Mo Darden Solution

Topics: Supply chain, Logistics, Supply chain management Pages: 2 (279 words) Published: May 6, 2013
Theory Summary

Supply-chain Management: Management of activities that procure materials and services, transform them into intermediate goods and final goods, and deliver them through a distribution system

Supply-chain Strategies:
1) Many Supplier:
2) Few supplier:
3) Vertical integration: Developing the ability to produce goods and services previously purchased or actually buying a supplier or distribution 4) Joint venture:
5) Keiretsu networks: Japanese
6) Virtual Companies

Logistic Management: An approach that seeks efficiency of operation through the integration of all material acquisitions, movement, and storage activities

Distribution System:
1) Trucking
2) Railroads
3) Airfreight
4) Waterways
5) Pipelines

2) What are the complications of having four supply chains?

For goods and services obtained from resources outside the company, they need to determine the supply-chain strategy. In the case of Darden's Restaurant, they use four supply chain, so they get into Few Suppliers.

Doing strategy with many suppliers suggest that rather than looking in the short term in order to lower costs, it’s better to establish long-term relationships with suppliers that are dedicated. Suppliers will better understand the long-term goals of the company and final customer. Big suppliers, with any commitment to the buyer, also willing to participate in the JIT system which provides the best possible design and technological innovation expertise. Contractual relationship results an extend through the product life cycle. The expectations of buyers and suppliers become more efficient and the price is reduced from time to time. Just like the other strategies, it have some weaknesses. With many suppliers, the cost to replace the pair is great, because the buyers and suppliers are equally at risk to defend one another mutually.
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