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  • Barilla SpA Case

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    Bhavik Mehta
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    The document discusses Barilla's proposal to implement a Just-In-Time Distribution (JITD) system to address issues with demand fluctuation that were causing inefficiencies in production, distribution, and inventory costs. It identifies causes of demand fluctuation such as promotions, volume discounts, and lack of constraints on order quantities or sizes. Implementing JITD would involve coordination between Barilla, suppliers, customers, and distributors to jointly optimize the supply chain rather than each party optimizing separately. Challenges to implementing JITD include determining decision rights, information sharing, and addressing causes of previous problems like discounts, promotions, and other policies.

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    The document discusses Barilla's proposal to implement a Just-In-Time Distribution (JITD) system to address issues with demand fluctuation that were causing inefficiencies in production, distribution, and inventory costs. It identifies causes of demand fluctuation such as promotions, volume discounts, and lack of constraints on order quantities or sizes. Implementing JITD would involve coordination between Barilla, suppliers, customers, and distributors to jointly optimize the supply chain rather than each party optimizing separately. Challenges to implementing JITD include determining decision rights, information sharing, and addressing causes of previous problems like discounts, promotions, and other policies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    97 views7 pages

    Barilla SpA Case

    Uploaded by

    Bhavik Mehta
    The document discusses Barilla's proposal to implement a Just-In-Time Distribution (JITD) system to address issues with demand fluctuation that were causing inefficiencies in production, distribution, and inventory costs. It identifies causes of demand fluctuation such as promotions, volume discounts, and lack of constraints on order quantities or sizes. Implementing JITD would involve coordination between Barilla, suppliers, customers, and distributors to jointly optimize the supply chain rather than each party optimizing separately. Challenges to implementing JITD include determining decision rights, information sharing, and addressing causes of previous problems like discounts, promotions, and other policies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Barilla SpA Case

    OPIM 5110

    Evaluation of JITD Proposal


    Why should this work? What are the underlying economics? Who will Benefit? Coordination Concept:
    Sequential, Myopic optimization
    Supplier Customer

    Joint Optimization
    Supplier Customer

    Amplification of Orders Placed on Suppliers


    Barilla Plant Barilla DC Distributor Retailer Consumer

    Causes and Cost of Demand Fluctuation


    Causes of Fluctuation Poor Communication Promotions Volume Discounts Lead Times Number of SKUs Sales Compensation Stockouts No volume Constraints Cost of Fluctuation Production Inefficient Finished Goods Inventory Distribution Inefficiency
    Workers Equipment Trucks

    Complexity Distributor Inventory

    JITD Implementation problems


    Causes External Action Perspective

    Internal

    Perspective
    Distributors Barillas

    Who should have decision rights? Type of Information to be transferred Size Capability Geography

    Causes of Problems
    Transportation discounts Volume discounts Promotional activities No minimum or maximum order quantities Product proliferation Long lead time Poor customer service rates Sales compensation system

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