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    Barilla SpA

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    Swati Nimje
    The document discusses Barilla's Just-In-Time Direct (JITD) supply chain program. The program aimed to address issues like wild demand swings caused by the bullwhip effect. It sought to shift focus from orders to end consumer demand. Benefits included reduced inventory costs and improved production planning. Drawbacks included risk of stockouts and reduced promotions. The document concludes that targeting Barilla-run depots serving small shops first for a JITD pilot could help address distributor issues and convince them of the benefits like decreased inventories and improved fill rates.

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    Download as DOCX, PDF, TXT or read online from Scribd

    Barilla SpA

    Uploaded by

    Swati Nimje
    151 views2 pages
    The document discusses Barilla's Just-In-Time Direct (JITD) supply chain program. The program aimed to address issues like wild demand swings caused by the bullwhip effect. It sought to shift focus from orders to end consumer demand. Benefits included reduced inventory costs and improved production planning. Drawbacks included risk of stockouts and reduced promotions. The document concludes that targeting Barilla-run depots serving small shops first for a JITD pilot could help address distributor issues and convince them of the benefits like decreased inventories and improved fill rates.

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    Case analysis Barilla SpA

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    The document discusses Barilla's Just-In-Time Direct (JITD) supply chain program. The program aimed to address issues like wild demand swings caused by the bullwhip effect. It sought to shift focus from orders to end consumer demand. Benefits included reduced inventory costs and improved production planning. Drawbacks included risk of stockouts and reduced promotions. The document concludes that targeting Barilla-run depots serving small shops first for a JITD pilot could help address distributor issues and convince them of the benefits like decreased inventories and improved fill rates.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    151 views2 pages

    Barilla SpA

    Uploaded by

    Swati Nimje
    The document discusses Barilla's Just-In-Time Direct (JITD) supply chain program. The program aimed to address issues like wild demand swings caused by the bullwhip effect. It sought to shift focus from orders to end consumer demand. Benefits included reduced inventory costs and improved production planning. Drawbacks included risk of stockouts and reduced promotions. The document concludes that targeting Barilla-run depots serving small shops first for a JITD pilot could help address distributor issues and convince them of the benefits like decreased inventories and improved fill rates.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Supply Chain Management

    October 10
    Group 18
    Barilla SpA
    SATYA SHYAMALA (PGP/20/175) 9916130210
    SWATI NIMJE (PGP/20/187) 9911912331
    VAMSHI (PGP/20/304) 8500015978
    Section A
    (1) Diagnose the underlying causes of difficulties that the JITD program was designed to solve.
    What are the benefits and drawbacks of this program?
    Major issues the JITD program was expected to address were:

    Due to bullwhip effect, minor changes in end consumer demand at retailer end was causing
    wild swings in order quantities for Barilla.
    Shift of focus from orders as the input filter to the demand from the end consumer.
    Barillas CDC had to serve orders with extreme demand variability with a COV of ~ 0.75. This
    strained the manufacturing and logistics operations.
    Benefits of JITD:

    Barilla can aggregate the demand from all its distributors and the production scheduling could
    be planned accordingly instead of relying upon the highly variable orders from individual
    distributors.
    Reduced inventory levels at the distribution centres leading to lower inventory holding costs.
    Thus, even if Barilla withdraws volume discounts, the costs for the distributors would still be
    low.
    Distributors would be more dependent on Barilla which would naturally improve Barillas
    relation with them due to increased supplier power.
    Planned production planning to reduce overall cost of manufacturing.
    Drawbacks of JITD:

    Risk of stock out of products in case of disruptions in the supply process.


    Losing the distributor shelf-space to competition due to reduced inventory levels in the
    distributors warehouses.
    Inability run trade promotions (in the form of volume discounts to distributors). Thus, reduced
    incentive for distributors to push Barillas products.

    (2) In the environment detailed in the case, is JITD feasible? If yes, which customers would you
    target next? How would you convince them that it is worth trying?
    Yes, the implementation of JITD is feasible if Barilla can first address the issues of the distributors
    which was proving to be a hindrance for its implementation.
    The Barilla-run depots, serving Signora Maria shops must be targeted first. They stock more SKUs
    and have lower buyer power and are more scattered compared to those of chain supermarkets.
    Moreover, it is easy for GDs to aggregate the demand from all their stores before ordering to reduce
    their costs. But it is from the small independent shops that Barilla faces highly volatile demand as
    they purchase products from brokers who dealt with Barilla purchasing and distribution personnel.
    Convincing the distributors:

    Speak to the distributor on importance of JITD and how it will decrease the inventories and
    improve their fill rate to their stores.
    Spread awareness among distributors about better CSL when JITD is adopted.
    Provide an in-house pilots of the JITD and explain the distributor of its benefits. (Similar to
    what Toyotas JIT implementation approach).

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