Barilla Case

In: Business and Management

Submitted By Shersho
Words 1976
Pages 8
Executive Summary
Barilla and its distributors have decided to implement the Just-in-Time Distribution (JITD) approach. This will require a vendor relationship between Barilla and its distributors and investment in sharing information from its customers and the inventory on hand in the distributors’ warehouse. Because of Barilla’s poor performance caused by shortages it is imperative that JITD is implemented in a proper manner that emphasizes the short term and long term gains that Barilla and its supply chain will have. Although most of the implementation can occur in a short period of time, in order for the supply chain to truly be successful, there must be long term investment for the vendor relationship and relationship with its internal members to truly be effective and successful.

Issue Identification
The following are a list of issues that must be addressed: * Distribution System * Extreme demand fluctuations * Distributor resistance * Internal resistance
Issue Identification including Root Cause Analysis
Distribution system
Barilla has employed two main approaches to meet the end users’ needs. Barilla carries extra inventory in its factories in anticipation of any large pulls from its customer because it can’t produce product fast enough within the constraints of its production facilities. However, holding extra inventory is extremely expensive because there is no predictability in demand.
Second, in order to minimize its inventory carrying costs, Barilla’s distributors also carry additional inventory with as much as 1450 Quintals, when the average demand is no more than 500 Quintals.
Extreme demand fluctuations
There are four main reasons why Barilla’s demand fluctuates. Barilla offers incentives to increase demand through promotional sales, transportation and volume discounts to its distributors. In each ‘canvass’ period, a…...

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