"Imagineering" a supply chain

If you've spent any time at Walt Disney World's Magic Kingdom in Orlando, Florida, USA, 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 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 Central Florida's orange groves in the 1970s, it decided to follow a similar principle when it came to its supply chain. To make material handling and movement invisible to the parkgoer, Disney constructed its "Utilidor"—short for "Utility Door"—a one-square-mile-wide labyrinth below the park's main streets.

The Utilidor feeds goods 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 safeguard against stock-outs.

To Disney's supply chain executives, the Utilidor exemplifies the company's logistics model at work. They have 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. But 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.

For the Disney supply chain organization, the biggest opportunity—and the biggest challenge—may lie ahead. Within the next three to five years, Disney will open a US $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 live within two hours of Shanghai and are, in his words, "income-qualified" to pay for admission to the park.

While the scale of the Shanghai park may be unprecedented, it is unlikely that 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 yellow dress like the one worn by Belle in "Beauty and the Beast," the company wants to make sure that dress, in her size and in that color, will be there when she is.

You can hear more about Disney's supply chain story at CSCMP's Europe Conference, April 23-25, 2012, in Frankfurt, Germany, where John Lund will give the closing address.