Darden Restaurants (subject of the Global Company Profile at the beginning of this chapter), owner of popular brands such as Olive Garden and LongHorn Steakhouse, requires unique supply chains to serve more than 300 million meals annually. Darden’s strategy is operations excellence, and Senior VP Jim Lawrence’s task is to ensure competitive advantage via Darden’s supply chains. For a firm with purchases exceeding $1.8 billion, managing the supply chains is a complex and challenging task. Darden, like other casual dining restaurants, has unique supply chains that reflect its menu options. Darden’s supply chains are rather shallow, often having just one tier of suppliers. But it has four distinct supply chains. First, “smallware” is a restaurant industry term for items such as linens, dishes, tableware and kitchenware, and silverware. These are purchased, with Darden taking title as they are received at the Darden Direct Distribution (DDD) warehouse in Orlando, Florida. From this single warehouse, smallware items are shipped via common carrier (trucking companies) to Olive Garden, Bahama Breeze, and Seasons 52 restaurants. Second, frozen, dry, and canned food products are handled economically by Darden’s 11 distribution centers in North America, which are managed by major U.S. food distributors, such as MBM, Maines, and Sygma. This is Darden’s second supply line. Third, the fresh food supply chain (not frozen and not canned), where product life is measured in days, includes dairy products, produce, and meat. This supply chain is B2B, where restaurant managers directly place orders with a preselected group of independent suppliers. Fourth, Darden’s worldwide seafood supply chain is the final link. Here Darden has developed independent suppliers of salmon, shrimp, tilapia, scallops, and other fresh fish that are source inspected by Darden’s overseas representatives to ensure quality. These fresh products are flown to the U.S. and shipped to 16 distributors, with 22 locations, for quick delivery to the restaurants. With suppliers in 35 countries, Darden must be on the cutting edge when it comes to collaboration, partnering, communication, and food safety. It does this with heavy travel schedules for purchasing and quality control personnel, native-speaking employees onsite, and aggressive communication. Communication is a critical element; Darden tries to develop as much forecasting transparency as possible. “Point of sale (POS) terminals,” says Lawrence, “feed actual sales every night to suppliers.” QUESTION: On the basis of the above case study, discuss the advantages of each of Darden’s 8 supply chains
Read the following case study and answer the underlined question.
Darden Restaurants (subject of the Global Company Profile at the beginning of this chapter), owner of
popular brands such as Olive Garden and LongHorn Steakhouse, requires unique supply chains to serve
more than 300 million meals annually. Darden’s strategy is operations excellence, and Senior VP Jim
Lawrence’s task is to ensure competitive advantage via Darden’s supply chains. For a firm with purchases
exceeding $1.8 billion, managing the supply chains is a complex and challenging task. Darden, like other
casual dining restaurants, has unique supply chains that reflect its menu options. Darden’s supply chains
are rather shallow, often having just one tier of suppliers. But it has four distinct supply chains. First,
“smallware” is a restaurant industry term for items such as linens, dishes, tableware and kitchenware, and
silverware. These are purchased, with Darden taking title as they are received at the Darden Direct
Distribution (DDD) warehouse in Orlando, Florida. From this single warehouse, smallware items are
shipped via common carrier (trucking companies) to Olive Garden, Bahama Breeze, and Seasons 52
restaurants. Second, frozen, dry, and canned food products are handled economically by Darden’s 11
distribution centers in North America, which are managed by major U.S. food distributors, such as MBM,
Maines, and Sygma. This is Darden’s second supply line. Third, the fresh food supply chain (not frozen
and not canned), where product life is measured in days, includes dairy products, produce, and meat. This
supply chain is B2B, where restaurant managers directly place orders with a preselected group of
independent suppliers. Fourth, Darden’s worldwide seafood supply chain is the final link. Here Darden
has developed independent suppliers of salmon, shrimp, tilapia, scallops, and other fresh fish that are
source inspected by Darden’s overseas representatives to ensure quality. These fresh products are flown to
the U.S. and shipped to 16 distributors, with 22 locations, for quick delivery to the restaurants. With
suppliers in 35 countries, Darden must be on the cutting edge when it comes to collaboration, partnering,
communication, and food safety. It does this with heavy travel schedules for purchasing and quality
control personnel, native-speaking employees onsite, and aggressive communication. Communication is a
critical element; Darden tries to develop as much forecasting transparency as possible. “Point of sale
(POS) terminals,” says Lawrence, “feed actual sales every night to suppliers.”
QUESTION: On the basis of the above case study, discuss the advantages of each of Darden’s 8 supply chains
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