Barilla Spa Essay

1943 WordsOct 21, 20148 Pages
1. What caused the difficulties that the JITD program was created to solve? The problems that JITD intended to solve: ● Demand fluctuation: Barilla suffered increasing operational efficiencies and cost penalties that resulted from large week to week variations in its distributors’ order patterns. According to the Exhibit 12 , the demand variability was huge so it was very difficult for the whole supply chain to forecast the demand and order accordingly. ● Furthermore, the production line of Barilla had a long setup/change process and was highly automated as well. The manufacturing sequences of pasta production made it very difficult and cost prohibitive to produce particular types of pasta that were out of stock because of unexpectedly high demand. The temperature and humidity in the kiln had to be precisely specified for each size and shape of pasta and had to be tightly controlled to ensure that quality was maintained.This procedure limited the ability to rapidly shift production between different pastas. So it could not afford frequent changes to fulfill sudden demands.So ,if the forecast is unreliable, they would either need to build up huge inventory or lose the customer fill rate, none of them is favorable. Also, the Barilla customers will face stockout due to the low fill rate of Barilla. ∙ ● High Inventory at distributors and No Space for new products: As Exhibit 13 shows, the distributors have huge inventory and stockouts rate, which indicates that new product keeps coming out while old products still keep their spaces due to which on one side there was increasing inventory holding cost while on the other side, there’s

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