Barilla Case Study

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The Just-in-Time Distribution was created to solve many difficulties that Barilla and their customers were facing. Barilla increasingly felt the effects of fluctuating demand. Orders for Barilla dry products often swung widely from week to week. With this demand variability, it strained Barilla’s manufacturing and logistics operations. Even though JITD was created to solve the problems they were having, many stakeholders did not agree with the program. Some manufacturing and logistics personnel would rather ask distributors or retailers to carry additional inventory to reduce the fluctuation in distributors’ orders even though with their current inventory levels, many distributors’ service levels to the retailers were unacceptable. Others felt that the distributors and retailers were already carrying too much inventory. Customers were not helping also. They were simply unwilling to give up their authority to place orders as they pleased. But what was more disconcerting was the internal resistance from Barilla’s own sales and marketing organizations, which saw the concept as infeasible and dangerous. Barilla and their customers are now realizing that they do not have enough room in their stores and warehouses to carry the very large inventories manufacturers would like them to. It is not easy to increase shelf space in retail outlets and manufacturers are constantly introducing new products and wanting retailers to display each product on the fronts of their shelves. Distributors feel similar pressure, both to increase inventory of items they already stocked and to add items they currently did not carry to their product offerings. Both manufacturers and retailers are suffering from thinning margins. The JITD proposes to rather than send product to the distributors according to their internal planning processes, they should look at all of the distributors’ shipment data and send only what is needed at the stores. They will send no more and no less of what is...
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