KFC Philippines Adds Quicker Data Insights to Its Success Recipe on AWS
Popularity of Fast-Food Outlets
Increasingly busy lifestyles and an affinity for international food chains—particularly those from the US—are driving growth in the Philippines’ fast-food sector. Self-service dining establishments and fast-food outlets are a mainstay of commercial zones in cities and rural areas, and Filipino consumers are spoiled for choice.
US-born and -bred, Kentucky Fried Chicken (KFC) first brought its secret-recipe chicken to the Philippines in 1966. There are currently 329 KFC outlets across the country, now operated by the Ramcar Group of Companies. Ramcar also manages other leading food-service brands in the country such as Tokyo Tokyo and Mr. Donut and is perhaps best known for its global battery-manufacturing business.
AWS data analytics services help us understand our customer patterns and strategically plan where to open new stores.”
Chief Information Officer, Ramcar Group of Companies
Building a Business-Intelligence Platform
Ramcar’s divisions feature a high level of vertical integration. For KFC, the group manages its own poultry processing, warehouses, and trucking network that delivers fresh ingredients to stores each day. To remain competitive in a value-driven market, Ramcar aspired to further integrate its operations and introduce modern data-collection technology in its stores, starting with KFC.
“Following the direction set by KFC Philippines President, Jerome Tuguin, we wanted to build a business-intelligence platform that would enable us to make better informed decisions about what and how we produce, and that all starts with data,” shares Louie Quiogue, Chief Information Officer at Ramcar Group of Companies.
Moving Data-Collection Processing to the Cloud
Ramcar engaged AWS Select Consulting Partner Info Alchemy to help with building the platform. “InfoAlchemy has established itself as the industry expert for data warehouses. The InfoAlchemy team is very involved and knowledgeable about our requirements and has made suggestions that are in sync with our business goals,” Quiogue says. Ramcar was already using AWS for some of its workloads, including its KFC delivery website, but data collection was carried out via an on-premises data center.
Each night, data would be sent from point-of-sale (POS) devices at all KFC outlets to Ramcar’s main office. Inventory would be replenished according to the data received from these devices, but connectivity issues led to results not arriving from some stores until one to two days later. By working closely with Info Alchemy, Ramcar built a data lake using Amazon Simple Storage Service (Amazon S3) and a data warehouse using Amazon Redshift.
Minimum Inventory for Maximum Freshness
Though the analytics project is ongoing, the first phase of implementation was completed in late 2020. Auto-replenishment of inventory was the first use case to be tested, with four additional use cases to follow. In this case, Ramcar aims to minimize food stock at its stores, centralizing inventory at its warehouse to better control food quantity and freshness.
With its AWS Cloud–based data warehouse, inventory will be tracked throughout the day as orders are completed on POS devices. A list for raw-material replenishment will then be sent automatically to KFC warehouses for next-day delivery. Store managers will no longer have to manually check inventory each day and enter their orders in the system, which will allow more time to focus on store operations to improve the customer experience.
Forecasting Menu Demand with Machine Learning
The second, and complementary, use case for the KFC data warehouse, is the ability to predict demand for menu items using Amazon Forecast. Ramcar wanted to take advantage of machine learning (ML) technology to support its analytics goals but did not have a dedicated data team to develop ML algorithms. Because Amazon Forecast is a fully managed service, Ramcar requires no ML experience, just historical and relevant external data to feed its ML model.
The menu forecasts will enable the creation of a cooking schedule, with regular monitoring of inventory levels to avoid out-of-stock situations or delays for customers waiting in line while their order is cooked. Forecasting could also lead to lowering the cost of inventory on hand and right-sizing of stores as storage space for food and packaging materials would be better planned and managed. Quiogue also envisions the creation of ad hoc promotions at the store level when excess inventory is detected to sell through targeted items and prevent food waste.
“With a data warehouse on the AWS Cloud, we can come up with improved ways to reach and satisfy our customers,” Quiogue says. “Now the fun part really begins. Once we see what data we have at the tip of our fingers in real time, we can better understand the new things that we are capable of doing. The use cases we’ve identified are just touching the surface.” Ramcar is now retrieving data in 2-hour increments, approaching near-real-time visibility.
Dashboards Improve Visibility across Operations
Info Alchemy has also been assisting Ramcar to create dashboards that each department can customize independently. Its finance department can generate daily performance reports that were not available before due to a lack of data. And the marketing department has detailed visibility into the results of promotions, which helps the team strategically plan future offers and new products.
In addition, its operations team has given feedback on multiple occasions about how useful these dashboards are in the day-to-day execution of their jobs. Delivery routes, truck capacity, and many more elements can now be planned more efficiently. The team’s approach to inventory management has switched from being reactive to proactive. “We’re also able to see breakdowns on sales from different channels such as our website to monitor how each channel is performing and allocate resources appropriately to improve sales,” Quiogue adds.
Saving Resources for Strategic Expansion
By eliminating the need for dedicated servers storing POS data, Ramcar estimates its monthly expenditure has decreased by 25 percent. The cost and manpower savings from reduced maintenance will be allocated to opening new stores or supporting franchisees under a new business model developed this year. “AWS data analytics services help us understand our customer patterns and strategically plan new store locations,” Quiogue says.
Looking ahead, Ramcar plans to roll out its KFC data solution to other divisions, starting with Tokyo Tokyo. Furthermore, the group’s battery division in the US is currently upgrading its SAP system on AWS, and Quiogue envisions this visualization solution can also help teams there.
“Being on the AWS Cloud makes it a lot easier to integrate our workloads across divisions and geographies,” he says. “Our teams have complimented IT on the new platform, and we’re all looking forward to the next phase.”
To learn more, visit Analytics on AWS.
About Ramcar Group of Companies
Ramcar manages food-service outlets in the Philippines and is a leading global battery manufacturer. It is the franchisee of KFC in the country, with 329 shops. Ramcar’s businesses feature a high level of vertical integration.
Benefits of AWS
- Receives data in 2-hour increments, approaching near-real time
- Offers visibility into data by store, with customized dashboards
- Allows operations to plan more accurate truck capacity and routes
- Automates inventory replenishment each day
- Forecasts menu demand to avoid food wastage
- Saves time with a suggested cook plan devised using ML
- Identifies areas for store openings based on customer behavior
- Monitors revenue by sales channel
AWS Services Used
Amazon Forecast is a fully managed service that uses machine learning to deliver highly accurate forecasts.
With Redshift, you can query and combine exabytes of structured and semi-structured data across your data warehouse, operational database, and data lake using standard SQL.
Amazon Simple Storage Service (Amazon S3) is an object storage service that offers industry-leading scalability, data availability, security, and performance.