Boeing Australia Case Study

1480 Words Apr 13th, 2013 6 Pages
Executive Summary

Barilla is operating in a very old-fashioned distribution system that needs to be changed. Implementing this new JITD will increase efficiency across the supply chain. The system will reduce manufacturing costs, increase supply chain visibility, increase distributors’ dependence on Barilla, establish better relationship with distributors, reduce inventory level and most importantly improve manufacturing planning and forecasting using objective data. This JITD will see Barilla’s supply chain synchronized from manufacturing to end - users.

Strategically, the best decision for Barilla is to implement the JITD program.
This will allow for greater capability and flexibility to respond to inputs from end-consumers.
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The variability in demand is as a result of lack of forecasting systems or sophisticated analytical tools at the distributors end. Orders for Barilla’s dry products swing from week to week and such extreme demand strains Barilla’s manufacturing and logistics operations. For example, 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 to unexpectedly high demand. In addition, holding sufficient finished goods inventories to meet distributors order requirements was extremely expensive when weekly demand fluctuated so much and was so difficult to forecast.
Advertising and trade promotions are also intensifying the resistance to implementing this JITD. Distributors have become accustomed to price discounts through volume orders, promotional activities and transportation. Barilla’s sales strategy relied on the use of trade promotions to push products into the grocery distribution network. Distributors looks forward to these promotions and also sales people within Barilla looks forward to giving distributors discounts in this very old-fashioned distribution system.

Alternatives and/or Options

Implementing the JITD system would prove beneficial to the company and its overall supply chain management. Benefits of this

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