Tlog Barilla

This leads to many problems for Barilla. Some of them are:

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Production Costs: These costs increased drastically as the demand variationincreased. As Barilla struggled to cope up with the fluctuating demand, the production costs rose as changeover was costly.

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Scheduling Difficulties: It was difficult for Barilla to schedule its resources andfacilities like Labor, Machinery and Trucks due to demand variations. This wasresulting in increased costs of Labor and maintenance.

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Transportation Costs: As a result of uneven demand, Barilla had to transport more products to its distributors in periods of high demand in lesser time than whencompared to periods of low demand. The greater number of trucks, etc that itrequired in periods of high demand increased its Transportation costs.

Recommendations

After listing out the problems and studying them in detail, we have come up with our recommendations to reduce uncertainty in demand. In order to do this, the distributors aswell as Barilla’s Sales and Marketing have to be convinced that this proposal do moregood to them than bad.“How will JITD work?”: The JITD system will work using the following innovativetechniques:

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Collaborative Planning: Barilla and the distributors can work as a team and planon different issues to smoothen out the creases in the supply chain.

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Demand Management: Barilla should not only forecast demand but also should tryto shape and influence it. This can be done using market surveys to determine theneeds and expectations of the consumers and designing products to satisfy them.Forecasting would become much easier and reliable if the demand can bemanaged and if techniques were put in place to reduce uncertainty.

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Aggregate Demand: As Barilla is going to decide order quantities for alldistributors, it can aggregate the demand and thus ensure better forecasts andreduced costs. This is due to the fact that even if some of the distributors demandmore than what was forecasted, the...