Darden and Offshoring the Supply Chain Essay

Outsourcing some part of business operations can have benefits in the supply chain, as shown for example in the Darden supply chain, where the cutting of salmon to the proper sizes for its restaurants and the peeling of shrimp are both outsourced to offshore companies because those companies provide what Darden requires at higher quality, to specifications and at lower cost than can be had at domestic suppliers or domestic restaurants (Heizer, Render & Munson, 2016). Thus following a strategy of outsourcing can reap benefits for a business that understands the options that globalization opens up for the company. With transportation and technology so advanced today, oversight and on-time delivery are much more readily achievable than in days past.

Supply chain issues that are unique for a company sourcing from 35 or more countries include transportation issues, freshness at time of delivery, cost, quality of product, and specifications being met. Language issues may arise and so it is imperative that there be native speakers working for the company in each of the countries. Logistics are also going to be a challenge, as coordination among all the various suppliers has to be tightly controlled. Darden faces these issues and hires locally so as to overcome language barriers and centralizes its supply chain management so that it is tightly controlled. Other industries, such as the automotive industry, approach the supply chain differently. Audi for instance uses just-in-time delivery but can do so because its major supplier is literally right next door to its production facility in Germany. This would not work for a company like Darden because it has a menu that requires products from all over the world. Audi requires products that can be supplied by a supplier locally that manages the logistics so Audi does not have to.

References

Heizer, J., Render, B. & Munson, C. (2016). Operations Management, 12th Edition. Pearson. ISBN: 9780134163567