What do you think are the main causes for large fluctuations in orders observed at the Pedrignano CDC? These trade promotions create incentive conflicts by causing customers to purchase in quantities that do not reflect their immediate needs forward buying but instead focus their stocking decisions on acquisition price. Normal reordering does not happen until the product has either been depleted to the normal reorder point or another pricing incentive has been offered.
See the attached file. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program? What causes these conflicts? As Giorgio Maggiali, how would you deal with these?
If so, which customer would you target next? How would you convince them that the JITD program was worth trying?
In general, if one party is to make the inventory replenishment decisions for the system, who should it be?
Why is it Barilla who is making the decision? To see the case study, go to the web site below: Hope this will help. The JITD initiative at Barrila drew a lot of internal and external objections, which made it unsuccessful in terms of implementation.
The JITD idea as an attempt to solve the traditional problems within the uncertainties-affected supply chain is commendable. Possible solutions corresponding to different aspects of problems are discussed along with the problem analysis. Finally, a stakeholder consortium based on a real-time vendor managed inventory system is suggested.
Barilla faced a wild demand fluctuation that made them hard to control the inventory and has a low order fill rate.
The amplification of demand fluctuation along the upper stream of the supply chain is known as bullwhip effect. The reasons of causing the bullwhip effect in the Barilla case are as following 1.
The demand variability is huge but the production line of Barilla cannot afford frequent changes in order amount due to the long setup process. The Barilla customers will face stock out due to the low fill rate of Barilla. High Inventory at distributors and No Space or further investment available: The distributors have huge inventory and stock outs rate, which indicates that new product keeps coming out while old products still keep their spaces.
The centralized inventory control provide the following benefit: JITD helps to reduce inventory held at the distributors since it builds inventories at the central warehouses and then delivers only the quantities required by the end-users through checking inventory at the distributors more frequently.
Theoretically, it eliminates the needs for each distributor to hold it own "Safety Buffer" which causes demand fluctuation. Therefore, it benefits the distributors through releasing their inventories space and cost. Actually, the distributors will be more competitive to react to the demand variability, such as, new product, after season stock, etc.
Enables Barilla to monitor the true daily demand. Eliminates the demand variation caused by batch ordering. Aggregates demands from all distributors and offset the demand changes of different market places.
Better forecasting the truly demand.
Solution Summary This posting provides detailed analysis of the Barilla Spa, a company trying to solve a supply chain problem. It discusses issues such as poor forecast capabilities, batch order, lead-time, price variations and level of inventory. Implementing a good JIT program could solve bullwhip faced by the barilla.
The solution discuss in details what are the benefits and disadvantages of such an approach and deals in detail with the specific problems in the case.Internal resistance to the JITD program came from the Sales & Marketing teams.
One Barilla sales executive explained in Hammond () how they sold to a . Barilla Spa (A) Case Questions 1. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program?
2. What conflicts or barriers internal to. The most important issue Barilla faces is the variability in distributor’s demand or order patterns even though consumer demand is relatively stable - Barilla SpA Essay introduction.
To date, implementation of the Just in Time Distribution System (JITD) has not been successful. Barilla Case 1. What are the underlying causes of the difficulties that the JITD program was created to solve?
JITD was created to solve the problems of a) effects of fluctuating demand (Bullwhip. Barilla SpA (A) Case Study Analysis 2 Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawback of this program?
Barilla Spa Case Study Barilla SpA (Barilla), is an Italian largest pasta manufacturer in the world manufacturer that sells pasta to retailers largely through third-party distributors. Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company.