Boeing Australia Case Study

Executive outline barilla is operating in a very old-fashioned distribution establishment that needs to be changed. Implementing this new JITD lead increase capability across the picture chain. The system forget reduce manufacturing costs, increase depict chain visibility, increase distributors dependence on kelpwort, defecate better alliance with distributors, reduce entry level and most importantly im rebel manufacturing readiness and forecasting using objective data. This JITD leave alone see glassworts supply chain synchronized from manufacturing to end users.Strategically, the best end for barilla is to implement the JITD program. This entrust put up for greater capability and flexibility to reply to inputs from end-consumers. In the JITD system, each distributor would hand over glasswort with data from products that they shipped to retailers in previous eld as well as current run levels for each Barilla SKU. This data would then be used to substantia te forecasting and replenishment decisions. The leave end point in a even-textured running operating system and excellent customer ser guilt.To prove the credibility of JITD and win over apprehensive customers the involvement of sneak management volition be employed. Within the neighboring six months Maggali and top management police squad allow for analyze day-to-day shipment data of the distribution chain. coterminous a database of historical and present enquire patterns of distributors leave behind be created and shipments exit be simulated with JITD in place. This system volition reduce argument out rates and entry levels term increasing serve levels. Next, experiments will be run at the Pedrignano reposition and then the Milano depot.This will establish the credibility of JITD and win over distributors and retailers who be apprehensive in acquire into this new system. Approximately hug drug top managers, from customer service managers to vice presidents, logistics, purchasing, gross revenue and marketing and entropy technology managers will be entangled in the decision making, implementation and monitoring of this new system. This will prove credibility of JITD and convince customers that change is inevitable and in this this case the benefits will be mutual. IssuesDeciding whether or not the Just In Time dispersal (JITD) model should be implemented into Barillas operations. Barilla is scummy from escalating operational inefficiencies. The company is being burdened by subscribe fluctuations in its manufacturing and distribution systems. Also, this large workweekly variation in distributors values is increasing bang costs. Trying to convince internal and external customers of the benefits of JITD Barillas customers be unwilling to give up authority to place orders as they please.The neglect of faith in Barillas inventory management as well as made some customers reluctant in giving detailed gross revenue data so that Bari lla could improve its forecasting strikes. Customers perceived this JITD give-up the ghost as a quest by Barilla to transfer indicator to themselves. Internal customers are as well resistant to this change as they as they view this concept to be infeasible and or dangerous. Environmental and beginning Cause Analysis There is a growing burden that demand fluctuations are imposing on the companys manufacturing and distribution system.Vitali has suggested for historic period that the company implement this innovative JITD which is modeled off JIT manufacturing. Vitali proposed that rather than happen the practice of delivering products to Barillas distributors on the basis of whatever orders distributors set with the company, Barillas own logistics organization would instead specify auction pitch quantities that would much effectively meet end users needs and would in addition more(prenominal) evenly distribute the workload on Barillas manufacturing and logistics. This was heavily resisted both internally and externally.External people are saying that Barilla wants exponent over its distributors and wants to manage their inventory for them. On the other hand, the internal sales and marketing people thinks this JITD is unworkable and will reduce their workload so they see it as a panic and as a result they are putting up a resistance. The variability in demand is as a result of lack of forecasting systems or advanced(a) analytical tools at the distributors end. Orders for Barillas dry products swing from week to week and such extreme demand strains Barillas manufacturing and logistics operations.For example, the precise sequence of pasta production necessitated by the tight heat and humidness specifications in the tunnel kiln made it difficult to readily produce a particular pasta that had been sold out due to unexpectedly uplifted demand. In addition, retention sufficient finished goods inventories to meet distributors order requirements was super expensive when weekly demand fluctuated so much and was so difficult to forecast. Advertising and trade promotions are similarly intensifying the resistance to implementing this JITD.Distributors take for become accustomed to price discounts through volume orders, promotional activities and transportation. Barillas sales strategy relied on the use of trade promotions to push products into the grocery distribution network. Distributors looks forward to these promotions and also sales people at bottom Barilla looks forward to giving distributors discounts in this very old-fashioned distribution system. Alternatives and/or Options Implementing the JITD system would prove beneficial to the company and its overall supply chain management.Benefits of this JITD would be reduced manufacturing costs and inventory levels, better relationship with distributors due to increased supply chain visibility and distributors dependence on Barilla and overall improvement in manufacturing pl anning using objective data collected. For sales people this would be a selling tool rather than a threat to sales. Distributors will also see an improved fill rate to retail stores, additional service from Barilla without any extra cost and reduced inventory holding costs.Disadvantages to these are lack of infrastructure to handle JITD, risks of inability to adjust shipments quickly to stock-outs, cost benefits uncertainties, unconvinced distributors and reduction in responsibilities for Sales Representatives. Recommendation It is recommended that Barilla implement this JITD system in its supply chain. The system will provide customers with additional service at no extra cost. It will also improve Barillas visibility with the trade and make distributors more dependent on the company.This dependence or vendor management inventory (VMI) system will improve relationships between Barilla and distributors. More important, is the information regarding the supply at the distributors wareh ouses would provide the company with objective data that would allow for improvement in planning procedures and forecasting. In addition, distributors will not solely improve their fill rates to retail stores but reduce their inventory holding costs. Sales and marketing people will realize that this JITD will be a selling tool rather than a threat to sales.This in the long run improves overall performance in operations. performance Maggiali needs to look at JITD as not only a logistics program but as a company wide front and get top management from both sides involved in decision -making and teamwork. With top management on board, the first implementation will be done at Barillas largest DO (organized distributor) the Cortese. Within the next six months Maggali and top management team will analyze daily shipment data of the distribution chain.Next a database of historical and present demand patterns of distributors will be created and shipments will be simulated with JITD in place . This system will reduce stock out rates and inventory levels while increasing service levels. Next, experiments will be run at the Pedrignano depot and then the Milano depot. This will establish the credibility of JITD and win over distributors and retailers who are apprehensive in buying into this new system. An information system will also be implemented to communicate with all customers.SKUs will be bar reckond so that they are easily identifiable that is Barillas code and distributor/customer codes. Using this coding system, the company will be able to receive information through any code and also reduce the impact of internal changes in products on DO systems. Barillas forecasting systems will be under improvement so that the company can make good use of information received. monitor and Control There has to be credibility of this new venture in order to convince customers both internally and externally to sign on.In order to reap success in any new initiative top management have to be involved. A team of approximately ten top managers including managing directors, marketing and sales managers, logistics managers, purchasing managers, vice presidents and information technology managers will monitor the implementation of this new initiative, JITD. Each day customers will send information to Barilla using EDI (electronic data exchange) systems. This information will include customer codes, previous days stock-outs, previous days sales and advance orders for future retailer promotions.This will help Barilla to improve internal operations for the company and customers alike, now that Barilla will be responsible for determining quantities and delivery schedules. This will see a reduction in inventory levels, distribution costs, manufacturing costs, improved responsiveness to distributors demands. boilersuit efficiencies in the companys operations will be unmingled in every link of the supply chain. Monitoring and control will be an ongoing process to minim ize inefficiencies in operations.