Daily stock outs will drive away the customers and high inventory will drain its resources. Also, the sales representatives are most likely receiving much of their compensation through commission on their sales.
What would you do to deal with the conflicts? In general, if one party is to make the inventory replenishment decisions for the system, who should it be? The distributors in turn shipped the product to supermarkets.
This data has to be collected for Barilla every day, process and keep as historical data to show improvements. It discusses issues such as poor forecast capabilities, batch order, lead-time, price variations and level of inventory.
Hope this will help. I believe that a few of the GDs and DOs will eventually be impressed by the benefit that the JITD program can bring to them and agree to sign on to try it. This will not only result in better performance in terms of time and money but also Barilla spa bullwhip effect trust and good relations among all the partners in the supply chain.
It means great opportunities for Barilla to reduce its inventory as well as production cost. Without knowing the sales data of its distributors, Barilla encounters great difficulties to forecast pasta demand and plan production accordingly.
Barilla products were distributed through three types of retail outlets: The bullwhip effect results from rational behaviour by companies within Barilla spa bullwhip effect existing structure of supply chains.
In addition, our attempt to convince some of our distributors to sign on and try the program seems not going anywhere. Before Barilla can implement JITD it must first garner acceptance from the different internal bodies that make up its distribution framework.
Distributors would not stock their inventory with Barilla products that exceed the real demand. Due to the nature of the tunnel kiln in the pasta-making process, it is impossible for Barilla to change the order of the pasta production to quickly fill an order of sold out pasta.
This approach will eventually reduce inventory across the chain, improve profitability both for Barilla and Distributors.
Given the unsuccessful experience with the other distributors, I would target the Barilla-run depots to promote the JITD. The first pilot runs should be created on two or three distributions of the company.
Each of these warehouses held about three days of fresh product in inventory. Barilla Spa, an Italian pasta manufacturer, is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors.
Both of these will force DC to order based on actual natural demand and not based on cost of acquisition. JITD helps to reduce inventory held at the distributors since it builds inventories at the central warehouses and then delivers only the quantities required by the end-users through checking inventory at the distributors more frequently.
As a result of implementing these recommendations concerning the JITD system: Bullwhip Effect in Supply Chain Overview The bullwhip effect occurs when the demand order variabilities in the supply chain are amplified as they move up the chain. Each rep carried a portable computer for inputting distributor orders.
Instead of keeping a two-week supply of pasta products retailers could reduce their inventory overhead quite significantly; thus, reducing their own costs.
The solution discuss in details what are the benefits and disadvantages of such an approach and deals in detail with the specific problems in the case.
Barilla faced a wild demand fluctuation that made them hard to control the inventory and has a low order fill rate. During any canvass period, a Barilla distributor could buy as much product as desired to meet current and future needs. The last advantage that JITD provides for independent supermarkets is based on inventory tracking.
I am confident that Mr. I think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners.
This phenomenon was first described by Forrester in and has been experienced since the s by those playing the Beer Distribution Game developed at the Massachusetts Institute of Technology Sterman, Fresh products had day shelf lives, and fresh bread, which had a one-day shelf life.
The Barilla customers will face stock out due to the low fill rate of Barilla. Most independents do not use any tracking such as RFID 1 and rely on hand counting of inventory and shelf space.
What causes these conflicts? Even though all of the distributors have computer-supported ordering system, few of them have sophisticated forecasting system or analytical tools for determining order quantities. Since the corporation from sales and marketing organization is essential for the success of the JITD, I will schedule meetings with Mrs.
And I will lead the team myself.
After analyzing the issues mentioned above that the company has faced due to the variation in demand patterns that has created bullwhip effect.The Bullwhip Effect and Barilla SpA The Bullwhip Effect is an observed phenomenon in forecast-driven distribution channels where there is variability up the supply chain.
BARILLA SPA Case Solution,BARILLA SPA Case Analysis, BARILLA SPA Case Study Solution, QUESTION 1 The bullwhip effect is basically the fluctuation or distortion in the information that is supplied within a supply chain. In the case of Barilla. Sep 28, · barilla spa case study analysis essay Barilla | Masters of Pasta Bullwhip effect - Duration: Scopes GIM 61, views.
Interview with Roberto Magnani. the bullwhip effect, e.g. the case study Barilla SpA (Hammond ), a major pasta producer in Italy, Campbell Soup’s chicken noodle soup experience (Cachon and Fisher ), and more recently, Kuper and Branvold (), Hoyt () and Peleg.
Barilla’s pasta supply chain suffers from classic bullwhip-effect problems: High inventory levels maintained at each level of the supply chain; frequent stockouts at the distribution level; demand variability exaggeration up the chain, and aggravated by constant sales promotions, Full Truck Load(FTL) and other volume incentives; and a lack of information on which to forecast demand.
Another problem created by the bullwhip effect is that Barilla as well as its distributors need to carry tremendous amounts of inventory to match/respond to the demand swing, this has showed to be very costly.
One of the main causes (first) of the bullwhip effect in barilla’s case is poor forecasting.Download