Table of Contents
Executive Summary
Part 1 Executive Summary
Issue Identification
Part 2 Fundamental Issues
Part 3 Systematic Issues
Environmental & Root Cause Analysis
Part 4 Qualitative and Quantitative Analysis
Alternatives and or Options
Part 5 Alternatives
Recommendations
Part 6 Recommendations
Implementation
Part 7 Recommendations and Implementation plan
Monitor & Control
Part 8 Monitor & Control
Part 9 Conclusion
Part 1 Executive Summary
I realized that Barilla is confronting with huge fluctuation on its production because of the
unsteady orders from distributor. This variation leads to expand production prices as well
as piled up inventory at distributor’s depots, meanwhile, there was also stock out recorded
at retails.
After careful analysis of the whole situation, my decision is: I have recommended the
implementation and execution of the JITD system because production under this system is
driven by the consumer demand and controlled by Barilla instead of being controlled by
the distributor’s orders.
It’s possible to do this based on Barilla’s own logistics; the variation of manufacturing
would make distribution work well. Furthermore, JITD will avoid either the accumulation
of the inventory at the distributer’s warehouse or running out of stock for retailers. As
Barilla is a vertical integration corporation, the rise and fall in demand would affect not
only the pasta plant but also the raw material supply such as flour, transportation, etc.
Above all, it’s necessary to implement the new way to a supply chain management.
However, as the long time traditional operation for the supply, there are some difficulties
need to be solved and conquered, such as customers don’t want to lose their control over
the placing of orders at their willingness, and our own sales reps feel their position to be
threaten if this project will be implemented.
Implementing of JITD policy is inevitably, it’s relative to the corporation’s growth and
sales increase, so it’s necessary to well solve existing problems and stunting，well control
the implementation, I have the confidence that this policy will fulfill the great profit for
corporation.
Part 2 Fundamental
The fundamental issue that was Barilla lacked of promote and accurate sells date
information that was necessary to support inventory quantities according to the actual
market demand, which resulted in the large week to week variation in demand and brought
the operational inefficiencies and cost increase. This major issue was caused by the
following systematic issues:
Part 3 Systematic Issues
1.Transportation Incentive
Nature: Tactical Timing: Short term
In order to reduce transportation cost, Barilla encourage full truck loads of shipment and
provided 2-3% discounts to its distributors and customers to by more inventories, so that
