Barilla Sp(A) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

2 What conflicts or barriers internal to Barilla does the JITD program create? What causes these conflicts? As Giorgio Maggiali, how would you deal with these?

barilla spa case solution

Solution 2

Before implementing the just in time distribution approach Barilla would face some problems which might play a role of hurdle. Like for example first a formal approval needs to be taken from all the concern bodies that actually plan the supply chain framework. These internal bodies would for sure have a detail look at the possible pros and cons of the approach and would recommend the changes or it might be a possibility that they might not approve the idea. Furthermore the people belong to marketing and sales department would found them less competitive in predicting the sales for future because the implementation of this system would eliminate one of the major responsibilities of the sales forces which might result in reduction of motivation. This would also reduce the commissions for the sales staff because from now on they will not be able to push the products towards the distributors. Additionally the efforts of marketing and sales would also suffer because after the implementation of this system the distributors will not enjoy the benefits of trade promotions or bulk buying. Another threat to the Barilla would be the empty space at the distributors ware house which would for sure be filled by the Barilla’s competitors. This spacing issue might hurt the sales of Barilla’s products because to regulate the inventory the distributor would also push the competitor’s product in the market which would for sure reduce the sales of Barillas products.

As the director of logistics Giorgio Maggiali must draft this system by looking upon all the perspectives. First of all he must satisfy all the concern departments by drafting the exceptional strategy for implementing the just in time distribution approach. Furthermore Maggiali must have a detail meeting with marketing and sales people to take them on board for excellent mutual understating. Maggiali must also take the important distributors on board for their input and then run this approach as a pilot project on initial basis. Maggiali must make the distributors realize that by working through this system they would reduce their inventory management cost and can also supply fresh stock to the market.

By working on these suggested actions a successful just in time approach could be implemented in the Barilla. for the proper formulation of the strategy all the channel members need to be taken on board so that all the issues can be aligned and all the possible hurdles can be removed. In this channel the most important member is the distributor whom should be given the extra importance because he would be the one who pushes the product in the market.

As one of Barilla's customers, what would your response to JITD be? Why?

Solution 3

Being an independent distributor, just in time distribution would benefit in reducing the inventory management cost for him but there is another factor that might make him think twice before adopting this system. An independent distributor must take it as an advantage from his perspective because this might allow him to have an extra space on his warehouse shelf’s which can be given to other companies or competitors. This will simply reduce the stress of the over stocking from the shoulders of the distributor. Furthermore he would be able to receive fresh stock on regular basis. For example being a customer one would keep the inventory of 3 weeks but after implementing the just in time distribution approach he would be able to keep the inventory of only one week and as his stock reduces to the agreed level, the new supply would be delivered to that distributor. Using this approach would help the distributor to keep a proper check on inventory control and moreover it would help him to audit it regularly from both inventory and financial perspectives.

The biggest concern towards the Barilla is that being its customer, it is really difficult to provide access to the sales data because of confidentiality purposes. The reason for this concern is that, no one would wish to allow a 2^nd person to come and control their inventory and predict the forecast. Completely relying on the just in time distribution approach would raise the issues like sometime there might be over inventory issues or sometimes there might be under stocking issue. These issues would give birth to the conflicts between the Barilla and its customers. This system can be implemented initially at the super markets by taking all channel members on board, and after the implementation if these markets feel that they are free from the responsibility of maintaining and ordering stock so this system can be implemented everywhere................................

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