levels of inefficiencies and rising costs due to variability in demand from its distributors. In order to bring things back into place and to improve margins‚ Giorgio Magialli‚ the Director of Logistics at Barilla wants to implement a Just-In-Time Distribution (JITD) system that was proposed by his predecessor Brando Vitali. This system is entirely different from the existing setup and is being opposed by both the distributors and Barilla’s Sales and Marketing Department. In this report we have studied
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Executive Summary Barilla‚ the leading pasta manufacturer in Italy‚ faces increasing problems related to demand fluctuation. Their distributors also suffer from high inventory holding costs and low service levels on the other hand. This report explains‚ why the company and their distributors are troubled with this situation and how Barilla intends to solve it. The problem Barilla experiences is called the “Bullwhip Effect”‚ i.e. that demand variability increases when moving up the supply chain
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more difficult to forecast. Distribution Process First of all‚ there is no limitation for order quantities size of the distributor‚ which results in various demand quantities and high level of fluctuation. Second‚ distributor’s ordering pattern and volumes is varied from each other‚ which makes demand various from time to time. In addition‚ most distributors’ inventory systems are simple‚ and few had forecasting systems or sophisticated analytical tools for determining order quantities
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approach: rather than send product to the distributors according to their internal planning processes‚ we should look at all of the distributors’ shipment data and send only what is needed at the stores-no more‚ no less. The way we operate now it’s nearly impossible to anticipate demand swings‚ so we end up having to hold a lot of inventory and do a lot of scrambling in our manufacturing and distribution operations to meet distributor demand. And even so‚ the distributors don’t seem to do such a great job
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27.6% from the first half of the previous year. The Japanese economy and declining value of the Yen relative to the U.S. Dollar has decreased AJL’s sales volume and profit margin. The Japanese government recently passed laws that confused AJL’s distributors and discouraged potential consumers from buying certain product lines. Furthermore‚ AJL suffers from a negative public image with over 70% of their customer base having either a neutral or negative opinion of the company. In order to rebuild
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In the long term I am recommending that Barilla SpA implement a Just in Time Distribution (JITD) system to reduce excess inventory and eliminate stock outs at the distributor to market level of the distribution chain. The new system will include a forecasting and planning system based on information provided by the distributors on a day-to-day basis. The JITD will reduce inventory to acceptable levels and will reduce inventory carrying cots. It will also flatten demand resulting in cost savings
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DESCRIPTION OF HISTORIC PLACE Algonquin Provincial Park is a provincial park established in 1893. It is located on the Canadian Shield‚ northeast of Toronto and northwest of Ottawa. The terrain is hilly and heavily wooded‚ with five major rivers and numerous small lakes within its perimeters. The formal recognition encompasses 7571 square kilometres of land‚ 15% of which is WATER‚ and the various buildings‚ structures‚ roadways and pathways contained therein. Jasper National Park is the largest national
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called a remake of popular “Just-In-Time” manufacturing concept. Although Maggiali has been trying to convince his consumers that the JITD would definitely work‚ he has not made much progress. The program was met with significant resistance by the distributors and Barilla’s own Sales and Marketing organizations. The short term objective of Maggiali is to be able to overcome the resistance and implement the JITD solution while the long term orientation is to increase the profitability of the corporation
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large swings in demand on the supply chain resulting from relatively small‚ but unplanned‚ variations in consumer demand that escalate with each link in the chain .Events that can trigger begin at any point in the supply chain: consumer‚ retailer‚ distributor‚ manufacturers‚ raw materials suppliers and so on. As orders progress up the chain‚ each level perceives a greater demand that it seeks to rectify from its own Lets discuss in more detail some of the causes that can trigger this event and we can
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time we find large number of distributors‚ importers. The price gap will continue to widen. Majority of the products will be produced in the countries of Southeastern Asia‚ where labor costs are much less than in developed countries. They will have to close or re-profile to produce exclusive high quality products. Competition between distributors will increase. It will not be feasible to sustain retail growth on the long run. It will lead to disappearance of few distributors and mergers among others
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