Darden Restaurants, owner of popular brands such as Olive Garden and LongHorn Steakhouse, requires unique supply chains to serve more than 300 million meals annually. Dardens strategy is operations excellence, and Senior VP Jim Lawrences task is to ensure competitive advantage via Dardens 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. Dardens supply chains are rather shallow, often having just one tier of suppliers. But it has four distinct supply chains.
Central Distribution: 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.
Independent supply chain: 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.
Darden direct: Frozen, dry, and canned food products are handled economically by Dardens 11 distribution centers in North America, which are managed by major U.S. food distributors, such as MBM, Maines, and Sygma. This is Dardens second supply line.
Seafood network: Dardens 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 Dardens overseas representatives to ensure quality (Heizer, Render & Munson, 2020, p. 467).
Review http://mediaplayer.pearsoncmg.com/_ph_bp2_cc_set.t… and then answer the prompts outlined below.
In your original post,
Why does having four different supply chains make sense for these restaurants? Focus on the concepts of centralized vs. decentralized purchasing. Address all four (4) supply chains, for example, is Dardens Central Distribution for Smallware (nonfood items) centralized or decentralized, and why?
Why would an individual restaurant manager want to purchase any of his or her own materials or food instead of letting Darden purchase for them and ship to the restaurant? What is the possible effect to Darden’s overall brand?
Identify one item presented in the course material that an individual manager at Darden might normally purchase?
