Barilla SPA (A) Case Solution

The distribution channel is also complex and instead of direct distribution products are sent to warehouses and then the distributor purchase products from them, this further increase the turnover time. Promotion was heavily dependent on discounts, where the distributors purchase in bulk, covering current and future demands that adds onto fluctuations as distributors already are with enough stock to cover demand. Last, but, not the least, the push and pull strategies are not congruent to yield maximum results. As, the sales persons strongly push the product at the time of promotion, while become sluggish afterwards. Other than that, it will decrease the inventory turnover time as stakeholders will be dealing more of real time. It will enhance operational efficiency and reduce costs for stakeholders.

2. What conflicts or barriers internal to Barilla does the JITD program create? What causes these conflicts? As Giorgio Magggiali, how would you deal with these? 

Introduction of JITD created unrest among many of the stakeholders internally and externally. First of them to raise voice against this plan was sales and marketing departments. The sales representatives felt that their responsibilities will be diminished. There were concerns about the flattening of the sales. Few of these personnel raised concerns about the organization’s ability to handle such complex operations and distribution. In other words, this relates to lack of infrastructure. Some felt threats of freeing distributor’s warehouses, which will be occupied by competitors, causing distributors to push competitor’s product. Not only these, there was concern on trade probability of trade promotions getting a setback. This way Barilla will lose much of products that it sold to distributors on basis of promotions.

Few were of the view that the company can suffer because of disruption on the supply process. This further added on the concerns of not being able to adjust shipments quickly to change in the selling patterns and promotional campaigns. Despite of all the glimmering plans and future results of JITD, there were still doubts about the cost benefits, because, with the decrease in DO’s stocks, Barilla will have to increase inventory for products that are not flexible with the production schedules. As, Maggiali, I would set up a detail plan to convince the distributors and build trust, by involvement of top management and setting up a prototype or successful implementation as an example.