Halden Zimmermann – Barilla SpA Case Analysis Part 4(Final)

Recommendations

Based on the preceding discussion, Team 09 recommends the JITD system to Barilla SpA. We further propose the following steps be taken to solve Giorgio Maggiali’s

– Implement a collaborative planning system between Barilla and its distributors to ensure that ordering information is relayed to Barilla in a regular manner.

Furthermore, it is imperative that Barilla review the inventory savings to the distributors and their customers through the implementation of this system (i.e., vendor managed inventory system).

– Switch data gathering frequency, from weekly to daily, to allow a steady stream of delivery and production. This system eliminates the bullwhip effect from the downstream to upstream channels.

– Reduce the number of stock keeping units (SKUs) to a minimum number as it is known that retailers only carry the product in one and, at most two, packaging option(s).

– Utilize sales people to gather demand requirements from supermarkets and communicate the information to Barilla and to communicate promotions to logistics/factory.

– Implement a paperless ordering system (e.g. Electronic Data Interchange – EDI or Point-of-Sale [POS] terminals) to facilitate the transmission of orders from end-

users to Barilla. Through the POS terminals, reorder quantities are automatically transmitted to the manufacturer (similar to an electronic Kanban system).

– In the long run, eliminate the distribution channels and use the 18 Barilla-run depots to supply the chain supermarkets, independent supermarkets and small (Signora Maria) shops to smooth the production operation and optimize overall inventory by “bringing” Barilla operations closer to the end user (Chart II).Initially, while we anticipate resistance to these recommendations, we are confident that Barilla will be able to demonstrate that the JITD system will be a win-win solution for all. Considering that Barilla is selling directly to Signora Maria shops, Barilla is controlling inventory for mom and pop establishments and can easily implement the JITD system here. Through the successes with these small stores, Barilla will be able to show its end users how the collaborative planning and technology will work to everyone’s advantage.

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