Barilla SpA one of the world’s largest pasta producer has growing burden of demand fluctuations and venialities on its manufacturing and distribution system. Giorgio Maggiali as director of logistics trying to implement idea of JITD (Just-in Time Delivery) so that Barilla’s own logistics department could manage more effectively delivery quantities and meet end consumer’s needs and more evenly distribute the workload on its manufacturing and logistics systems.
Giorgio Maggiali after couple of years of efforts to implement the idea has not been successful and could not make significant progress.
Problems to implement JITD
The problems and weaknesses Giorgio Maggiali has to implement the JITD are: • Barilla’s distributors unwilling to support the idea as they do not want to give up their authority to place and order and lose control over it • Distributors reluctant to provide sales data upon which Barilla could forecast demand and make decisions to improve delivery and manufacturing, as a result Barilla is relying on distributors demands, which is having bullwhip effect for Barilla. • Barilla’s own marketing and sale people resisting the idea.
Bullwhip Effect is a phenomenon in supply chain where distorted information is passed through large variations and swings in demand
Barilla’s Distribution system:
Barilla has divided its product line into Dry which represents 75% of total sales and Fresh 25% of sales.
• Fresh products are shipped through Barilla’s central distribution centres.
• Nearly two-third of dry products are destined for supermarkets through independent distributors who purchase from CDC
• The remainder of the dry products are distributed through Barilla’s 18 own depots mostly to small shops.
Focus of JITD
Barilla is solely focusing on JITD proposal on its dry products sold through independent...