Barilla: Just-In-Time Distribution System
Executive Summary
My decision for this case is to implement the Just-In-Time Distribution (JITD) system that was proposed by his predecessor Brando Vitali. This system is entirely different from the existing set up and is being opposed by both the distributors and Barilla’s Sales and Marketing Department. Barilla Spa, an Italian pasta manufacturer, is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. In order to bring things back and to improve its margins. I have studied the reasons for this opposition by several facts and have suggested recommendations. I suggest that in order to condense the Bullwhip effect being experienced by Barilla, their supply chain would have to be centralized. I have given my rationale for the JITD system to work and have suggested recommendations to resolve all existing issues. I think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners. I also believe that by following my recommendations, Barilla will succeed in influencing its distributors and Sales personnel to work together and implement the JITD program. This will not only result in better performance in terms of time and money but also promote trust and good relations among all the partners in the supply chain.
2. Identification of the problem
• Transportation Costs: As a result of uneven demand, Barilla had to transport more products to its distributors in periods of high demand in lesser time than when compared to periods of low demand. The greater number of trucks, etc. that it required in periods of high demand increased its Transportation costs.
3. Environmental and Root Cause Analysis
Quantitative
Trade Promotions
Barilla 's sales strategy relied on the use of trade promotions to push product into the grocery distribution network. Barilla divided each year into 10 or 12 "canvass" periods, typically four to five weeks in length,
My decision for this case is to implement the Just-In-Time Distribution (JITD) system that was proposed by his predecessor Brando Vitali. This system is entirely different from the existing set up and is being opposed by both the distributors and Barilla’s Sales and Marketing Department. Barilla Spa, an Italian pasta manufacturer, is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. In order to bring things back and to improve its margins. I have studied the reasons for this opposition by several facts and have suggested recommendations. I suggest that in order to condense the Bullwhip effect being experienced by Barilla, their supply chain would have to be centralized. I have given my rationale for the JITD system to work and have suggested recommendations to resolve all existing issues. I think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners. I also believe that by following my recommendations, Barilla will succeed in influencing its distributors and Sales personnel to work together and implement the JITD program. This will not only result in better performance in terms of time and money but also promote trust and good relations among all the partners in the supply chain.
2. Identification of the problem
• Transportation Costs: As a result of uneven demand, Barilla had to transport more products to its distributors in periods of high demand in lesser time than when compared to periods of low demand. The greater number of trucks, etc. that it required in periods of high demand increased its Transportation costs.
3. Environmental and Root Cause Analysis
Quantitative
Trade Promotions
Barilla 's sales strategy relied on the use of trade promotions to push product into the grocery distribution network. Barilla divided each year into 10 or 12 "canvass" periods, typically four to five weeks in length,