Barilla Case: Causes of Fluctuation

When it comes to the production of these products and how much the company should produce each year many factors come into play. Some of these factors include weather, taxes for that year, wage increases, outbreaks of pests destroying crops, human error in the production line, increased gas and diesel fuel prices, and so on. Many of these factors are random events from nature or a new law implemented by the government that puts strict regulations on the production of a certain product. For instance, in 2014, a major drought occurred in the Midwest states, which resulted in low water resources and the reduction of feed for cattle produced that year. This resulted in an increase in beef prices and the reduction of beef produced for that year (Midwest 2014). Events like this can make or break a business and it’s up to the owner of the

However, the largest hurdle that most companies face during the implementation/integration of a new system or process are the users. It is normal to encounter resistance by users, they perceive change as a potential threat to their jobs, and removes them from their routine and/or comfort zone.

distributors would have to submit their Stock Keeping Unit (SKU) so that Barilla can control it.

Some of the disadvantages are: limiting the vendors may limit the variety of products, relinquishing inventory control over to vendors and distributors may negatively impact their customer satisfaction, and the customers may decide to deal with supplier directly which could put Best Buy at risk of loosing their business.

A third factor contributing to the Bullwhip Effect is the specific production process of pasta. Barilla cannot re-act to demand changes quickly enough, due to production restrictions as e.g. heat and humidity specifications. That means, if a product is out of stock it cannot be produced and delivered immediately.

It is also safe to assume that the impacted Stock Team will be ones who will present the most resistance. This drastic change will not only changes their work schedules and job roles, but may very well have an impact on their personal lives. For that reason it is important that the organization gives our associates and stores plenty of notice before the change. This will give associates time to make the necessary adjustments before the change is implemented.

In order to increase visibility downstream, Barilla has developed a program that pulls relevant shipping information from their downstream partners. This allows Barilla to optimize production and transportation decisions given the information. Barilla¡¯s Just-In-Time-Distribution program (JITD) effectively looks at the daily shipping decisions made by distributors and warehouses, combines that information with each distributor¡¯s stock position by SKU and plans future production and replenishment decisions for each distributor.

In the effort of keeping with the extremely unpredictable demand the production cost may rise dramatically as a result of diseconomies of scale. In addition the set up cost for producing different products in the production line is heavy and Barilla has an enormous product line of different products. The production plant in Pedrignano is big and technologically advanced but at the same time the pasta production is a complicated process and especially the drying of different types of pasta required precision in temperature and humidity levels that could not be changed

In order to move with the times, the organisation may introduce new equipment or software. Some staff may see this as a positive step that moves the business forward, but some employees may feel anxious about the change, how much it is costing the business and whether it is actually going to improve their role or create more problems.

One of the underlying causes of the difficulties that the JITD program was created to solve was the effects of inconsistent demand that came from Barilla’s distributors. The extreme demand variation strained Barillas manufacturing and logistics, and made very hard for Barilla to meet that demand. For example, as noted on the case “the specific sequence of pasta production necessitated by the tight heat and humidity specifications in the tunnel kiln made it difficult to quickly produce a particular pasta that had been sold out due

Due to the fact that imitations for the product are being developed more rapidly, Ben & Jerry have changed their primary marketing goal to establish products that cannot be imitated, but the technological developments of the company have not allowed them to launch the products within a decent time limit. B&J 's mission statement includes the need for a wide variety of innovative flavors. Five years to find the perfect coffee bean seems unnecessary. Coffee ice cream, in this period, may have become undesired by the customer. This scenario is compounded by, the quick replication by competitors, and the high costs related to manufacturing each different flavor.

According to Gilbert and Bower (2002), it depends on how we react to these changes that could affects the organization. We could treat it as a threat or as an opportunity. If we see this change as a threat, we tend to react defensively, taking immediate, aggressive action to protect ourselves, while, if we see the change as an opportunity, we tend to be more deliberate and reasoned in our response and could postpone action, continue in our established routines as we wait to see how the situation plays out (Gilbert & Bower, 2002). Apple’s approach

Barilla’s products are divided into Fresh products and Dry products. The demand for these two distinct kinds of products is quite different, and the order, shipment and delivery methods for them are also various.

Because of the way Barilla’s manufacturing process works, demand fluctuations have a significant impact on the company’s operations. Tight heat and humidity specifications in factory tunnel kilns require very specific sequences of pasta production, which means Barilla has limited flexibility in ramping up (or ramping down) the production of pastas experiencing unexpected demand levels. Furthermore, because of extremely high holding costs, it is simply not economically viable for Barilla to maintain substantial finished goods inventories to guarantee fulfilling distributors’ fluctuating order quantities.

The findings will demonstrate that Di Bella Coffee is one of Australia´s leading specialty coffee chains and is starting to expand into the international market successfully. The combination of a high quality product, the focus on customer service and new innovation together with the strong brand image have led to Di Bella Coffe´s success. In order to stay competitive and profitable in the coffee market and to meet consumer demand, Di Bella Coffee will need to evaluate the changing needs of the coffee