De Havilland

Statement of Issue

The main issue to be addressed is how to effectively implement the Just-in-Time Distribution module. This is important, because it would resolve the issue of fluctuating demand. We would also be able to reduce stock outs, which averaged at approximately 7% last year. To effectively accomplish this I will focus on our Signora Maria Shops, located in Northern Italy as a pilot.

Our customers are changing and they will expect us to change with them. We will be able to provide product as needed as opposed to over or under filling their display shelves.

Internally I expect resistance from our marketing and sale teams. I propose we still continue our promotions but we will limit purchasing amounts to stabilize fluctuations. We will utilize our Broker relationships with our retailers to gain first hand knowledge of our customer needs. Our customers are our number one priority and our Brokers will be our lifeline to identify our customer needs.

Criteria

In this case, a successful JITD would result in a decrease in distribution, inventory, and manufacturing costs.

I am focusing on these small independent shops because right now they typically hold the maximum shelf life of over 2 weeks inventory. To me a successful JITD would include reducing inventory to one week at the store level which in turn would provide them with fresher product.

Signora Maria Shops are facing mounting pressures due to the increased number of licenses given to the larger supermarkets. The JITD will increase profit margins allowing them to be more competitive.

Analysis

My decision to implement the JITD module will improve communication within the supply chain, correct volatility within production demands, stabilize inventory levels, and meet the needs of our customer.

Our number one tool in improving communication through our supply chain is to implement a barcode system within a selected few retailers. This will give us data to improve forecasting. I will...