Just in Time Distribution

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Just-In-Time Distribution and Barilla SpA

Anybody who knows something about business had heard the term Just-in-time (JIT) inventory. It involves producing only what is need, when it is needed. The principle of Just in time is to eliminate sources of manufacturing waste by getting the right quantity of raw materials and producing the right quantity of products in the right place at the right time.(1) In this way, manufactures receive parts and materials "just in time" to meet the day's manufacturing quota with hardly any extra.(3) JIT is a manufacturing management method developed in Japan during the 70's to meet customer demands. The individual most credited with the development of JIT is Taiichi Ohno, the vice president of Toyota
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Barilla revolutionalized the Italian pasta industry's marketing practices by creating a strong brand name and image for its pasta and by 1968 hit double-digits in sales growth. Due to their size and amount of products, Barilla was organized into seven divisions: three pasta divisions, a bakery products division, the fresh bread division, the catering division, and the international division. By 1990, Barilla became the largest pasta manufacture in the world (which it sill is today).(4) Barilla SpA had a couple different channels of distribution.( Illustration shown on last page of report.) First of all, Barilla divided it entire product line into two general categories: 1.)Fresh products, which included fresh pasta products that had a 21 day shelf life and fresh bread that had a one day shelf life and 2.)Dry products, which included dry pasta that had long shelf life of 18 to 24 months and longer shelf-life bakery products such as cookies, flour, etc. that had a medium shelf life of 10 to 12 weeks. Most of Barilla's products were shipped from the plants in which they were made to one of two central distributions centers, the Northern CDC or the Southern CDC. Other fresh products were moved quickly through the distribution system in which only three days of fresh product inventory and a month's worth of dry product inventory was held in each CDC. Barilla
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