Jitd barilla. [Solved] If you were a DC or a retailer would you respond favorably to the 2023-01-04
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JITD, or Just-in-Time Delivery, is a logistics and supply chain management strategy that aims to minimize inventory levels by delivering goods to customers as close to the time of need as possible. This approach is often contrasted with traditional "just-in-case" inventory management, where companies keep large amounts of inventory on hand to ensure that they can meet customer demand at all times.
One company that has implemented JITD successfully is Barilla, an Italian pasta manufacturer. In the 1980s, Barilla struggled with significant inefficiencies in its supply chain, leading to high inventory levels and frequent stock-outs at its retail customers. In response, the company adopted a JITD approach, working closely with its customers to better understand their demand patterns and adjusting production and delivery schedules accordingly.
One key element of Barilla's JITD strategy is the use of an advanced computer system to track and forecast demand, as well as optimize production and delivery schedules. This allows the company to quickly respond to changes in customer demand and avoid overproduction and excess inventory.
In addition to improving efficiency and reducing costs, JITD has also helped Barilla to improve customer satisfaction by ensuring that products are available when and where they are needed. This has helped the company to maintain strong relationships with its retail partners and drive sales growth.
Overall, Barilla's successful implementation of JITD has demonstrated the benefits of this approach for both the company and its customers. By aligning production and delivery more closely with actual demand, companies can reduce waste and improve efficiency, while also meeting the needs of their customers more effectively.
Barilla Case: Causes of Fluctuation
Following is the quantitative analysis of implementing a Just In Time Distribution JITD system through a cross-docking process at the CDC level please see the accompanying spreadsheet for detailed metrics : 1. Barilla sometimes over or under-react to demand expectations producing too much or less inventory. Distributors will provide actual sales data which will be the basis of forecasting and production thus increasing in efficiency in operation and alleviating stock out among distributors. A DC or even a retailer is not very likely to respond in favor of the JITD program because of the resistance to change. Even with a high inventory levels, Barilla is still not able to cope with the fluctuating demand. The safety stock is 2700 and is owned by the DOs as well.
The goal for Barilla, while implementing this new strategy is to implement JITD within Barilla and at its customers. The effects of the trade promotions and the quantity discounts are twofold. Who should have the decision rights? Barilla needs to make use of its strong marketing position to spread the new strategy that will replace the promotion-based strategy and to retain customer satisfaction. All distribution centers, supermarkets and small grocery stores keep a safety stock to avoid stock outs. The forecast will be more accurate as well. The retooling of machines to make quick batch changes can make Barilla factories much more flexible to the variance in consumer demand.
What are the underlying drivers of the fluctuation we see in this exhibit? So it might become the cause of demand fluctuation for next time. This would benefit the retailers who will have more profitable products sitting on their shelf-space, and at the same time reduce the setup, materials costs, and batch varieties at Barilla. Exhibit 12 in the case shows how volatile the ordering could be. Key Problem s and the Causes The primary problem for Barilla involves increasing fluctuations in demand that have strained manufacturing and logistics operations. Giovanni Alessi Research Paper In 1921, Giovanni Alessi and his brother began the Fratelli Alessi Omegna Alessi Brothers Omegna , otherwise known as the FAO engineering workshop in Omegna, northern Italy. The supply chain partners can spend more time selling the products at higher profit margins. I would, however, force them to sign a third-party proprietary agreement before handing over my demand and sales data.
Internal and External Conflicts JITD Program Essay Example
JIT create a more simple practice of quality control. Communication and transparency here is the critical success factor. And even more challenging issue will be, one week there is over demand, and the other week with very low demand, there are no ways for Barilla to get enough trucks to handle the peak, and also too costly when there is low demand. This problem could be solved by using barcode scanners which are directly attached to the ordering system of Barilla, or to the cash registers at the supermarkets. Distributor takes that demand pattern into account while ordering their demand. Just In Time Distribution is a unique idea that the logistics director wanted to implement at Barilla.
NPV: Barilla SpA (D): JITD Problem Resolution Net Present Value Case Analysis
Some problems to execute such a plan include getting the corporate go ahead on revised incentives plans to internal sales and marketing departments as well as the supply chain participants. As Giorgio Maggiali, how would you deal with these? There are increased inventory holding costs. By nature, their pasta products experience waves of high and low demand. In order to optimize its product portfolio, Barilla needs to rationalize the tail SKUs with low margin and allocate marketing resources to value-added activities. In fact, just one of its factories, the Pedrignano plant, is capable of producing 900,000 kilos of pasta a day. The pipeline stock that DO owns between CDC and DO is 280 units. As a customer of Barilla and distributor of their product, I would greatly appreciate the service that Barilla has offered to provide because I would see the opportunity that this proposed plan has the potential to offer.
The government supports the small shops more than the larger supermarkets. It increased shelf space for distributors: the improved delivery schedules will lead to a decreased inventory. Besides, they can help distributors to provide feedback to development managers. What causes these conflicts? Support organizations within Barilla met the JITD proposal with resistance. This will help the company to have an upper hand in terms of competitive position and will also contribute towards the development of the company and the distributors.
By doing so, Barilla would have many reliable long-term orders. First, retailers tend to stock up inventory when the price of a certain Barilla product is low, a phenomenon also known as forward buying. Availability of demand information at store levels is hard to get. Distribution can be more efficient as the delivery is not based on the order from distributors. JIT forces a company to focus on production and as a result creates a more efficient and better quality throughput in a production line.
What causes these conflicts? Barilla can have a pilot run on the DO Distribuzione Organizzata where sales representatives functions are dominant, sales representatives are one of the key factors on the success of JITD implementation. Because of the highly specialized manufacturing parameters that were required to produce Barilla products, inflexible production lines did not allow for meeting demand that changes often. For many years, the pasta shop experienced significant growth and also their fair share of down side. What are the benefits of this program? Barilla can better utilize and arrange the distribution team by planning a more efficient route and schedule to deliver the require product to each distributor on time. This new system, contrary to current system Barilla has will eliminate Bullwhip effect and stock outs by having centralized information, there will be data transparency between Barilla and distributors. When the projects start running, they should continue to monitor the situation, and look at issue that can be improved. The fluctuations in demand have caused Barilla SpA's manufacturing costs, inventory costs, and distribution costs to go up.
There will be a champion to function as ambassador of the JITD. After that, it takes typically 1-2 days before the distributor has delivered the order at the supermarket. They do not want to take any risk to improve the whole supply chain as they are uncertain about the result and they may even be replaced by the new system. The case states that supermarkets carried an average of 4,800 dry-product SKUs and held the products for 10-12 days. Sales and marketing department opposed the plan of JITD. For the marketing department, the JITD project will lead to a redirection of its resources to key areas, such as new product launches, building brand equity, customer segmentation and differentiation.
What conflicts or barriers internal to Barilla does the JITD program create? How JITD can lower costs is not clear. Another is when stockout happen, the distributor will place urgent order to Barilla and request a quick delivery of the products. Trust will be built by having an open and regular dialogue across the supply chain, with transparency in the information sharing. The distributors place orders weekly, thus, creating variations in demand. As Giorgio Maggiali, how would you deal with these? Barilla owns the Pipeline Stock of 4000 units. This way, each stage of the supply chain can use actual customer demand data to create more accurate sales forecasts rather than relying on the orders received from the previous stage, which vary significantly more than the actual customer demand. But it is impacted by customer behavior.
