Barilla Case Study

A new truck was implemented into the schedule, to transfer Spicy Cube from the warehouse to the final destination, so the stores did not run out of inventory as often. Just the slight change in how the trucks ran made a huge impact by altering the shipping direction, the trucks were able to get the product to intended destinations somewhat faster, which was another factor in the stores stabilizing product inventory on location. Because the product was leaving the warehouse and getting to stores faster, the initial problem of product on hand and storage space was rectified and the stores showed a moderate increase in profit. Some of the actions taken were to reduce or better yet, eliminate the issue of excessive product inventory, included combining, and making the shipments larger and increase the amount of product on hand, so that stores that where low on Spicy Cube could retain a normal or slightly more of the product to reduce risk of shortage. Due to making shipments larger, I added an additional truck to assist in getting the product inventory from the warehouse to the stores.

Since Donna Dubinsky and Roy Weaver did not address Mr. Jobs questions regarding the 1985 Distribution Business Plan, he assigned Debi Coleman to develop a new Distribution Strategy Proposal based on the “just-in-time” concept. Ms. Dubinsky was not proactive in presenting her issues and concerns regarding the “just-in-time” concept. It is assumed that she considered the idea not feasible and that it would not gain momentum; however, the exact opposite occurred.

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

L.L. Beans approach to a one shot order increases the risk of lost sales due to insufficient inventory as well as increases the risks of higher costs due to excessive inventory. The case indicates that lead times are significantly long from their suppliers (in the order of 8 to 12 weeks). We are not clear on the size of these orders but assuming these are mostly a one shot batch, it is feasible to estimate that these lead times would be reduced for a smaller quantity per order and more frequent orders. Although this approach would increase the transactional costs with suppliers (because a higher volume of individual orders would be placed at the supplier) it might generate significantly more impactful benefits such as:

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. Several factors enforce this Bullwhip Effect, e.g. high lead times, poor demand forecasting, and batch ordering. In this report we will point out, that exactly those aspects can be identified as the underlying reasons for Barilla’s problems. In a

During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand

a. After analyzing Pro-Forma Income Statement for all four quarter the utilization of Just-in-time strategy in Quarter 2-3 would have made Lean in Enterprises for more profitable. Since the premise of Just-in-time is to reduce waste and make sure that the supply chain is working efficiently to meet the customer demand. Just-in-time inventory is the minimum inventory necessary to keep a perfect system running. In Operation Management Heizer and Render define JIT inventory as the exact amount of the good arrives at the moment it is needed. (p. 2010) The ability to implement this strategy in Quarter 2 and Quarter 3 would have been very beneficial to the company expenses. The Just-In-Time strategy would have help the company avoid the $8,163 holding cost an excess capacity cost of $491,524. Just-in-time strategy would have prevented additional production after the product had low customer demand. Just-in-time would have also prevented the same waste

Looking at the fluctuation in Exhibit 12, one could expect that poor coordination in the supply chain would increase costs. Provide a discussion for the cost of poor coordination in Barilla’s supply chain. Items to consider here include production changeovers or setups, inventory levels, facility utilization, transportation costs, quantity discounts and promotions, canvas periods etc.

4) Exploring the possibility of implementing JIT (Just in Time) system that can reduce the finished goods inventory at

Two models of inventory can be examined in the case of Boston Beer Company. Because there are a large variety of offerings available, different approaches can be viewed. With their many seasonal offerings, in some cases only available for 2-3 months, or limited releases with a possible one time production run, we can examine the “newsvendor

JITD created lot of internal barriers to Barilla; while some of the concerns are easy to overcome others would need more convincing. For example, the sales department, sales representatives receive more on their compensation through commission from their sales. JITD would cut or reduce to zero most of sales people responsibilities, which in turn will squeeze their commission, as one sale man said “Our sales levels would flatten if we put this program in place”. As noted in the case most of the sales come from the

Even though direct competition has decreased, the tendency of retailers to get their products directly from manufacturers puts the company in a position of relooking its competitive edge as a distributor. The marketplace is shifting from an individuality to supply chain performance – the ability to meet end-customers needs through product availability and responsive and on-time delivery. Supply chain performance crosses both functional lines and company boundaries. Brunswick must change their way to fill customer orders faster and more efficiently than the competition.

The objective of a firm confident with the strength and durability of its competitive advantage and internal resources is to export its business in markets where the potentiality of the benefits arising from the business strategy are not exploited fully or at all. A logical path of growth for a firm follows the Entrepreneurial, Organizational, Corporate, and International phase (Giarratana, 2016). Barilla definitely developed to the latter stage around the 1970’s, when Grace saw the opportunity of exploiting this potential final growth of the Italian group. The failure by the American management and ownership did not mean that the concepts were wrong. Actually, Pietro foresaw the opportunity of taking back Barilla and

In 2010, PepsiCo Beverage Company (PBC), a working unit of PepsiCo Inc. (PepsiCo), the second biggest sustenance and refreshment organization on the planet, got the inventory network advancement recompense from the Council of Supply Chain Management Professionals (CSCMP). PepsiCo was given this grant for its creative conveyance procedure, the "Direct to Store Delivery show", that decreased framework wide stock, disposed of stockroom space imperatives, upgraded the potential for boundless SKU development, and conveyed distribution center expense reserve funds. In the wake of indicating tremendous development in the 1990s and early2000s, PBC thought that it was hard to deal with its dispersion focuses and distribution centers.

Starbucks then reorganized their supply chain – developing new cost-effective models, relooking into suppliers and reconsidering expenditures by ingredient instead of purchase price (Cooke, 2010). The supply chain was streamlined into 4 categories: Plan, Source, Make and Deliver, adopting a simplified system where coffee beans were manufactured in the same region where they are sold (Starbucks, 2012b, November 30). This was modeled by existing