Have you noticed the uptick recently in coverage of a basic fast food staple – the chicken sandwich? Social media has been aflame with which sandwich is better, the standard bearer Chick-fil-A chicken sandwich or the newcomer offering from Popeyes? All this started over both companies social media teams launching tweets calling each other out. First tweet salvo was from Chick-fil-A:
This prompted a tweet response from Popeyes: “…Y’all good”, which then set off the hashtag #chickenwars. This created a deluge of tweets and memes of which chicken sandwich was the best. The likes of David Portnoy of Barstool sports even weighted in with a blind taste test (he also threw in Wendy’s chicken sandwiches).
And recently it came out that Popeyes has run out of chicken! Gasp. The horror. Or is it? When demand spikes and you start having massive lines to get your product and you run out of that product that tends to be frowned upon. You are creating unhappy customers and leaving revenue on the table, and possibly handing some of that revenue to a competitor. This is a supply chain no no! You work tirelessly to match demand with the appropriate supply. From a supply chain 101 perspective that is true, you never want to leave revenue on the table because your supply chain could not keep pace. History is littered with examples of companies who suffered this fate – Motorola with the Razr phone or Toyota with the Prius are some examples.
However this is not necessarily a negative. There can be a positive with creating a sense of exclusivity, a greater sense of demand due to lack of supply. Rumor has it that Apple does this regularly with their iPhones, iPads and Apple Watches. Rather than cranking up their supply chains to ensure they have the necessary supply, keep it limited, created a sense of urgency to get the product. Just look at the lines at Apple stores when they roll out a new product. Then keep a steady stream of inventory flowing to ensure you capture the secondary demand. Sony did this with their Playstations early on. Of course this can also go horribly wrong with the unintended consequence when you misinterpret that early spike in demand as a long term signal…just ask Motorola who had to ramp up Razr productions only to see demand dry up.
So Popeyes sold out of the sandwich…sad indeed. But by some estimates they enjoyed over $23m in free advertising because of the “#chickenwars.” That’s nothing to sneeze at! If they manage their supply chain properly they will continue to enjoy incremental sales of their now famous sandwich. Like many of these demand spikes, this too will mostly likely die down over the Labor Day weekend. But Popeyes should enjoy increased demand, for those who had the sandwich and became converts to those, like myself, who missed out but now has some curiosity into what all the excitement was about.
The lesson to be learned is your supply chain can never be fully prepared for such a demand spike. None of our planning and demand sensing engines can truly predict what tweet will set off a 1000 ships in an instant. What we need to ask of our supply chains is now to best navigate those waters after the initial demand wave hits, can you ensure the right balance to take advantage of any residual or newly found demand, without over producing based on a fleeting demand signal.
Now I need to figure out where the closest Popeyes is….