Barilla's Just-in-Time-Distribution Program - Case Report
Barilla’s Just-in-Time-Distribution Program - Case Report
I. Part 1: Executive Summary
Barilla, the word’s largest pasta producer, is confronting with huge fluctuation on its production because the production is dictated by distributors’ orders. This variation leads to expand production price as well as piled up inventory at distributors’ depots. However, there was also stockout registered at retailers. My decision is to implement Just-in-Time-Distribution at Barilla, in order to reduce the demand fluctuation. Just-in-Time-Distribution concept assumes that the delivery, and implicit the manufacturing, will be dictated by the consumers’ needs and controlled by the Barilla. Having the possibility to do this, based on Barilla’s own logistics, the variation for manufacturing and for distribution would be smoothed out. Furthermore, Just-in-Time-Distribution will avoid either the accumulation of the inventory at the distributers’ depots or the running out of stock for retailers. Taking into consideration that Barilla is a vertically integrated corporation, the rise and fall in demand affect not only the pasta plant but also the flour mills, transportation, etc. This means a change from arm’s-length policy to a supply chain management one. But there are some problems. The costumers of the world’s largest pasta producer were reluctant either to share the detailed sales data with Barilla or to lose their control over the placing of orders at their willingness. Moreover, company’s own sales and marketing people feel their position threaten if this concept will be implemented.
Page
I. Part 2: Table of Content
I. Process Elements/Table of Content Part 1 Executive Summary 2 Part 2 Table of Content 3
II. Issue with Impact Analysis 4
III. Environmental & Root Cause Analysis 5
IV. Alternatives and/or Options 5
V. Recommendations and Implementation 5
VI. Monitor & Control 6
VII. Conclusion &
I. Part 1: Executive Summary
Barilla, the word’s largest pasta producer, is confronting with huge fluctuation on its production because the production is dictated by distributors’ orders. This variation leads to expand production price as well as piled up inventory at distributors’ depots. However, there was also stockout registered at retailers. My decision is to implement Just-in-Time-Distribution at Barilla, in order to reduce the demand fluctuation. Just-in-Time-Distribution concept assumes that the delivery, and implicit the manufacturing, will be dictated by the consumers’ needs and controlled by the Barilla. Having the possibility to do this, based on Barilla’s own logistics, the variation for manufacturing and for distribution would be smoothed out. Furthermore, Just-in-Time-Distribution will avoid either the accumulation of the inventory at the distributers’ depots or the running out of stock for retailers. Taking into consideration that Barilla is a vertically integrated corporation, the rise and fall in demand affect not only the pasta plant but also the flour mills, transportation, etc. This means a change from arm’s-length policy to a supply chain management one. But there are some problems. The costumers of the world’s largest pasta producer were reluctant either to share the detailed sales data with Barilla or to lose their control over the placing of orders at their willingness. Moreover, company’s own sales and marketing people feel their position threaten if this concept will be implemented.
Page
I. Part 2: Table of Content
I. Process Elements/Table of Content Part 1 Executive Summary 2 Part 2 Table of Content 3
II. Issue with Impact Analysis 4
III. Environmental & Root Cause Analysis 5
IV. Alternatives and/or Options 5
V. Recommendations and Implementation 5
VI. Monitor & Control 6
VII. Conclusion &