Table Of Contents: Barilla Case Report And Executive Summary

Only available on StudyMode
  • Download(s) : 229
  • Published : November 15, 2012
Open Document
Text Preview
BARILLA CASE REPORT

Table of Contents

Executive Summary

Part 1 Executive Summary

Issue Identification

Part 2 Fundamental Issues
Part 3 Systematic Issues

Environmental & Root Cause Analysis

Part 4 Qualitative and Quantitative Analysis

Alternatives and or Options

Part 5 Alternatives

Recommendations

Part 6 Recommendations

Implementation

Part 7 Recommendations and Implementation plan

Monitor & Control

Part 8 Monitor & Control
Part 9 Conclusion

Part 1 Executive Summary

I realized that Barilla is confronting with huge fluctuation on its production because of the unsteady orders from distributor. This variation leads to expand production prices as well as piled up inventory at distributor’s depots, meanwhile, there was also stock out recorded at retails.

After careful analysis of the whole situation, my decision is: I have recommended the implementation and execution of the JITD system because production under this system is driven by the consumer demand and controlled by Barilla instead of being controlled by the distributor’s orders.

It’s possible to do this based on Barilla’s own logistics; the variation of manufacturing would make distribution work well. Furthermore, JITD will avoid either the accumulation of the inventory at the distributer’s warehouse or running out of stock for retailers. As Barilla is a vertical integration corporation, the rise and fall in demand would affect not only the pasta plant but also the raw material supply such as flour, transportation, etc.

Above all, it’s necessary to implement the new way to a supply chain management. However, as the long time traditional operation for the supply, there are some difficulties need to be solved and conquered, such as customers don’t want to lose their control over the placing of orders at their willingness, and our own sales reps feel their position to be threaten if this project will be implemented.

Implementing of JITD policy is inevitably, it’s relative to the corporation’s growth and sales increase, so it’s necessary to well solve existing problems and stunting,well control the implementation, I have the confidence that this policy will fulfill the great profit for corporation.

Part 2 Fundamental

The fundamental issue that was Barilla lacked of promote and accurate sells date information that was necessary to support inventory quantities according to the actual market demand, which resulted in the large week to week variation in demand and brought the operational inefficiencies and cost increase. This major issue was caused by the following systematic issues:

Part 3 Systematic Issues
1.Transportation Incentive
Nature: Tactical Timing: Short term
In order to reduce transportation cost, Barilla encourage full truck loads of shipment and provided 2-3% discounts to its distributors and customers to by more inventories, so that distributors and customers can save money by ordering large quantity of goods. 2.Large Quantity Incentive

Nature: Tactical Timing: Short term
In order to increase the sales, Barilla encourage distributors and customers to order large quantity, and provide 4% discount for 3 full trucks egg pastas, it’s the same as transportation incentive, which both can’t reflect the actual demand of actual market. 3. Lack of Efficent Forecasting:

Nature: Strategic Timing: Short term and long term
There is no effective modern technology to make sales forecast, as sales reps just calculated inventory manually, which lower the accurate rate and the information provided is hysteretic. The unavailable actual EDI technique and lack of profession sales forecasting hinder the accuracy of sales data. 4. Promotional activities:

Nature: Tactical Timing: Short term
Barilla ran periodic promotional activates which caused fluctuations in...
tracking img