Barilla Spa

Barilla Spa

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Barilla Spa
Barilla SpA is a company founded in 1875, in 1988 giorgio Maggiali was trying to implement the Just in time distribution system which he thought would be an optimal way to conduct inventory replenishment for its distributors and thus increase customer satisfaction. The advantage of using this new system is that it responded more correctly to demand fluctuations, lowered stock-out levels, decrease inventory levels needed in the warehouses, increased the level of services and consequently it translated to customer loyalty and satisfaction.

Even given the above-mentioned advantages in the usage of JITD, there were internal and external resistances in implementation. Barilla’s customers resisted change since they were comfortable with their traditional ordering system in which they exerted more control. Both forces were against Barrila’s sending any shipment that were needed based on previous shipment data and forecasts. In consequence sales people were afraid of their sales flattening, lack of direct input and dependency of the system. From their distributors selling the idea was difficult after all, they weren’t getting a listening ear. However it is my belief that this system if implemented can be useful to all member in the supply chain, by reducing the wild cyclical demand of inventory levels and increase customer satisfaction. Given this assessment, I will provide methods that Barrila can use to deal with both internal and external resistance.

In the early stages of any improvement, specially those involving IT there will be resistance to change, since it will change the organization’s culture and status quo. From the customer side they will not jump into any process that significantly takes control from them without a quantitative and qualitative prove that such process works and significantly will improve, sales, revenue, level of service etc.

The first step Barrila has to take into account is picking a distributor that will serve as a champion for the project. They have to prove to them that by implementing JITD will help by saving specific numbers in inventory levels, satisfaction in services, stock-out levels and others. In order to due that they will have to create either a simulation in which the program can be effectively be seen, or use it internally to and then show the results to potential customers. The steps of implementation must be clear: for example if there will be the use of EDI to transfer inventories levels then it needs to be explained who will be responsible for the IT innovations and the reliability of them. They need to know that the compatibility level between different inventory measurement systems will be present. Furthermore in the early stages of the changes in the system they can have a backup system in case there is problems with the new system. Barrila needs to show that delivery times will be optimized and there will be no stock-outs. They should target initially only local customers and try to limit it to a region with greater proximity to access the functionability of the system before they can expand further. The fact that they are only thinking of using this process with dry foods is a good start since they be in inventory for two weeks thus they can best forecast the levels and deliver goods JIT.

Disclaimer
The above essay was written by a college student and merely states opinions of a college student. However, if you feel strong about responding to the opinions stated, please write to articles@directorym.com and express your concerns.


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