Barilla

Session 5 – Forum Discussion

PART A

Barilla the world’s largest pasta producer was facing the bullwhip effect. The main reason was fluctuating demand which affected their manufacturing and distribution process. Thinking that by implementing JTID they can overcome the bullwhip effect, backfired their decision. Considering the period of 1990’s, Vitali’s proposal was innovative with great vision. Since Barilla’s internal resistance was more significant, it would be hard to sell the concept for external customers like Distributors. JTID had some competitive advantage which contributed for two thirds of Barilla’s business division for Dry products. It is clearly seen that collection of data from each distributor is highly impossible as they fear that Barilla would control their replenishment of stocks. Though the new system will improve the relationship within Barilla and distributors, it was trying to focus more on Barilla’s Manufacturing and distribution to meet demand and supply. At the same time, all promotions were cut-off, control over their replenishments, and sharing vital data for forecasting.

PART B

1. Underlying Causes, Benefits and Drawback of JTID

The reason JTID was suggested by Vitali is improve the process of Manufacturing and distribution to overcome the high variability in Demand and Supply. Program provided more leverage to Barilla to manufacture pasta products in an efficient way, rather it gave little advantage over their distributors considering the loss of trade promotions, volume discounts etc. Also, internal employees showed complete resistance to this new system/approach. If Barilla can’t convince the internal employees, it is a tough task to sell the concept to distributors.

Some of the benefits would be an effective operation process, decrease distribution costs, inventory levels and manufacturing costs

Drawback would be Lack of technological advancement within Company and distributors, High dependency of data from distributors,...