Barilla Spa - 8

1657 Words7 Pages
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…show more content…
The lack of demand information coupled with the different specifications left it difficult to respond quickly to changes in demand. Finally, the lack of information changed the effect of Barilla 's incentives to distributors. The distributors were offered volume discounts for making a full truckload or multiple truckload order. The lack of forecasting meant Barilla was offering a reward for the distributors ' inability to predict demand. If Giorgio were to implement JITD to control the demand fluctuations, there would be several issues he would need to address. Internally, Barilla 's own sales and marketing organizations saw the idea as infeasible and risky. The sales representatives are apprehensive that their functions at the company would be reduced. The proposed JITD system required the sharing of sales data from the distributors with Barilla. Barilla would then forecast and deliver appropriate quantities of the products to the distributors at the accurate time in order to meet demand effectively. This would be a fundamental change from the current traditional supply-chain system where there was no sharing of information from distributors and they could place orders as they saw fit. The JITD proposal received severe disapproval and criticism from the distributors and from Barilla 's own Sales and Marketing department. The distributors are unconvinced and unwilling to share warehouse data with Barilla. They lack both faith and trust in Barilla and

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