Description of the Chosen Business and Its Product
The selected business unit of the Walt Disney Company is Disney theme parks. The chosen product line in this unit consists of Disney-, Pixar-, Lucasfilm-, and Marvel-branded products sold at retail stores within Disney parks. They include multiple product categories: footwear, food, books, stationery, accessories, toys, games, apparel, health and beauty, home furnishings and décor, and consumer electronics (The Disney World Company, 2022a).
The company sells these products in numerous countries worldwide. In particular, it has 20 stores in North America, about 40 stores in Japan, two stores in China, and 15 stores in Europe (The Disney World Company, 2022a). In 2021, the Disney Company also announced its plans to focus on online business (The Disney World Company, 2022a). To ensure that the supply in all these locations meets the demand for products, the Disney Company has established a solid supply chain with well-developed inbound and outbound logistics.
Application of Supply Chain Principles
Listening to Market Signals
One principle Disney uses in its supply chain management is listening to market signals to project future demand and allocate resources optimally. For example, Disney is well aware of the seasonality of its business, as demand for its theme parks peaks in the summer and during early winter and spring holidays (The Disney World Company, 2022a). Hence, the company’s demand planning is based on its business’s seasonal nature.
Disney also utilizes various technologies to scan market signals more effectively. For example, visitors to their theme parks are given bracelets called Magic Bands, which are equipped with sensors that provide the company with much information about customer behavior (“Big Data behind Disney Magic,” 2019). Using this data, the company can identify which characters are the favorites of children and which products are the most popular among customers. This information greatly benefits the company’s supply chain because it helps predict demand more accurately.
Strategic Management of Sources of Supply
Another supply chain management principle implemented by the Disney Company is managing sources of supply strategically to decrease the costs of owning services and materials. Since Disney is a global company, its supply chain is spread worldwide to meet global demand and reduce the costs of serving foreign customers. In 2021, the firm had supply chain facilities in 103 countries, with 28% of its manufacturing facilities located in China, known for its low labor costs (The Disney World Company, 2022c). In addition, the firm employs a competitive bidding process to select its suppliers, enabling it to choose companies that can provide maximum value for the money spent.
Supply Chain-Wide Technology Strategy
The third principle applied by Disney is developing a supply chain-wide technology strategy to support decision-making and help track the flow of services, products, and information. The company adheres to this principle by investing in multiple supply chain programs that focus on developing technology for easier interaction between buyers and suppliers. One such program is Better Buying, which provides retailers and suppliers with a cloud-based platform to receive data-driven information on purchasing behaviors (The Walt Disney Company, 2022b). Disney has also continuously invested in big data applications, with approximately a thousand full-time employees dedicated to building the company’s advanced analytical capabilities (“Big Data behind Disney Magic,” 2019). Hence, the company effectively utilizes this principle of supply chain management.
References
Big data behind Disney magic. (2019). Harvard Business School Digital Initiative. Web.
The Disney World Company. (2022a). Fiscal year 2021 annual financial report. Web.
The Walt Disney Company (2022b). Funded programs and initiatives. Web.
The Walt Disney Company. (2022c). 2021 corporate social responsibility report. Web.