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Barilla Barilla SpA, an Italian pasta manufacturer is experiencing problems in manufacturing and distribution systems caused by fluctuations in demand. Although Maggiali has been trying to convince his consumers that the JITD would definitely work, he has not made much progress.
Now Maggiali is looking for possible solutions of the problem. In the following analysis we will provide recommendations, which will help Barilla to successfully implement the JITD system and thus decrease its costs, increase efficiencies and its profits.
From a small shop in Palma, Italy, it became a large, vertically integrated corporation with mills, plants and factories located throughout the Italy. The company was sold to Grace Inc. The implementation of Just in Time Distribution would allow for a more efficient process for getting the products to the end user when and where they are needed.
To implement Just in Time Distribution. For this to succeed, Mr. Maggiali as the director of logistics for Barilla will need to be personally and intimately involved and partner with Mr.
DiMaria who is in charge of sales for Barilla and to obtain the support from their own sales reps. Barilla will need to pull the sales reps in for training on how implementing JITD would benefit their accounts, Barilla SpA and themselves.
Barilla would more easily be able to control their manufacturing process and greatly reduce production overruns and stock outs thus enable to pass cost savings onto their distributors.
Resistance from the distributors to change may continue. Will incur costs to purchase or develop software needed to gather and correlate sales information. The initial cost for software development will be offset by savings in lost sales opportunity, reductions in buybacks and an overall increase in productivity and sales.
Barilla already has much of the needed data pertaining to sales to the distributers. Customers may be resistant to providing their sales and customer base data to Barilla.
Barilla Sp… Company Overview Barilla Spa is a large vertically integrated family owned largest pasta producer in Italy.
Its operations are divided into seven divisions: Barilla products were sold through three types of retail outlet: Products were sold through CDCs and through intermediate distribution channels.
Fresh products were sold through a network of brokers. Inventory levels in the supply were high with larger levels of stock held for dry pasta since its shelf life was high as compared to wet pasta.
Barilla enjoyed a strong brand image in Italy. Its marketing and sales strategy was based upon a combination of advertising and promotions. Also distributors can buy as much product as they want to for meeting their demand at the discount offered by the company.
Barilla produced two major kinds of products: They had long shelf lives of months or medium shelf lives of weeks depending on the product type. Issues Faced The company was suffering from the following problems: Variability in demand- This lead to operational inefficiencies on the part of the company.
Inventory Management- The company produced over SKUs, most of which had long or medium shelf lives, thus could be easily stored up at the company warehouse or with the distributors. During periods of low demand, high inventory holding costs had to be incurred.
Stock outs- This was one of the major problems which Barilla faced.
Many of the distributors were not able to cater to the demands of the retailers during times of high demand.Transcript of Barilla Supply Chain: Communication in Strategic and Operational Phases - Barilla is a multinational Italian company founded in - Barilla offers products for every occasion, exported to more than countries.
Barilla firmly believes that the efficiency in agriculture is the essential starting point in the development of a sustainable supply chain.
This ensures competitiveness to all players in the sector, while improving the social, environmental and economic impacts. Barilla case report – by Yasser Hammoud Part 1: Executive Summary After having full exposure to Barilla’s current production and distribution infrastructure, I instantly became aware of the uncertainties and risks that the company is facing and will continue to face in the future.
System boundaries include all activities from durum wheat cultivation to transportation of products to the main distribution centres (see Fig.
3). The cooking phase was accounted for under average conditions since it is strictly dependent on the behaviour and habits of consumers. One of the underlying causes of the difficulties that the JITD program was created to solve was the effects of inconsistent demand that came from Barilla’s distributors.
The extreme demand variation strained Barillas manufacturing and logistics, and made very hard for Barilla to meet that demand. Barilla’s Just-in-Time-Distribution Program - Case Report I. Part 1: Executive Summary Barilla, the word’s largest pasta producer, is confronting with huge fluctuation on its production because the production is dictated by distributors’ orders.