Q.

How did high demand variability affect Barilla and the rest of the supply
chain? What conflicts or barriers internal to Barilla does the JITD program
create? What causes these conflicts? As Giorgio Maggiali, how would you deal
with these conflicts?

1. Inaccurate to provide fast response to customers.

2. Weekly demand fluctuation makes forecasting more difficult and less accurate.
3. Holding sufficient finished goods inventories was extremely expensive.
4. Both manufacturers and retailers were suffering from thinning margins.

Conflicts to JITD program:

1. Sales department was concerned that sales figures would be reduced due to
flattened demand.
2. Warehouses without full of products would face more competitions and unable
to adjust shipments or promotions.
3. The risk of stock out would increase.
4. The fewer products keep in distributors, the more inventories that Barilla
should own, which increase cost and affect manufacturing flexibility.

Causes of these conflicts:

The causes of these conflicts are the lack of sufficient flexibility in production,
and the reward structure for sales representatives.

Dealing with these conflicts:

1. Convince his boss to implement this proposal.

2. Convince distributors and build up a long-term strategic cooperation to
improve accuracy of forecast data.
3. Establish a reward structure, which can be related to reduction in inventory
or accurate data analysis from forecasting, for sales department.