Essay Example on Barilla has since grown into one of the world's largest Pasta Producer

Starting as a small pasta shop in Parma Italy in 1875 Barilla has since grown into one of the world's largest pasta producer Composed of both domestic and international sales Barilla product mix is composed of two categories dry which makes up 75 of the products and fresh which makes up 25 of their products Fresh products have a shelf life of up to 3 weeks 21 days and dry products shelf life range anywhere from 10 24 months Barilla retailed to both small independent shops and supermarkets and historically used a traditional form of distribution that relies on retailers checking inventory and placing orders weekly based on their demand needs This traditional system of ordering created several issues for Barilla and therefore Vitali Barilla s previous director of logistics suggested implementing a Just In Time Distribution JITD The system would rely on Barilla own logistics specifying the appropriate delivery quantities that would more effectively meet end consumer s needs and at the same more evenly distribute the workload on Barilla s manufacturing and logistics systems SOURCE One of the issues faced with traditional ordering systems was demand fluctuation 

With traditional ordering being done on a week to week basis demand was left open to huge fluctuations caused by a variety of things such as promotions poor forecasting techniques excess inventory volume discounts and so forth This fluctuation led way to several other issues for Barilla distributors including lead time on products specifically perishables manufacturers inventory costs distributors ability to produce product quickly and distributors ability to carry and move large quantities of products JITD hypothetically would solve a lot of these product inventory and distribution issues for both retailers and Barilla JITD would be vendor managed Barilla would collect customer data and use that to forecast demand needs and decide what and how much to produce and when This system would benefit both Barilla and retailers Retailers would see inventory quicker have lower inventory costs higher quality of service and get additional services such as inventory management at no cost Barilla would see reduced costs reduced inventory cycles and a more efficient production planning and supply chain management All of this being said there were some drawbacks to this program most associated with skepticism that JITD would actually work Retailers feared Barilla would control too much of their operations and the system itself would be ineffective Internally Barilla received resistance as well Sales staff worried about losing their jobs or the majority of their responsibilities there was a perceived lack of technologies and infrastructure to execute JITD and JITD would make Barilla unable to run marketing promotions 

Yes I believe JITD would be feasible and effective in 1990 given Barilla s current operations However it would require diligent research implementation and monitoring to be successful If I were Barilla and confident in my system I would target supermarkets and larger chains to introduce JITD While it might be harder to initially get their foot in the door once they are in Barilla will have much more opportunity Barilla could lay the groundwork for their system and have access to huge amounts of data to perfect it Additionally targeting supermarkets and larger chains would make is so a larger percent of their market is already using JITD and easy to showcase JITD effectiveness to other large retailers Once Barilla has done this is should be easy for them to implement JITD on independent retailers and smaller shops