The second issue in implementation process was the resistance of the distributors.Grace Inc. Barilla has been experiencing large amounts of variability in demand which are resulting in operational inefficiencies and increased manufacturing, inventory and distribution costs. It is currently known as the biggest pasta manufacturer in the world and owns 25 plants throughout Italy. However, Maggiali tightly supports this idea. Avoid Multiple Demand Forecast Updates — To avoid this demand forecast updates from one site to another and to bypass the repetitive processing of data, both sides of the supply chain should be unify their efforts in using the same raw data in the same system. If Giorgio were to implement JITD to control the demand fluctuations, there would be several issues he would need to address. In order to reduce the Bullwhip effect being experienced by Barilla, their supply chain would have to be Centralized. In what ways is this analysis approximate? The distributors were offered volume discounts for making a full truckload or multiple truckload order. How would you proceed? The variability in demand when each member of the supply chain exercises the same process to account for its own safety stock causes a colossal increase in levels of inventory stock at each level and thereby consequently incurs higher costs. On the other hand if am a big retailer the JITD program would help me reduce my overhead that comes from keeping a weeks of supply from Barilla in my store, and if there are any time gaps between when product is out and when new comes in I can use the shelf to move other quick turnaround products.
To support increasing demand, a huge investment in manufacturing plant drove the company into debt. With the sales information of its distributers unknown, Barilla faces many conflicts to forecast the demand for its products and plan accordingly. This method was initially used in an attempt to reduce costs; however, it is serving contrary.The business value is a direct result of increased information flow: Improved Inventory Turns. The cost results from the pilot program and simulation exercises should be dispersed to the distributors. Thus, manufacturing and distribution costs are increasing, and the company is being agonized by the customer order fill rate. The has company differentiated itself from fierce competition of manufacturers in Italy through innovative marketing techniques and quality. The first strategy aimed at setting a specific set of promotions on a specific variety of products that would last for the length of that period or just long enough to reach target sales per canvass period. I would cancel the whole JITD program all together. This result is commonly referred to as the bullwhip effect. By following the suggestions made in the plan of action, Barilla will succeed in influencing its distributors and Sales personnel to work together and implement the JITD program, which will produce better performance in terms of time and money but will also promote trust and good relations among all the associates in the supply chain. To solve this issue, Maggiali must come up with a decision on whether he should proceed with the JITD strategy or not, and what is the best way to implement it in for Barilla SpA. Although all the distributors have a computer-supported system, a complex forecasting system or analytical tools for indicating order amounts is only present in a few. In order to convince the internal staff and sales force, Barilla should run pilot program which would run 6 months.
They are influential in forecasting since they spent most of their time helping distributors place orders and examine competitors' information. It is currently known as the biggest pasta manufacturer in the world and owns 25 plants throughout Italy.
Since these are legitimate concerns and a very possible outcome if JITD is implemented, from my opinion there are only two options either retrain all the employees that would be affected in a different positions or get rid of the JITD program all together and if it was up to me I would scrub the whole program all together.
Currently in the system, after the products are produced, they are sorted into two different categories, the fresh and the dry, which are then delivered to the central distribution centers CDCs.