“Imagineering” a supply chain
IF YOU’VE SPENT ANY TIME AT WALT DISNEY WORLD’S MAGIC
Kingdom, you may have been struck by the total absence of trucks,
vans, or other delivery conveyances traversing the grounds.
There’s a reason for that. As a filmmaker, Walt Disney knew movie
audiences had no interest in seeing on screen the klieg lights, boom
mikes, and other unglamorous equipment necessary to support the
film’s production. When his company built a theme park out of
The Utilidor feeds goods—sans conveyances—to
the park’s attractions and plays a pivotal role in
ensuring that merchandise is available when the
customer wants it. Disney’s goal is to keep three
days of inventory on hand at the Magic Kingdom’s
stores as a hedge against stock-outs.
To Disney’s supply chain executives, who were
out in force at Tompkins Associates’ Supply Chain
Leadership Forum in Orlando in late August, the
Utilidor basically exemplifies the company’s logistics model at work. While the supply chain may be
a critical contributor to the “story telling” that’s at
the heart of Disney’s value proposition, it remains firmly in the background, never interfering with the “magical” aura that Disney cultivates. Disney’s supply chain folks even coined the term “
imagineering” to describe the convergence of precise engineering and execution
with the imagination and “magic” that makes the company one of the
world’s cultural icons.
Disney’s supply chain folks believe the work they do and the brand
they support are tightly intertwined, and they leave nothing to chance
in both strategy and execution. “The brand is priceless to us,” Lynn
Barratt, director of supply chain management for Walt Disney Parks
and Resorts, said at a lunch presentation in Orlando. “You can have
one small thing happen in your supply chain, and you could be pay-
ing for it for years to come.”
With about 90 percent of Disney’s immense market capitalization
tied up in so-called intangible assets like reputation management
and intellectual property, Barratt’s comments are hardly lip service.
Indeed, the biggest challenge facing Disney’s supply chain gurus is to
convince top management that the supply chain
is not just a vehicle for cost savings but an
invaluable tool for building and nurturing the
brand. To that end, Disney has developed an
“Acceptable Presentation Index,” which measures among other things, how consistently the
company has the right product in stock at the
right store.
For the Disney supply chain folks, the biggest
opportunity—and the biggest challenge—may
lie ahead. Within the next three
to five years, Disney will open a
$4.4 billion theme park in
Shanghai, China. The projected attendance numbers for the
new park are staggering. John
Lund, senior vice president,
Disney Parks supply chain
management, estimated that
300 million people—roughly
equal to the U.S. population—
live within two hours of
Shanghai and are, in his words,
“income-qualified” to fork
over the yuan required for
admission to the park.
The scale of the Shanghai park may be
unprecedented. However, it is unlikely Disney
will alter its fundamental operating model to fit
the new location. Its goal is to leverage flawless
supply chain execution to create “tangible memories” for its customers. Whether in the United
States or China, if a seven-year-old girl has her
heart set on a pink dress like the one worn by
Belle in “Beauty and the Beast,” its goal is to make
sure that dress, in her size, and in that color will
be there when she is.
