Barilla Spa Case Report

Executive Summary As per our conversation extend week I would equal to revisit the creative thinker originally brought to life-time by Brando Vitali before he was promoted to head wiz of our comp whatevers new divisions overseas. In swan to calculate the bulge out which pull up s examines be a direct result of introduction of JIT Distribution strategy, I would like to present the issues and my recommendations to you before our meeting with Marconis executives to discuss JITD proposal.As the meeting is schedule for the of November I would like to hear your thoughts on JITD before the end of this month so I can make appropriate miscellanys to regale any issues you efficiency fore memorize as a direct result of our proposal. The conclusion to adopt the Just-in-Time Distribution will most likely be met with our gross gross r thus farue and merchandise teams shelter to change. Our old-fashioned distribution corpse has been nurtured since the early development of our cha nnels of distribution.Promotions and advertising were key to our success of achieving a certain level of trust deep down our furnish reach some(prenominal) internally and orthogonally. I recommend a staged implementation of the JITD to take our staff to adapt to our new doctrine. Our distribution ne bothrks could become more economical rather than creation all some relation transports based on pushing the mathematical return out of our facilities. It appears that our provide Chain executives argon non aspect for ways to void waste within our distribution channels as we be non even clear on how we measure our success.Applying angle of inclination principles to our Supply Chain is misleading to our staff as they think their note security is on the line. This is met with internal resistance that drives to be channelise before we can communicate the advantages and benefits of JITD to our external distribution profits. I bank that Vitalis uprise will fit our new Supply Chain management strategy of Just-in-Time Distribution which will sanction us to ship mathematical products as needed, rather than building enormous line of descent to deal with erratic demand patterns.We need to break down the silos and secrecy of our distribution processes to our customers to rent for more efficient channels of distribution. A more transparent approach with fewer layers along the way will forego for a some(prenominal) more efficient Supply Chain. Working closely with our distributors will allow us to reduce our own stock list and manufacturing cost along the way. We withal need to consider our own forecasting systems to strengthened the trust within our channels of distribution.Scheduled monthly meeting will allow for an open intercourse between various groups that might be affected by this implementation. I cerebrate that open lines of dialogue both internally and externally will contribute to the ultimate success of JITD implementation. We wi ll withdraw to traverse issues as they come up to ensure the peace of mind of those who will be affected the most. We need to be more flexible to address problems and bottleful necks of our distributors as that would be crucial to success of JITD.The main idea we need to communicate across our Supply Chain is that JITD would allow us to sweep away waste and turn back rid of extra layers which our in the way of addressing our issue of volatile demand patters which result in stockouts. Giorgio Maggali, MBA, SCMP Director of Materials Management saltwort Fresh Products Group October 16, 2012 Barilla Spa Case Study prune Identification As the decision maker in this case I believe that the main issue presented in this case study is resistance to change.To be more specific, DOs (Organized Distributors) resistance to adopt a new Just-in-Time distribution (JITD) system which would replace the old-fashioned distribution system used by Barillas Supply Chain tralatitiously. This traditi onal distribution system has always been viewed as a successful one, as it buy the farmed for everyone within the channels of distribution egressing dry products to supermarket set ups and self-governing supermarkets. on that point was a certain level of trust achieved between the merchandising group, sales reps and buyers who are a part of the Supply Chain built virtually trade packagings.DOs expectations of frequent trade promotions were considered the only nub to cost reduction during the canvass periods where distributors were open to buy as a plentifulness product as desired to meet current and future needs. This is a well nurtured traditional system which likewisek a lot of years to develop. environmental and Root Cause Analysis Approximately 65% of Barillas dry products were supplied through outside distributors to supermarket chains and independent supermarkets who would eventually get the product into the hands of the ultimate user.Distributors would receive the ir product from one of the two Barillas central distribution centers (CDCs) where movement of product would be assessed based on its category which would be either dry or gratifying. Barilla maintained different distribution systems for its dry and fresh products due to their differences in perishability and retail service requirements. Brando Vitalis JITD proposal think solely on dry products sold through Barillas distributors who I am going to examine. There is an industry culture around the supply and demand of Barilla products.Internal and external politics are at the root cause of the resistance to change around the distribution channels. There are issues that Barilla needs to address internally before the idea of JITD can come to life externally. Barillas sales and marketing personnel have expressed a range of concerns because this new school of thought could potentially cost some staff and executives their jobs from the lav to the top of the sales organization as it is de veloped further. Sales executives are clinging to the idea of promotion based strategy which the old-fashioned distribution system is based around.This is not a good sign as efforts to reduce costs should be made from all aspects of the Supply Chain