Barilla (a) Pasta Distribution

Barilla is facing issues with wrong inventory at wrong locations and inflexible manufacturing process failing to respond the fluctuating market demands quickly. In an effort to respond to fairly complex market and distribution network, Barilla’s logistic department is proposing a new method to distribute the product called Just in Time Distribution.

At a high level JITD is Barilla’s attempt to manage and respond to the demand up to the distribution level. Under JITD program, Barilla would collect information daily from the distributors on the SKU’s those are either on hand with the distributors or shipped to the retailers. Based on the information collected, Barilla would make the replenishment decisions for the distributors and provide them with the type and quantity of the products that Barilla forecasted.

From Barilla’s perspective, the JITD program will bring in effective planning for production lines those are inflexible to respond to fluctuating demands. In addition, it will lower inventory throughout the supply chain and provide inputs to a better forecast. However this program would also mean many policies and practices in other departments such as sales and marketing have to be changed to accommodate the new flow of information. Sales team, which closely works with the distributors (except Grande Distribuzione) are now have to change their processes which are not explained in the case. Marketing programs will be impacted since the discounting methods will now have to revamp because with JITD, distributors are no longer pulling the inventory anymore. Logistics department’s plan seems to overlook the needs of the sales and marketing which naturally would bring in resistance to the plan.

Distributors are facing frequent stock outs and poor service levels as case explains. Even then the distributors, who are accustomed with traditional ways of doing business, are reluctant to change. Distributors are used to the discount programs that have immediate impact...