Barilla Executive Summary Essay
Due to a growing burden on the company and a steady increase in costs due to demand fluctuations imposed on the manufacturing and distribution system, Barilla SpA, an Italian pasta manufacturer expressed that an alternative approach to order fulfillment be implemented. Just In Time Distribution (JITD), proposed by Giorgio Magialli (director of logistics), comes with many pros and cons both for Barilla as well as its distributors and retail partners. Due to the vast distribution network of Barilla, the JITD proposition would empower Barilla with the information (shipment data) needed to only send what is needed at the stores, no more, no less instead of continuing the past practices whereas …show more content…
3. Promotions: Distributors felt they would lose the advantage they once had during promotional ordering without the ability to order on a daily basis.
4. Trust: In such a complex distribution web of over 200 suppliers, if the distributors disclosed the sales data to Barilla, what would happen to their supplier network?
Opposition to JITD (Sales Force - Internal):
1. Promotions: there was doubt as to whether or not trade promotions could be conducted using the JITD process without offering a sense of promotions.
2. Expansion: JITD relied on the distributor providing data on what Barilla products it had shipped out of its warehouse to retailers during the previous day, as well as the current stock levels for each Barilla SKU. Using this data to forecast makes the whole system reliant on previous shipment numbers. How can a new distributor fall under this process and be guaranteed accurate forecasting?
3. Job Security: Sales representatives serving Organized Distributor “DOs” spent an estimated 90% of their time working at the store level. If the