Absence of proper forecasting systems and only following replenishment ordering causing stock outs and back orders. What are the benefits and drawback of this program? Demand Fluctuations — There is a high standard deviation of demand on the Barilla Dry products from week to week. Company-wide, the view should be adopted that the relationship withdistributors is a long-term one, a partnership, and should be managed accordingly i. It used to be a small store that sold pasta and bakery products. Also, Maggiali should encourage the marketing and sales people to look at the overall benefit to the supply chain.
However, after two years of trying, little progress was made. Publication Date: May 17, 1994. It manufactures pasta and sells to various retailers largely through third party distributors. A concrete reward program should be presented to buyer who joins the program. There are a number of alternatives possible: 1.
A solução passou pela realização de testes internos na própria cadeia de distribuição primeiro em Florença e posteriormente em Milão , obtendo-se como resultados a diminuição do tempo de residência do produto, aumento da taxa de cobertura de produtos melhoria do planeamento da produção e redução dos custos de execução. Barilla made its mark in the world by taking a commodity. Systemic Issues: Barilla fully-automated manufacturing system is not designed to meet and accommodate the large fluctuation demands. Words: 832 - Pages: 4. Words: 391 - Pages: 2. Words: 1730 - Pages: 7. For example they sell their products to large grocery stores, as well as small mom and pop places.
Words: 884 - Pages: 4. The costs are related to direct revenue loss due to competition andinventory holding cost respectively. The fluctuations in demand have caused Barilla SpA's manufacturing costs, inventory costs, and distribution costs to go up. This information flow is used for new products, pricing, promotions, competitor analysis, etc. Second, in order to minimize its inventory. By nature, their pasta products experience waves of high and low demand.
By doing so, Barilla SpA can use that data from its distributors to better understand the demand of its products and perform better forecasting. Based on the given information in the case, we are not able to come up with exact financial numbersfor the curse of inventory. Why do you think this would help alleviate the problem? Sales force can turn the table around if the talk positively. Move away from large, batch orders at discounted prices, and introduce periodic orders at agreed prices. Furthermore, the people belong to marketing and sales department will found them less competitive in predicting the sales for future because the implementation of this system will eliminate one of the major responsibilities of the sales forces, which may result in reduction of motivation.
He felt operations could be improved if Barilla was responsible for determining the quantities and delivery schedules to their customers. Competing in a crowded field of over 2,000 Italian pasta manufacturers and the Italian pasta market as a whole was relatively flat, growing less than 1% per year. The causes of these conflicts are the lack ofsufficient flexibility in production, and the reward structure for sales representatives. The tight heat and humidity specifications in the pasta dry process makes it difficult for Barilla to quickly respond to the huge fluctuation and uncertainty of demand form distributors. O processo de implementação adotado revelou-se complicado, na medida em que evidenciou a falta de apoio por parte das estruturas internas nomeadamente, Departamento de Marketing e Vendas e falta de confiança por parte dos clientes.
This strategy will take forecasting and ordering out of the distributors hands and put it into the hands of Barilla. There were several inefficiencies due to demand uncertainty; there were long lead times and it was costly for Barilla to try and quickly produce their products. By becoming joint owner of this data both parties can benefit without the distributors losing some of their independence. Because of the highly specialized manufacturing parameters that were required to produce Barilla products, inflexible production lines did not allow for meeting demand that changes often. Also, it would essentially eliminate the current compensation system, meaning they would make less money. I think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners.
Besides the lack of a forecasting system there is a lack in communication between all segments such as manufacturing, distribution, marketing, and retailers. This was a radical change from the current and more traditional supply-chain setup where the distributors were not sharing any data and could place orders at will. In addition, Barilla held a 29% share of the Italian bakery-products market. The large buffers of inventory cost money and may conceal other problems in the process. This project is being undertaken to streamline Spa Works reporting structure for better internal… Words 2674 - Pages 11 are the costs of fluctuation? I would, however, force them to sign a third-party proprietary agreement before handing over my demand and sales data.
This is largely predictable fluctuation. Customer service Barilla has no visibility when it comes to plan and forecast in order to meet the customer demand. Quais os benefícios realmente obtidos? If implemented, Barilla can make better delivery decisions and improve its demand forecasts, be more effective in meeting end-customers needs, and more evenly distribute the workload on its manufacturing and logistics systems. In the long run it is supposed to create low inventory and provide maximum results, however, its implementation is not easy. Inc was not able to cope up… 1815 Words 8 Pages can not be ignored. Furthermore, it might be hard for some retailers to report daily sales simply because they might not have the point-of-sale technology at their stores. .