Management. Executives should be concerned with force of their supply chains from different tiers of suppliers all the way thru different tiers of their customers until the product reaches its ultimate user. Barilla executives are not looking for ways to reduce waste within their distribution channels as its not even clear how they measure success of their sales force. Barillas distribution network is only based around relationships, not necessarily around susceptibility of their supply chain.They should be looking at ways to run through waste, even if it means leaning out their sales force and only retentivity those who truly perform well. Staff will always resist change as it is uncertainty that scares everyone when new ideas are i ntroduced within an organization, especially if it might put their job security on the line. Once the internal issues are addressed and the new philosophy starts taking precedence they can efficaciously communicate JITD to their DO channels. Sales reps would be successful at communication the ideas and benefits of JITD system to the buyers of the Organized Distributors.Those buyers would then facilitate the flow of this information from the bottom to the top of the organization before a meeting can take place with Marconi and other(a) DOs. Alternatives and/or Options Giver the current situation, I believe there are only two options to consider here. First one is to remain status quo and run the risk of stockouts as the effect of displace demand which due to variation in demand leads to cost increases. The other option would be to embrace the new philosophy of JITD internally and communicate it further down the supply chain to the DOs.Brando Vitali had it right all along with the idea he referred to as Just-in-Time Distribution (JITD) which was modelled after the renowned Just-in-Time manufacturing concept. His philosophy was to consider JITD as a selling tool rather that a threat to sales. Vitalis view was that as a supply chain we should focus on demand from end user as that is the supply we trying to address at the time its required. In order to potently address the issues of fluctuating demand we need to be sufficient to respond to unexpectedly high demand from the end-consumer and the quickest way to do that would be to eliminate as many layers as possible.Additional inventories to dampen fluctuations costs money, costs of maintaining certain service levels should also be taken into consideration. or else than filling distributors demand, according to their planning department, we should be looking at distributors information directly and only send what is needed rather than supply distributors with inventory they can hold to anticipate demand swin gs. By doing so, we would be competent to improve operations for ourselves and our customers if we were responsible for determining the quantities and spoken communication schedules.This will allow us to further reduce costs as transportation could be handled by our CDCs based on sales volume variations. Recommendation and carrying into action I recommend the JITD system as it will address the stockouts issues were currently experiencing as the effect of fluctuating demand. Our distributors already carry too much inventory (see Exhibit 13) which doesnt resolve the stockouts issues were see despite the fact that they are holding a couple of weeks inventory.We should be able to improve operations for our distributors if we were allowed to be responsible for determining quantities and delivery schedules based on end users demand. This would allow us to ship product as per demand required rather than trying to manufacture stock large enough to supply both of our facilities. Furtherm ore we would be able to reduce our own distribution, inventory and manufacturing costs and pass those savings onto our customers if we didnt have to worry about volatile demand patterns.Ultimately this will work the same way it does with Barilla sales representatives assisting with setting up in-store promotions analyzing competitive information including competitors prices, stockouts and new product additions. This would be effective because no one knows our product better than we do. If our sales reps are allowed at distribution facilities, they would be able to assist, gather and exchange a lot of valuable information about our needs and those of our DOs. The more we know about each others business the better off our Supply Chain will be.The fewer layers we have, the quicker we can get our product to our ultimate customers reducing our own inventory and manufacturing costs along the way. Well have to improve our own forecasting systems of course as it is imperative to our busine ss that our distributors have that extra confidence in our abilities. Monitor and Control This test of an idea would require a lot of back and forth communication both internally and externally. Cross functional teams would be required to address issues and concerns which might arise from this sort of implementation.The whole process should be through in stages to allow staff to adapt to the changes gradually. Keeping everyone informed would be key as the only way to reassure staff and address uncertainty would be to educate them on pros on cons of the system being brought to life. Regularly scheduled monthly meetings are an absolute must to address issues as they arise. New KPIs should be clearly communicated to the sale reps. Our reps should be clear on all of the aspects of JITD implementation as they would play an serious role of facilitating the flow of information down the Supply Chain.Once DOs are up to speed on JITD, a simulation should be considered with external distribu tors to demonstrate the benefits of the new distribution system once it is implemented. Inviting DO representatives to see our manufacturing facilities and addressing their concerns with solutions would go along way on establishing rapport and strengthening relationships. look into and addressing bottle necks of our distributors with JITD would also be beneficial to everyone as our ability to eliminate wastes and get rid of extra layers would reduce costs across the Supply Chain.