Barilla SpA case

Memorandum

To: M. Manfredi, CEO Barilla SpA.

From: G. MAggiali, Director of Logistics

Date: 10/23/2006

Re: JITD implementation plan - Executive Summary

Currently, Barilla SpA is experiencing a growing burden of increasing production costs, inventory levels and inefficiencies in manufacturing and distribution system due to huge fluctuations on demand and lack of forecasting information. In order to combat this problem, we would like to introduce and implement a Just-in-time distribution system (JITD) to enable information sharing along supply chain, improve production and distribution forecasts and reduce costs associate with inventories and inefficiency at the company level. However, the implementation plan is engaging troubles with resistances from both internal and external sides.

Internal Resistance

- Sales representatives are afraid of job security under JITD system

- Sales representatives are afraid of not earning enough compensation under JITD

External Resistance

- Distributors do not want to reveal information because of lack of trust

There are three alternative solutions that Barilla can use to deal with oppositions.

Einordnung der Supply Chain Finanzierung (SCF) in ...

English: Supply and demand network Deutsch: Liefer...

Logistics versus Supply Chain

After analyzing current situation and other factors, the most feasible solution for Barilla to deal with internal sales team first by enhancing their job security and explaining their important roles under JITD to seek their support to the system. Externally, we need to gain distributors' participation by showing them the benefits that they can have with JITD in place.

Implementation Plan

- seeking support from sales team first by providing job security commitment

- negotiating with distributors with solid data on cost saving and efficiency improvement

There are risks associate with the implementation of JITD. To implement JITD, we need a large initial investment on IT equipments, training programs for IT specialists and system design. If in case the JITD project failed, we have to suffer a huge loss. Also, in order to successfully implement the...