Barilla Spa - 8

My decision is to implement the Just-in-Time Delivery system. JITD will resolve the increasing operational inefficiencies and cost penalties that have resulted from large week-to-week variations in Barilla’s distributors order patterns. In order to reduce the Bullwhip effect being experienced by Barilla, their supply chain would have to be Centralized. This solution allows Barilla to see end customer demand and eliminate costs involved with inventory, manufacturing, and transportation. JITD would allow Barilla to work directly with its distributors and create a flexible manufacturing process. By following the suggestions made in the plan of action, Barilla will succeed in influencing its distributors and Sales personnel to work together and implement the JITD program, which will produce better performance in terms of time and money but will also promote trust and good relations among all the associates in the supply chain.

The main problem addressed in this case is how to effectively implement the JITD system suggested by Giorgio Magialli, the Director of Logistics. Barilla has a very complex distribution network. Barilla has been experiencing large amounts of variability in demand which are resulting in operational inefficiencies and increased manufacturing, inventory and distribution costs. The proposed JITD system requires the distributors to share their sales data with Barilla, who would then forecast and deliver appropriate amounts of products to the distributors at the right time in order to effectively meet demand. The system is received with resisitance from unconvinced and leery distributors as well as internally with the sales reps who fear, among other things, reduction in responsibilities.

In this case, a successful decision would result in the reduction of the Bullwhip effect, which Barilla is experiencing. It would also reduce the variable demand that is causing inefficiencies and increasing costs. The decision should bring positive results to