Case Study Of Barilla

The JIT approach to manufacturing involves timing the delivery of resources so that they arrive just when needed. Inventory optimization models help the firm determine how many of which items in which sizes should be delivered to each specific store during twice-weekly shipments, ensuring that each store is stocked with just what it needs. Trucks serve destinations that can be reached

Distributors will respond to their decisions. Neptune cannot afford to start a price war with its competitors

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

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.

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

JITD might also help the relationship between Barilla and its distributors, since Barilla won’t need to use pressure on distributors to hold more finished products than necessary.

As a result of this overproduction, another negative effect of just-in-case manufacturing is a decrease in cost efficiency. The most obvious costs would include storage and warehouse expenses (Conrad “The Advantages of…”). In order to have these large inventories, there have to be places to hold such large quantities of goods. Storage costs comprise of preserving the accumulated product to ensure that it functions properly. If the cars or parts are unable to perform, stock might have to be discarded, increasing physical waste. The products lost mean that money and opportunity for profit are lost. In addition to storage costs, there are also warehouse expenses, in which energy consumption, personnel, and assorted equipment are needed to maintain the facility and product. Since our just-in-case manufacturing method requires that we make large amounts of cars, we need places to store them. The more product, the more warehouses, which means there are more warehouse costs that will diminish any profit that we make.

As argued by Lubben (1988), JIT allows businesses to have better management since this ensures that there is no loss as there is sufficient number of clients requiring the equipment. This reduces her to deal with huge deliveries when the clients’ numbers are not increasing. (Lubben, 1988, p.4) also suggested the idea of JIT that “... major elements of manufacturing – capital, equipment and labour are made available only in the amount required and at the time required to do the job.” So it is a good practice by utilising JIT approach as it reduces wastes and ensure the correct amount of equipment is available (Lubben,

JITD can lower the distribution cost, inventory cost and even the manufacturing costs. Distribution can be more efficient as the delivery is not based on the order from distributors. It is based on the forecast from Barilla. Barilla can better utilize and arrange the distribution team by planning a more efficient route and schedule to deliver the require product to each distributor on time. Barilla become more proactive in controlling the delivery schedule and so lower its distribution cost.

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.

any material interruption in their supply chain beyond their control, such as material interruption of roasted coffee supply due to the casualty loss of any of their roasting plants or the failures of third-party suppliers, or interruptions in service by common carriers that ship goods within their distribution channels, or trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions;

The AAA region was hit by a period of economic uncertainty caused by the slowdown of Chinese growth, instability of Middle East and economic recession in Russia. The Barilla brand market share in value terms increased in all of the key markets in this area: confirmed position as leading competitor at national level in Russia, market leader in Turkey, and further expansion in Middle East and Israel markets with an aggressive dedicated strategy. The substantial investment in the Solnecnogorsk (Russia) for pasta manufacturing will significantly improve flexibility and profitability in this area (Barilla,

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

According to [5], Just-in-Time (JIT) inventory management enables an organization to gain competitive advantage by not having a large or excessive amount of inventory in warehouse. The organization only needs to order the parts when they are actually needed and new materials are produced only when old materials have finished. One advantage of adopting this strategy is that there will be no excess of inventory that needs to be stored and hence the inventory levels will be reduced as well as the cost of carrying and storing goods. One major disadvantage of this is that the organization will expose it in the risk of ordering problems for example a supplier is not able to provide parts on time. The result of this is that the organization cannot fulfill the order and contributes to customer dissatisfaction.