Case Barilla Spa (a)
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
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