Barilla Case Study Solution

881 Words 4 Pages
Barilla is a pasta manufacturing company that enjoyed double-digit growth rates of up to 21% in the 1980s decade but, was faced with economic problems at the onset of the 1990s decade (Hammond, 1994). The root of Barilla's problems is the increased frequency of demand fluctuations and a rigid distribution system. As a result, the heads of the logistics department proposed a change in the distribution process to the "Just-In-Time-Distribution" (JITD). However, the changes in the distribution process were highly opposed by the distributors and the sales team at Barilla. With such substantial opposition, the logistics departments heads are re-evaluating the viability of the JITD distribution method.
Strategic Issues/ Problems
Fluctuating Demand
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According to the distributors, Barilla is seeking to undertake their inventory functions at their establishments which also involves giving power to Barilla. Furthermore, the distributors argued that JITD would only serve to save Barilla costs while the company pushes their product through the distributor's warehouses.
On the other hand, sales representatives viewed the JITD as dangerous as it threatened their jobs. Furthermore, the sales department observed that adoption of JITD would result in the replacement of Barilla's products in the distributors and retailers' shelves with those of the competitors. Furthermore, the sales representatives also questioned the applicability of the JITD process in the promotion activities that serve in pushing the Barilla's goods onto the retail shelves and into homes. As a result, the opposition against the adoption of the JITD process resulted in doubts regarding its
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Expanding the depo capacity will ensure the ability to compete with the large distributors. Furthermore, depos will serve as the primary centers for data collection to be analyzed at the company’s Central Distribution Centers (CDCs).
Improved Forecasting Method
The JITD process is highly dependent on forecasting, and higher accuracy of demand forecasting increases efficiency in the production process. Furthermore, better forecasting techniques will enable sales teams to undertake promotions with surety that the provided inventory is enough to meet the demand. Provision of surety will increase the trust that the sales team has in the JITD process.
The Barilla case provides evidence that it is challenging to institute change in an organization, especially in operations management. Despite the opposition problems faced in establishing the "Just-In-Time-Distribution" (JITD) process, the adaptation of the distribution structure in the company can help the logistics team to bypass the rigid distributors. As a result, direct distribution will enable the company to be more flexible while also saving

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