Barilla Spa Case

Barilla Spa Case

Executive Summary

My executive decision is to implement the innovative idea of the Just-in-time distribution (JITD), which is modeled after the popular “Just-in-time” manufacture concept. The decision to move to JITD model would enable Barilla to send product to the distributors according to the internal planning processes by allowing Barilla to review all the distributors’ shipment data and ship only what is needed to the retail stores.

This new strategy will allow Barilla to forecast and maintain actual inventory levels. Currently the orders for Barilla’s dry product vary widely from week to week (Exhibit 12) causing a bullwhip effect, which need to be minimize, to reduce stock outs. With a more efficient inventory management model, Barilla will be able to reduce the average delivery time to distributors from the current eight to fourteen days after the order is placed.

Even though Barilla is not currently receiving favourable response to the JITD model, we need to convince and educate the distributors about the benefits of the JITD model and focus on the retail customer. The JITD model should be considered a selling tool offering customers additional service without any extra cost. The JITD proposal will be able to remove costs from the distribution channel without compromising service, as manufacturers, distributorsa and retailers are all suffering from thinning margins.

Immediate Issue

Barilla had little progress implementing the idea of the JITD proposal. Barilla’s customers were not willing to give up their authority to place orders and were reluctant to provide detailed sales information. More disconcerting was the internal resistance from Barilla’s own sales and marketing departments. Barilla will need to regroup and decide where to go with the JITD model, if this type of program will be feasible in their environment and what kind of customers should be target. Barilla needs to convince its customers of the...