1. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program? Just In Time Distribution is a unique idea that the logistics director wanted to implement at Barilla. It was in response to the significant fluctuations in sales demand that Barilla was experiencing from their distribution centers. Exhibit 12 in the case shows how volatile the ordering could be. It looks very unpredictable using their current
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What is the JITD program? Evaluate it from the perspective of Barilla and an independent distributor. What kind of products might such a program is best suited for? The pasta supply chain suffered high inventory levels at each segment of the supply chain; stock-outs at the distributor’s level and the customer’s demand variability magnified the problem. Availability of demand information at store levels is hard to get. A JITD system utilizes a vendor-controlled inventory scheme to combat a distribution
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Barilla Case 1a. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits of this program? There is a large variability in demand. (GD’s and DO’s order once a week‚ in varying quantities‚ causing a bullwhip effect). This is strange‚ as the total market is relatively flat and nearly completely saturated. Because pasta is so common in Italy‚ people usually stick with their choice of brand‚ which is why demand should be stable for Barilla’s
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Ans3 JITD program created some conflicts both external (i.e. from the distributor perspective) and internal (i.e. from the sales perspective) which are explained below. JITD- Internal Conflicts JITD created some internal resistance within the organization. Sales and marketing department opposed the plan of JITD. They had many fears related to implementation of JITD. There concerns can be explained in the following ways. 1 Sales representative felt that their responsibilities would be reduced
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Homework 2 Barilla Case Reading 1.Is there any evidence that Barilla faces the bullwhip effect? If so‚ what causes of the bullwhip effect are present? Yes‚ there are some evidences that Barilla is facing the bullwhip effect. The following causes are presented as below. 1) Demanding forecast. Since safety stock‚ as well as the base-stock level‚ strongly depends on these estimates‚ the user is forced to change order quantities‚ thus increasing variability. Lead-time. It is easy to see
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Giorgia Maggiali‚ head of materials management for Barilla‚ is developing and implementing the “Just-in-Time Distribution” program across the business. It is recommended Maggiali utilize sales reps to streamline and advocate for JITD at the store level. Work Directly with Internal and External Groups to Communicate Clear Vision In order to successfully implement a change in how business is conducted in any large institution‚ like the JITD system‚ it needs to overcome resistive forces from internal
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BARILLA CASE STUDY Causes that led to the JITD idea: Fluctuating demands from the retailers and the burden it caused on the company’s manufacturing and distribution system. The problem with the fluctuating demand is during the period of high demand the manufacturer should have the capability to increase the supplies else the backlog will increase. On the other hand when the demand decreases it will be expensive to store the excess inventory. A problem at one point in the supply chain will be translated
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Barilla Case Study There are some issues currently faced by Barilla. One is that demand fluctuates extremely because distributors order weekly and it is hard to predict the demand on a weekly basis. Another is that there is a significant pressure to manufacture because lead-time and perishability of product vary so much. It’s very hard to speed up the process because each type of pasta requires specific heat and humidity level to dry them properly. In addition‚ Barilla has to make both dry
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Upon analysis of Barilla’s proposed implementation of the Just-In-Time Distribution (JITD) model‚ it appears that the JITD proposal is attempting to minimize the bullwhip effect phenomenon on the pasta manufacturer’s supply chain. The bullwhip effect is seen as one moves upstream in the supply chain from the retailer to the distributor to Barilla’s central distribution centers (CDC) to Barilla’s plants – the farther one moves upstream‚ the greater the volatility in demand. This demand fluctuation
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SUMMARY Barilla SpA‚ an Italian manufacturer and world’s largest pasta producer that sells to its retailers largely through third-party distributors‚ experienced widely fluctuating demand patterns from its distributors during the late 1980s and Barilla suffered increasing operational inefficiencies and cost penalties. Brando Vitali‚ Barilla’s ex-Director of Logistics‚ proposed a Just-In-Time Distribution (JITD) system to counter this demand variation. This system required the distributors to share
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