My decision for this case is to implement the Just-In-Time Distribution (JITD) system that was proposed by his predecessor Brando Vitali. This system is entirely different from the existing set up and is being opposed by both the distributors and Barilla’s Sales and Marketing Department. Barilla Spa, an Italian pasta manufacturer, is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. In order to bring things back and to improve its margins. I have studied the reasons for this opposition by several facts and have suggested recommendations. I suggest that in order to condense the Bullwhip effect being experienced by Barilla, their supply chain would have to be centralized. I have given my rationale for the JITD system to work and have suggested recommendations to resolve all existing issues. I think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners. I also believe that by following my recommendations, Barilla will succeed in influencing its distributors and Sales personnel to work together and implement the JITD program. This will not only result in better performance in terms of time and money but also promote trust and good relations among all the partners in the supply chain.
2. Identification of the problem
Barilla is suffering from what is known as Bull whip problem- high inventory, -magnification of demand variability across the chain-frequent promotion – only one way of flow of information.
• Promotions: Barilla’s sales strategy relied heavily on the use of promotions, in the form of price, transportation and volume discounts. They divided the year into 10 to 12 canvass or promotional periods, during which different products were offered at discounts. These price discounts ranged from 1.4% to 10%. Barilla’s volume discounts consisted of carton discounts offered by sales representatives and the...