Production and Operations Management

College of Accountancy, Business Economics and

International Hospitality Management

Batangas State University, Batangas City

Graduate School

A Compilation of Requirements for the

Course Productions and Operations Management

By:

Marvin P. Casas

May 2017

Case Study – Outsourcing at Darden

1. Objectives

• To determine other outsourcing opportunities at Darden restaurant.
• To identify the success factors that contribute to Darden’s supply chain.
• To determine the possible risks that Darden may be facing because of outsourcing.

1. Outline

Darden restaurant serves more than 300 million meals annually in over 1,700 restaurants across the U.S and Canada. It achieve competitive advantage via its supply chain by ensuring excellence in every process even in the most complex and challenging task of purchasing seafood products with approximately 4 days shelf life from over 35 countries.

Those 300 million meals annually mean that there are approximately 40 million pounds of different seafood products which are transported across the United States and monitored in order to ensure that the required temperature of 34F is maintained to preserve the freshness.

The purchasing agents of Darden travel the world to find competitive advantage in the supply chain.

1. Areas of Consideration

Darden has been very successful in providing quality meals in US and in Canada. Operating over 1,700 restaurants in 2 large countries is no easy task especially that they are involved in the preparation of highly perishable food supplies coming from over 35 countries around the world. This was made possible because of the effective operations management being applied to every step of the process. They see to it that all their external providers meet the standards that they established. They were able to maximize the productivity by focusing on their core competencies and relying on their external providers’ capability.

1. Conclusion

There are still several outsourcing opportunities that are available at Darden’s restaurant, these includes but are not limited to providing marketing services, janitorial or housekeeping, accounting or book keeping, ordering of food supplies and other restaurant supplies.  Although Darden outsources the seafood and produce as part of its supply chain, it ensures that it maintains high quality standards from the time the seafood was farmed up to the serving of their food to their customers.

Considering the fact that a large company like Darden procures supplies from 35 countries, it needs to have a large number of employees as well in order to arrange the training, to assure product and service quality, check the validity and expiration of contracts, expedite the agreements, overcome the language, cultural and ethical barriers.