Case Barilla Spa (a)

Topics: Inventory, Supply chain management, Supply chain Pages: 5 (1345 words) Published: July 12, 2012
Case Barilla SpA (A)
Discussion Question
1. Answer these questions about the Barilla case study;
a. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits of this program? The main underlying cause of the difficulties that the JITD program was created to solve is the effect of fluctuating demand which can be divided the root causes as per below. * Transportation Discounts

* Volume Discounts
* Promotional Activities
* No minimum or maximum order quantities
* Product Proliferation
* Long order lead times
* Lack of forecasting systems or sophisticated analytical tools at Distributer’s end The JITD program is beneficial both of Manufacturer and Distributors. The expected benefits of JITD for manufacturers are; * Reduced manufacturing cost

* Better Relationship with Distributors
* Increase supply chain visibility
* Increase distributor’s dependence on Barilla
* Improvement in manufacturing planning
* Reduced inventory levels
The expected benefits of JITD for manufacturers are;
* Improve Fill Rates to Retail stores
* Additional service without any extra cost
* Reduces Inventory Holding costs
b. What conflicts or barriers internal to Barilla does the JITD program create? What causes these conflicts? As Giorgio Maggiali, how would you deal with this? According to the case study, we can summarize the internal resistances as per below: * Sales Representatives feared reduction in responsibilities * Flattened sales levels

* Risk of Inability to adjust shipments quickly to stock-outs * Lack of infrastructure to handle JITD
* Increase competitor shelf space at distributor
* Inability to run Trade promotions
* Unsure about the cost benefits
These conflicts occurred because sales representatives do not have enough understanding about the JITD program. Thus, there is resistance from internal for this change. To deal with this problem, firstly Maggialli should look at the JITD not as a logistics program, but as a company-wide effort. Secondly, he should get top management closely involved in this project so that other functions would be more focusing on this project as well. Moreover, he should be able to demonstrate the JITD benefits in company’s perspective, distributors’ perspective, retailers’ perspective and contribution to the whole supply chain so that every parties can understand the cost benefit of the JITD. To solve the resistance of sales and marketing team, Maggialli can make internal parties more understanding about this project by explaining the step of implementation and the JITD process. For example, he should explain to sales representatives that they still pay crucial role after the company implements this program. They can have power to control their shipments, increase sales level, adjust shipments to stock out quickly and be able to run trade promotion as usual by providing the forecast which help company grow sustainably. Furthermore, company can increase the number of SKUs since distributors have more shelf space to hold our products. Last but not least, trust is the most important thing for the JITD. Maggialli should demonstrate the trustworthiness of the JITD so that everyone can confident with it. c. As one of Barilla’s customers, what would your response to JITD be? Why? The discussion is needed between both parties. This can bring the win-win solution. Two heads is always better than one so the critic side could be replaced with another disguised one. As a customer, we will give the company a chance to explain both the benefits and the drawbacks in order to weight which side has more effect on us. In the other hand, the company should demonstrate what we will get and if we feel that we lose something, it is the company responsibility to offer the negotiation or trade-off deal. Finally, they might find the optimization that meets both sides’...
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