Barilla Spa – Jitd Case Study

Barilla SpA – JITD case study

By: George Abosuawan

Table of Contents

Executive Summary        ……………………………………………………………………….        Page 3

Issue Identification        ……………………………………………………………………….        Page 4

Root Cause Analysis    ………..        ……………………………………………………………        Page 5

Alternatives and Options ………………………………………………………………………        Page 8

Recommendations        ………………………………………………………………………        Page 9

Monitor and Control        ………………………………………………………………………        Page 10

Exhibits                ………………………………………………………………………        Page 11

Executive Summary

As the director of logistics for Barilla, I’m faced with a challenge of making a decision with what to do with the current state of our supply chain. Since 1875, we have prided ourselves in providing not only the best quality of pasta but also in providing the best quality of service to our distributors, retailers, and most importantly our final consumer. In order to do this we need to evaluate the Forecast Accuracy, delivery performance, cost benefit, and employee morale/engagement to ensure the recommendation below is successful.

We identified a number of alternatives and looked at the various enhancements that a JITD would provide to our company and feel that it is strongly recommended to move forward with this process. By implementing this, we see vast areas that will improve throughout our supply chain. We feel that we will be able to provide assistance to our distributors by sending them a logistics team, and by providing them with proper Forecasting systems and tools that will assist in more accurate forecasting and these will lead to our end goal of a reduction in inventory levels in all chain links.

Our current state offers a complex situation in regards to inventory optimization as we carry various SKU’s and don’t have very accurate forecasting which puts stress on our manufacturing plants. We have been operating as a pull system which is leading to demand variability. This variability’s is resulting in long lead times (10 calendar days from start to finish) and a high percentage of stock-outs (7%). We are carrying a large number of capitals in our stock and feel that this money can be used effectively elsewhere such as forecasting software and hardware for the DC’s. By implementing JITD we see our lead times reduced to 3 calendar days and the flexibility in moving the product will result in reducing our stock-outs from 7% to less than 1%. We currently have out DC’s ordering once a week which is contributing to the challenges listed above; with our new system, they would be ordering daily and that data would be in real time which is an effective way to be proactive rather than reactive. We foresee some challenges with this launch as we will see resistance from our sales teams and distributors however we believe that with the right communication, a creative/strategic incentive plan and proper implementation we will be able to get everyone onboard.