Darden Restaurants is a successful chain of restaurants with eight brands and over two thousand restaurants. It has been employing more than 200,000 workers. It has excellent diversity and sustainability records. This case study seeks to come up with ways of improving the restaurants' practices, especially on its supply chains, in order to establish a stable reputation of excellency on the minds of its customers and the public.
Harvard Business Review (W93C48-PDF-ENG)
July 11, 2014
Case questions answered:
- What are the differences between each of the Darden Restaurants’ four supply chains?
- What are the complications of having four supply chains?
- Where would you expect ownership/title to change in each of the Darden’s four supply chains?
- How do Darden’s four supply chains compare with those of other firms, such as Dell or an automobile manufacturer? Why do the differences exist and how are they addressed?
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Case answers for Darden Restaurants: Serving Up the Future
1. What are the differences between each of the Darden Restaurants’ four supply chains?
Darden Restaurants has four different supply chains that are functioning differently from one another. One chain deals with cutleries, the other with durable foods, and the third and fourth supply chains deal with fresh produce such as milk, fresh meat, and seafood (Darden’s Global Supply Chain, n.d.).
The first supply chain deals with “small wares” coming directly from the Darden’s headquarters. These wares are delivered with premium care, and it has the advantage of reducing the delivery cost of the small items (“The Pros and Cons of Dual Sourcing | Enventys Partners,” 2019).
The second supply chain, or the “frozen, dried and canned food” chain, is economically handled by major US food distributors. This creates an advantage for Darden Restaurants distribution centers. It lessens the distribution centers’ ‘headaches’ of logistics processes as this is taken care of by their worthy and proven distributors (“The Pros and Cons of Dual Sourcing | Enventys Partners”, 2019).
The third chain is the fresh produce chain. This chain is achieved in a Business to Business (B2B) model. The model is advantageous because of the singular agreements with suppliers, which leads to better quality assurance. One supplier alone will have less chances for opportunistic behaviors under a signed contract (Costantino, Nicola & Pellegrino, Roberta, 2010).
And, the fourth supply chain is similar in advantage to the third one. However, while on the one hand, the B2B model assures quality from supplying businesses, the individualistic model of being supplied with seafood from Darden Restaurants self-developed independent suppliers leaves…