Productions & Operations
October 23rd 2013
Darden Restaurant Case #2 Competitive advantage is gained by being the lowest cost competitor or by differentiating. However within supply chains a competitive advantage is gained by reducing costs and increasing responsiveness. Darden utilizes four different supply chains, in turn, reducing costs and increasing responsiveness to customers needs. Darden has a “smallware” distributor direct from their headquarters to ensure the highest quality is shipped to each restaurant. Darden strategically places 11 distribution centers throughout the United States to provide the quickest delivery to each of Darden’s unique restaurants. The 11 distribution centers allow Darden to have a quick response time
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Supply chain management is about reducing costs, when adding another supply chain the costs increase thus losing your competitive advantage. Darden has an extensive supply chain. Each year the various supply chains carry billions of dollars of inventory to each restaurant. If inventory is damaged during shipment it is expected that the company with the legal title to the inventory would be fully responsible for the inventory. It would be expected that ownership is transferred to the individual restaurant when the shipment of inventory arrives. This shipping method is called FOB destination and defined as to transfer the title to the goods to the buyer as soon as they’ve arrived at the buyer’s location. Due to the uniqueness of Darden’s company, the strategic supply chain differs than that of a company such as Dell or an automobile manufacturers. Dell produces various products with similar pieces. All these pieces go to warehouses but are not distributed to various different places thus not as extensive management is needed. Automobile manufacturing is extensive part management but all parts are managed in one warehouse making control easier. Darden’s supply chain is far more extensive and requires more control than any comparison company. Having an effective supply chain in the restaurant industry has been proven, by Darden, to create a competitive advantage.
AP News, October 17, 2013. Barington suggests Darden form 2 separate