of the deep South. A Waffle House was, indeed, the only restaurant open in the area. With the exception of the Waffle House and a couple of gas stations, the retail sector was closed, cold, and dark.

Ah, logistics. It’s what’s for dinner. Unless you mess up, that is. Then all you can serve is excuses. When this happens to the best of businesses, it’s a gentle reminder for the rest of us to heed our priorities.