Tuesday, June 30, 2009

Darden Restaurants looks to cut costs -- and wait times

Wal-Mart Stores is an acknowledged master in the retail industry when it comes to dealing with vendors and controlling costs. And now the nation’s largest full-service restaurant chain is hoping to learn from its example.

The July/August issue of Fast Company magazine reports that Darden Restaurants -- operator of Red Lobster, Olive Garden and LongHorn Steakhouse -- has launched an ambitious plan to transform its supply chain, with the hopes of saving some $20 million annually. In the article, “Why America is Addicted to Olive Garden,” senior VP Barry Moullet says Darden is studying Wal-Mart to "understand the components of cost" with its vendors and become a better and more informed negotiator.

The article provides a fascinating glimpse into some of the inner workings at Darden, including the critical role leading-edge technology plays in its success (in that, it is similar to Wal-Mart). The restaurant chain’s IT department is headed by Patti Reilly White, chief information officer, who leads a 170-person team. Among White’s projects: a pilot program to reduce wait times by having waiters use handheld devices to submit orders and payments at the table, thereby eliminating lag time.

She also has launched another project to share wait times across restaurants so that a hostess or host can guide customers to nearby Darden units that are not as busy. In the future, White envisions giving customers online access to the information.

Additionally, Darden is working on an automated ordering system that will eventually replenish its restaurants based on electronic-tagged inventory and guest-traffic forecasts.

There’s a lot more in the article, including a profile of the top man at Darden: CEO Clarence Otis. The son of a janitor from Los Angeles’ troubled Watts neighborhood, Otis is one of a handful of African-American CEOs in the Fortune 500.

-- Marianne Wilson

1 comment:

Anonymous said...

I take my last breath of sanity before I drown in all this madness. It is as clear as their store front glass….”Buy Ala Carte”. Successful retailers know the power of buying Ala Carte”. Stop spending money on aspects your business that don’t give you a return on your investment. You need that elaborate lighting system or incredible flooring? Then pay for the material and the installation but, why pay for your Construction Managers fleet of company vehicles or skyrocketing health care costs!? Your business will see a return from the purchase of customer-friendly material but the money you spend on your General Contractors overhead gone into an abyss of nothingness.

When you’re looking at your GC’s gleaming corporate office remember next time…pay for the intangible (ability & integrity) not the tangible waste.

Christopher Priddy

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