Jitd Inititive at Barilla

Just-In-Time Delivery Initiative at Barilla Industries

Executive summary

Barilla is the largest manufacturer of the most common staple food in Italy, pasta. Their demand is very high in the market. With their state of art plant, they are able to manufacture and package a wide variety of products within their production lines. As with other manufacturers, Barilla is not equipped to handle huge variations in demand and hence cannot modify their production cycle readily. Even with forecasting models in place, Barilla`s distributors erratic demand for their dry pastas resulted in stock-outs or product wastage. Then, an initiative called “Just-in-time-delivery” was introduced by its director of logistics, Brando Vitali. The purpose of this new model of inventory management was to curb the disturbances caused by the fluctuating demands from its product distributors. According to this model, the distributors would provide Barilla with real time updates or data of capturing product deliveries from distributors’ warehouses to the retailors. Barilla would use this data to manufacture the required products and deliver straight to its distributor’s warehouses to meet certain stock levels. The distributors would not have to take physical inventory of its products and will not have to subsequently order the required products. However, this initiative faced many criticisms from distributors and inside staff. This paper explores the root cause of the problems and gives recommendations so that JITD model can be successfully implemented. For instance, incentives to the distributors to become a member of JITD model and modifying the bonus structure for the sales staff. Further, recommendations are made how to implement the model and monitor its success through various KPIs like cost savings etc.

Table of Contents

Executive summary………………………………………………………….2

Introduction……………………………………………………………….…4

Issue Identification and Root Cause Analysis…….………………………...5...