The costs are related to direct revenue loss due to competition andinventory holding cost respectively. I would be unhappy to lose my control and feel that Barilla is trying to bypass me and take control of all the orders. Furthermore, they also wanted to reduce the workload on the Barilla SpA logistic system and overall manufacturing. Push this implementation for top management. The production division is concerned about the lack of a sophisticated forecasting system in order to properly use the data received from the distributors in an efficient way.
I think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners. Also, it would essentially eliminate the current compensation system, meaning they would make less money. Under the current system there is a difficulty of Barilla anticipating demand swings, and in turn they are forced to hold extremely high inventories to satisfy demand and yet they still end up scrambling in their manufacturing and distribution operations to meet demand. If so, which customer would you target next? Through forward integration to the first tier customers distributors , Vitale aims to strengthen its competitive advantage in the market by reducing cycletime to manage the bullwhip effect at the same time. This was a radical change from the current and more traditional supply-chain setup where the distributors were not sharing any data and could place orders at will. Then it is not a problem to deal with the distributors, all the members share a common goal, to prevail on the distributors, to achieve the aim they have process to take.
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. This is just a partial case solution. This in turn would allow Barilla to create a more coordinated delivery schedule. 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. It used to be a small store that sold pasta and bakery products. Page 4 Alternative and Options…………………………………………………………… Page 6 Recommendations………………………………………………………………….
However this will still not fulfill all the required information for Barilla to flatten the demand, both Barilla and the distributor will benefit from better forecasted orders and decreased inventory. A concrete reward program should be presented to buyer who joins the program. It is a 3 or 4 digit number appearing on the front or back of your credit card. The main resistance internal to Barilla was from the sales and marketing functions, which Barilla, until now, has relied upon for its success. By not implementing the just in time distribution approach Barilla SpA and its distributors most of the time faces a relatively high cost because there is no concept of predicting the actual demand. Barilla should concentrate on reducing its lead times and deliver at a faster pace.
An internal consensus should be develop before approaching customers. For example they sell their products to large grocery stores, as well as small mom and pop places. We think that dealing business, most of the time; it is concerning about resources and opportunities. Internally sales and marketing departments were completely opposing new concept. Furthermore, distributors did not have effective forecasting methods. Some buyers find this practice is not safe as they are passing their information to manufacturer.
But all the concerns Mr. Publication Date: May 17, 1994. The tremendous variations occur in demand due to the many factors. Inc was not able to cope up… 1815 Words 8 Pages can not be ignored. Maggiali has, clearly show that focusing oninventory and distribution chain management can result in major cost savings. Due to such a complex and multi-echelon network, Barilla has been experiencing large amounts of variability in demand which are resulting in operational inefficiency and increased manufacturing, inventory and distribution costs.
So if they are convinced to use an advanced management, may make a lot of difference, may reduce the lead-time and improve the forecasting system. Describe the solution proposed by Brando Vitali. 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. The company enjoyed a 35% market share of the entire pasta industry in Italy and 22% market share in the entire continent of Europe. Words: 3085 - Pages: 13. There lack of sophisticated forecasting system and no limit on order quantity contributed to fluctuating demand.
By doing so, Barilla SpA can use that data from its distributors to better understand the demand of its products and perform better forecasting. I would, however, force them to sign a third-party proprietary agreement before handing over my demand and sales data. It involves producing only what is need, when it is needed. A fluctuation in demand depending on seasonality is a predictable. Inventory levels are high at all levels of the supply chain which is. This new system, contrary to current system Barilla has will eliminate Bullwhip effect and stock outs by having centralized information, there will be data transparency between Barilla and distributors. He must show the benefits that his plan would have on each of the supporting organizations to gain their support.
These were both caused by demand uncertainty. Executive Summary Barilla is faced with a problematic issue regarding facilitating volatile fluctuations in demand from its distributors. What are the benefits and drawbacks of this program? If the company tells enough of these, there would be no problem. There are a number of alternatives possible: 1. Neither you, nor the coeditors you shared it with will be able to recover it again. Why do you think this would help alleviate the problem? If however, I am not able to convince the customers, I will try other modes, in my capability, to effectively respond to the fluctuating demand. Perhaps both Barilla and the distributors want the same, but approach the problemfrom different sides.