Jitd for Barilla

What is the JITD program? Evaluate it from the perspective of Barilla and an independent distributor. What kind of products might such a program is best suited for?

JITD stands for Just-In-Time Distribution. Barilla implemented JITD system to counter demand variation. The system required the distributors to share their sales data immediately, then Barilla would use data to forecast, monitor the flow of products through the distributor’s warehouse and deliver appropriate amount of products to distributors in time to meet the shortage.

Barilla faced many problems that influenced the demand forecasting at that time. Barilla has a large number of SKU’s, which led to greater complexity. Meanwhile, the average lead-time that Barilla supplied its distributors was 10 days. The raising costs increased the fluctuation of demand and it was difficult for Barilla to schedule its resources, labor and facilities to cope up with this. Correspondingly, Barilla had to schedule more trucks to deliver during high demand period, which increased transportation costs. Barilla had many sales representatives and they might want to push more products to distributors during promotions season and less products in non-promotion season, which led to demand fluctuation further. From distributor’s part, they didn’t have forecasting system or analytical tools to determine the order quantities.

By implementing JITD program, Barilla collaborated distributors to work as a team and fix the problems together. If it was hard to forecast demand through distributor side, Barilla can get information from market and potential customers by surveys. In this case, Barilla can set a proper production level and inventory level ahead. On the other side, Barilla should investigate each distributor’s situation, including location, transportation and potential amount of customers to decide order quantities for each of them. For Barilla, the forecasting would be more precise because of the aggregated demand,...