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Barilla

In: Business and Management

Submitted By mcga777
Words 2394
Pages 10
Executive Summary
Demand fluctuations have created a huge burden on the company’s manufacturing and distribution system. This burden has also impacted company profitability. In order to continue as a leader in the pasta industry we need to look at our operations and improve our delivery and forecasts to meet these demand fluctuations. The overall demand for pasta is flat, and we should be able to accommodate for this within our supply chain. In order to assist and help deal with these fluctuations I recommend that we implement Just in Time Distribution (JITD) which will assist in lowering our overall inventory levels within the chain and assist us in managing demand, and improve overall company profitability. In order to implement JITD, we require management support in order for this to be successful. Issue Identification
Barilla is currently being faced with a decision on where they need to go in respects with just-in-time-distribution (JITD). They need to look at whether this type of program is feasible in their environment and if it makes sense to continue with a JITD system. In order to look at these decisions we need to review some of the issues that JITD system was intended to overcome.
Some of the issues that JITD was introduced to overcome are:
1. Demand Fluctuations – There is a high standard deviation of demand on the Barilla Dry products from week to week. (Exhibit 1)
2. Managing the Distribution System – The distribution system along the Barilla supply chain is fully autonomous, the distribution centers order based on their own agendas and pull inventory creating huge demands at times creating a bull whip effect which ultimately increases inventory throughout the supply chain.
3. Operational Inefficiencies – Although the supply chain would ultimately hold approximately 2 months of product Barilla was dealing with stock outs and changing

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