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Haifeisi
Haifeisi
Haifeisi
ers. Before JITD, distributors would place orders based on their forecasts, leading to
fluctuations in demand. With JITD, Barilla aimed to take a more active role in distribution by
using real-time data to manage inventory levels and shipments.
t keeps coming out while old products still keep their spaces.
3. How does JITD work? Does it address the entire supply chain (internal or external) or just
manufacturing and distribution at Barilla?
3.1 JITD should look at all of the distributors' shipment data and send only what is needed at the
stores—no more, no less. Right now they operate where it is impossible to anticipate demand
swings so they up having to hold a lot of inventory and do a lot of scrambling in their distribution
and manufacturing to meet the demands of the distributor. And even if they do, the distributors
don't do a great job at servicing the retailers. Every day each distributor would provide them data
on what Barilla products it had shipped out of its warehouse to retailers during the previous day, as
well as the current stock level for each Barilla SKU. Then they could look at all of the data and
make replenishment decisions based on their own forecasts. they would actual retail sell-through
data.
JITD is a supply chain management strategy proposed by Barilla. It aims to improve supply
chain efficiency by allowing Barilla to directly manage the inventory levels at its distributors'
facilities. Under JITD, distributors would share their sales data with Barilla, who would then
determine the appropriate product quantities and delivery schedules. Barilla would deliver
products to the distributors' facilities based on the actual consumer demand data.
JITD primarily focuses on the coordination between Barilla and its distributors, addressing the
manufacturing and distribution aspects of the supply chain. It does not directly involve upstream
suppliers or downstream retailers.
4. What internal and external conflicts or barriers might the JITD program create? If you
were Giorgio Magglia, how would you deal with these?
Internal conflicts or barriers that the JITD program might create include resistance from
Barilla's sales and marketing teams who may perceive a loss of control over promotions and
product availability. Additionally, Barilla's production team may face challenges in adjusting
manufacturing schedules in response to fluctuating demand.
External conflicts or barriers may arise from distributors who may be resistant to sharing
sensitive sales data or who may perceive a loss of autonomy in determining their own inventory
levels.
Internal Conflicts:
Employee Resistance: Some employees may resist the change in the traditional order
management process. Communication and training programs can help address this.
Training Costs: Implementing JITD may require additional training for employees. Allocating
resources for effective training is crucial.
External Conflicts:
Supplier Relations: Suppliers may face challenges adapting to more frequent and smaller
shipments. Collaborative negotiations and support can mitigate these concerns.
Customer Reactions: Customers may be unhappy with changes in delivery schedules or product
availability. Transparent communication and managing expectations are key.
External conflicts
As one of Barilla’s customer, the response to Barilla’s JITD proposal would be a combination of the
following emotions:
· Sense of defense. How could Barilla demand sales data from us, which are considered confidential?
Does Barilla have the authority to do this? Are they intending to monopoly the supply chain? If we
release our sales data to Barilla, will this
information go to our competitors? These doubts will result in defensive actions
such as procrastination in responding to Barilla’s request or refuse to cooperate.
· Sense of losing control. If it is left for Barilla to decide how much we need and
how much should be shipped to us, we will lose control of our inventory and advantage to negotiate
better price and service. Besides, Barilla will base its daily
distribution amount to us on the information of our sales amount and inventory
level as well as similar information from our peer distributors. This does not
seem to be a robust approach because their criteria for “quota” distribution are
vague and subjective. It is easy to cause unfair treatment. What if we need to order more due to a
sudden market surge? Will we be granted more shipment? As a
protection, we might intentionally alter sales data and inventory level reported to
Barilla whatever is advantageous to us.
· Sense of burden. Barilla requires us to report to them our inventory level and
sales amount everyday, which contradicts our periodic/weekly review policy and
will add extra burdens to our staff. Will Barilla pay for the extra cost incurred?
We might require Barilla to pay for the extra staffing cost. Besides, since information is money, Barilla
needs to pay for our regularly provided information.
· Sense of distrust. It seems that Barilla thinks that it can do a better job than us in
managing our inventory. Their greatly reduced shipping amount to our company
indicates that they think our predictions in the past are not correct. As a counter
action, we might refuse to provide past sales data to Barilla so that they will have
difficulties in predicting the market demand.
Solution:
Convince the customers that this is a win-win concept. We will convince them that JITD
is worth trying because it is a win-win process for all stake-holders by reducing the inventory and
accelerating the delivery process through synchronization and transparency. Also try to convey the
message that a part of the benefits from the JITD program
will be passed-on to them.
Solution: Conduct thorough internal communication and education programs to explain the benefits of
JITD to the sales, marketing, and production teams.
Collaborate closely with distributors, addressing their concerns and emphasizing the mutual benefits
of improved supply chain efficiency and reduced costs.
Offer incentives to distributors for participating in the JITD program, such as providing them with
access to real-time demand data and customized promotions.
Pilot the JITD program with a select group of willing distributors to demonstrate its effectiveness and
gain support before scaling it up gradually.
In this system, the goods were to be sent to the distributors as per the demand
forecasts done by Barilla and not based on the internal planning system of the
in both the facilities and thereby reduce the problem faced due to demand
fluctuations.