4 compelling reasons why CybSec is important in SA:

A] South Africa has the third most cybercrime victims worldwide, losing R2.2
billion a year: (ref: https://www.accenture.com/za-en/insights/security/cyberthreat-
south-africa, MAY 27, 2020)

 Increase in smartphone users & internet infrastructure brings with it a higher

chance of data security attacks & opportunity for cyber threat actors.
 100 % increase in mobile banking application fraud; 22 % malware attacks in South
Africa in the first quarter of 2019 compared to the first quarter of 2018
 Historically there’s been low investment in cyber security & developing cybercrime
legislation framework in SA

B] Ransomware attacks in Johannesburg: (ref: https://www.thesslstore.com/blog/cyber-

attacks-hit-the-city-of-johannesburg-and-south-african-banks/)

 On October 24th 2020, Joburg announced that their network had been breached by
hackers, resulting in unauthorised access to its information systems.
 It was a ransomware attack carefully “timed to coincide with all City month end
processes affecting both supplier payments and customer payments.”

C] Related incidents of data security attacks(ref:

https://www.accenture.com/_acnmedia/PDF-125/Accenture-Insight-Into-The-Threat-
Landscape-Of-South-Africa-V5.pdf)

 In October, several South African banks suffered DDoS attacks, resulting in loss of
service.
 Garmin South Africa disclosed that sensitive customer payment data entered into its
shopping portal, shop. garmin.co.za, had been stolen.

 The United Nations announced an investigation into 35 instances in 17 countries in

which North Korean threat actors used cyber-attacks to illegally raise funds. These
incidents took the form of attacks through the Society for Worldwide Interbank
Financial Telecommunication (SWIFT) system which is used to transfer money
between banks; the theft of cryptocurrency by attacking users; and its mining.

D]Financial Services industry is one of the most vulnerable to cyber attacks(ref:

https://www.securit.biz/en/blog/key-industries-most-vulnerable-to-cyber-attacks)

BARILLA Case soln:

QUESTION 1
The bullwhip effect is basically the fluctuation or distortion in the information
that is supplied within a supply chain. In the case of Barilla, the demand for
Barilla’s products was fluctuating and the demand variation was very high from
the side of the customers. Apart from that, the promotional activities of Barilla
and the changing prices of its products also caused the bullwhip effects along
the supply chain. The lead times were very high.

barilla spa case solution

Apart from that, the compensation that was being provided to the sales
representatives was based on the number of products they sold to the
distributors. Therefore, during the peak promotional periods, these sales
personnel pushed the stock towards the distributors to increase their revenue. ,
the manufacturing costs of Barilla increased dramatically to meet the fluctuating
demand and to cope up with it, the maintenance and labor costs were
increasing due to problems in managing the company’s resources and the most
important this all increased the transportation costs for the company. The
company had to supply the products through more trucks and at a short period
of time. The accumulation of all these problems resulted in high levels of
finished goods inventory being held by the company. It was calculated that in a
single week there were stock outs of around 5.5% or even more than this. This
all resulted in bullwhip effect which led to customer dissatisfaction, low
fulfillment rate and poor service level.
QUESTION 2
The JITD approach has many advantages and will cater many benefits to Barilla
by improving its performance. The collaborative planning between the
distributors and the company in the form of a team will help them to resolve the
bull whip effects in the whole supply chain. Barilla will have to forecast the
demand of its consumers under this system. It could make use of market
surveys or interact with customers on a one-on-one basis. This would reduce the
uncertainty regarding the variations in demand of the product. The company will
then forecast the demand of all of its distributors and aggregate that demand. In
this way the company can better manage and meet the needs of its all
distributors and customer. The production planning of the company will be
improved and the company can leverage on process improvements to increase
its profit margins also. The level of inventory held by the company will be
reduced which in turn would reduce the overall carrying cost of the company
and also reduce the risks related to product perish ability. Apart from this the
current demand system of the company is push-based which will be
transformed to a pull-based system after the JITD system is introduced.
Ultimately the stock outs and the backorders would be reduced, thus increasing
the customer service level and satisfaction.
QUESTION 3
The demand for the company’s products had been growing and there was
significant variation in the demand for the company’s products. The distributors
were unable to predict the right sizes, they simply wanted to avail the discounts
by buying bulk quantities to fill up their shelf spaces. Apart from that, the
management of Barilla also faced difficulties to produce goods when they
received immediate orders and this also resulted in higher transportation costs
for them because the goods had to be delivered quickly. Currently the
distributors are ordering the goods themselves, however, they are not
demanding according to predicted demands which led to stock outs.
The company cannot teach them that how to forecast demand, because if they
do so, they will lose control over the ordering function. Apart from that, the
company will have detailed information regarding its customers and it would be
better off in forecasting the right customer demand.
QUESTION 4
The demand variability is very high in this industry and if the continuous
replenishment program is implemented the business could face the situation of
stock outs which would increase the costs of the business. Therefore, it is very
risky to go for this partnership. However, on the other hand the company can
motivate and energize its distributors to sell the company’s products to its
customers by providing them different benefits and incentives. Barilla needs to
work on its part to forecast the right quantities so that the risk of stock outs is
minimized. LEGO has always emphasized on the desired benefits and attributes
of its customers. It had formed a strong bond with LEGO. The departments of
LEGO are all centralized and these all departments interact directly with the end
consumers. LEGO had also segmented its customers into different groups based
on their different needs. The business strategy of LEGO focuses on maintaining
long term relationships with customers and this led it to build a trusted
partnership with its customers.

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