Hungry? Serving up the Supply Chain

 

Last week, my family and I went to Red Lobster for dinner. I was struck at how efficient they were with everyone playing a different role in the restaurant. I noticed that after every order the servers would go to a computer section to input in the orders at the different tables. I have never given it much thought, but I realized then that that was how the restaurant uses to keep track of its inventories (food or drinks). My sister ordered a lobster, which she asked the server if she could pick it. This got me thinking that the restaurant needed to have an excellent inventory management system and supply chain in order to keep up with orders such as my little sister (you cannot have lobster fresh all year round–and live ones too). So what keep Red Lobster going?

Red lobster is one of the chains of the largest casual-dining company, Darden Restaurants Inc. (“Darden”), in the United States. In the article, the management team at Darden is working to continue its competitive advantage by implementing an automation system on the supply chain. I don’t know how extensive this system is, but Darden believes that the benefits will justify the cost for it. And I think they have a reason to be since they have been an innovator in its industry by having a competitive in its supply chain. The article also mentions that Darden has plans to open a lobster farm in Malaysia among its fish farms throughout the world. This would mean that the company would have more control on the quantity as well as the quality of the lobsters coming in to its restaurants. Furthermore, with the inventory management system at its restaurants, the company would be able to measure how much inventory (food like fishes or lobsters) to each location just as demanded.

Questions to consider: Have you ever been to one of Darden’s chain restaurants? How do you feel? Does the supply chain system that Darden has in place surprise you? How do you feel about Darden being the “McDonald’s” in casual dining? Does Darden have a comparative advantage over its competitors? How so?

 

http://nrn.com/article/darden-making-progress-supply-chain-overhaul

7 thoughts on “Hungry? Serving up the Supply Chain

  1. I have eaten a many of the Darden’s chain restaurants including Red Lobster, Olive Garden, and Bahama Breeze. These restaurants being found all over the United States puts a huge struggle on them when it comes to managing inventory. Many of these restaurants are found in populated areas and even along major interstates which makes it harder to manage inventory on any given week depending on the travel trends. Walking into these restaurants you know what to expect in regards to the theme of each one and the quality of service. The supply chain system they have in place does not surprise me because this an efficient way for them to manage the large amounts of food inventory that is sold on a daily basis. It allows them to estimate ordering time lines and how much of each product they are going to need to order. I think Darden is the modern day “McDonald’s” in casual dining. They know there system and how to get food out quick and how to have enough inventory to supply to their demand from customers. Its a balancing act to do this and McDonald’s does it well and so does the restaurants under the Darden restaurant group. I think they do have a competitive advantage as well because of the fact customers know what to expect every time they walk into any of the Darden restaurants just like they do when they walk into a McDonald’s any where in the United States.

  2. What is intriguing about this article is the fact that Red Lobster, The Olive Garden and others are all owned one main supplier, Dardin ink. While this dosent surprise me I think this company is highly innovative, keeping up with an ever changing market by getting fresher seafood directly from the source. Although I havent been to a Red Lobster in years I can say they always had good deals for a relatively decent meal. While I wouldn’t eat there, I actually believe many would rather choose a more healthy options since american’s views on fast food such as McDonalds has changed so much within the last 8 years. Seeing this change I can see that the Darden chain has become more versatile by getting there seafood from Malasia, thus giving them the power to get fresh products at a low rate. So in the end yes I would say the do have a competitive advantage over many companies i similar areas.

  3. Questions to consider:

    Have you ever been to one of Darden’s chain restaurants?
    I have been to Red Lobster, Olive Garden and Longhorn Steakhouse.

    How do you feel? Does the supply chain system that Darden has in place surprise you?
    I am not surprised by the supply chain system that Darden has in place. They offer many speciality foods and offer them at a competitive price.

    How do you feel about Darden being the “McDonald’s” in casual dining?
    As I just mentioned, Darden’s restaurants offer a nice casual dining experience but they are very affordable. I love that I can eat for a relatively inexpensive price but still have the experience of a nice restaurant.

    Does Darden have a comparative advantage over its competitors? How so?
    I do believe that Darden has a comparative advantage, it has created reputable brand restaurants, high quality food, and a great dining experience; all at an affordable price.

  4. I have been to a couple of the Darden chains and comparing them to the McDonald’s of casual dining doesn’t really surprise me. For example, Olive Garden has an inexpensive price point and it is aso very easy restaurant experience, so it makes sense to compare them to McDonalds. However when comparing it to one of their high end restaurants like The Capital Grille, it’s not really something you want to hear when you are paying a pretty hefty check. Their efficiency does give them some comparative advantage, but compared to inside the city limits where the Capital Grille is the only Darden group restaurant, it falls short to Lettuce Entertain You and higher groups like the Boka Group and On Off Hospitality.

  5. It surprised me a little that Darden is considered the McDonalds in casual dining. I have been to most of those restaurants in the Darden chain and although they are not the nicest and fanciest places, I would definitely not consider it to be that low. They have good service and quality food. Darden does a good job catering to their customer’s wants and needs and has done a good job creating many deals throughout this tough economy, which is very important for restaurants these days.
    The supply chain system that Darden has in place does not surprise me. With this system, they are doing a good job being efficient and serving their customers well. It gives them a comparative advantage over their competitors in the sense that they always have complete control over their inventory. Furthermore, opening a lobster farm and raising their own lobster would create an even bigger advantage for them. Having control over the quantity and quality of their lobster inventory would save the time and money, since they would no longer have to go through a third party in order to get their lobsters. That is probably the best idea when it comes to efficiency and gaining an even bigger competitive advantage over their competitors. Darden has could even improve their image with this and no longer be considered the McDonalds of casual dining.

  6. I had only been to two of the restaurants which were Olive Garden and Red Lobster. The experiences at both restaurants were good. The service was quick and efficient which makes customers come back. The supply chain system was not surprising for Darden to consider implementing. It is necessary to have complete control over the quality and quantity in their supplies in order to improve their restaurants. I understand why Darden’s chain restaurants are being compared to McDonald’s because of their affordable price, but the experience counts as well. Darden would have a better comparative advantage because they have control of their inventory instead of depending on suppliers.

  7. This post was very intriguing as I never thought about supply chain management at places like Red Lobster. The inventory system you mentioned interested me because I, personally, worked at a small restaurant a few summers ago and was put in charge of inventory. The inventory technology was new for the restaurant so everything had to be done manually at first. Once I got all of the information entered correctly, staff began using the system. A couple of times a week, when new inventory would come in, I would have to manually update the system. I’m sure Red Lobster’s system is a lot more efficient but its cool to see that I was involved in something similar!

    I think systems like Red Lobster’s help them to stay at the top of the restaurant “food chain” because they are able to create a quality product at lower than average prices. Their system proves to be very efficient and effective in providing their customers with what they want.

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