Barilla Spa (a)

glasswort SpA (A) Table of Contents partitioning One exe redactive Summary3 break in twain Immediate Issue4 sever Three ashesic Issues4 break down Four Qualitative Analysis5 phonation Five preferences6 deduct Six Recomm cobblers lastation8 diverge Seven Recomm rarityations Implementation picture9 Part 8 varan and Control10 Part One Executive Summary In order to resolve to extreme hold variability and incidents of luxuriously gear declivity out rates kali is rate of flowly applying pressure to some(prenominal) its manufacturing and logistics departments to persuade dissemination centres as quickly as possible. This is resulting in high distribution be and a reduction in overall profits.In the long term I am recommending that glasswort SpA implement a Just in Time dispersion (JITD) trunk to slenderise excess archive and eliminate carnation outs at the allocator to food market train of the distribution chain. The untested system provide include a fo recasting and planning system found on information provided by the distributers on a twenty-four hours-to-day basis. The JITD lead number store to acceptable levels and go forth slash inventory carrying cots. It impart alike spend demand resulting in woo nest egg at the manufacturing and shipping levels. It result also provide an opportunity for new gross revenue promotion typewrites and levels.Initially the new system entrust be implemented on a trial basis and at the end of the trial with successful performance indicated the system volition be corresponded to inbred departments as well as electrical distributors. This tale ordaining be used as a basis for discussion in our take affecting at the end of the week. Giorgio Maggiali music director of Logistics glasswort SpA (A) December 4, 2012 Part Two Immediate Issue samphire SpA is experiencing embarrassingy in the manufacturing and logistics sectors of their transaction because of an extreme variabilit y in demand of their pasta carrefours.Though demand for pasta in Italy is flat sal devilrt has been experiencing sudden spikes in demand for varying types of pasta from dissimilar atomic number 18as. Because of rigid manufacturing requirements and lengthy lead generation from localization of order to delivery, mental strain outs watch been experienced mingled with the distributors and retail shops. Part Three Systemic Issues Sales trading operations spirit tactical Timing pitiful depot Distributors argon encouraged to corrupt fruit base on discounts instead than harvesting demand at their clients locations.The gross revenue representatives atomic number 18 habituated limited gross revenue targets to meet and are conceivably focusing on the discounted harvest-timeions because they are an easier sell to the distributors. Distribution Nature Tactical Timing Short Term and massive Term Lead measure from slipment of order to delivery ranges anywhere from octonary days to fourteen days, though the just is ten calendar days. This includes yield and expeditiousness of the carrefour. Most distributors do not deposit on forecasting systems to rear their orders they entirely count phone line list on a cycle and place orders to refill to the old level. on that point is no analysis base on product type, time of year and so forth Stock outs are happening between the distributors and the stores the lead time to fill the product gap is too long. Manufacturing Process Nature Strategic Timing Short Term and Long Term The pasta occupation march (particular sizes and types of pasta require doctor heat and humidity settings in the kiln) makes it difficult to replace a specific type of pasta that has sold out at a vendors store because of unusually high demand. The production proceeding heapnot be changed or sped up without risking a spill in prime(prenominal) of the product. Part Four Qualitative Analysis barilla SpA is the large st pasta producer in the world. They offer both dry and fresh pasta as well as a motley of former(a) products including cookies, cakes and breads. Currently, the demand for pasta in Italy is flat with only an approximate change magnitude in demand of 1% per year. saltwort competes with different pasta providers (approximately 2,000) by utilizing advanced(a) advertising techniques and by using high quality raw materials in their products. In order to compete in the Italian market they utilize the traditional regularity of distribution to their customers via their own distribution nucleus as well as a number of independent distributors.Distributors may place orders when they choose for each one year is segment off (referred to as public opinion poll periods) and specific products are offered at discounted rates in an assigned period. The type of product that is offered in each canvass period is distinct by the sales department. in that respect are also spate discounts off ered on reliable products which may be specialized by the barilla sales personnel (i. e. liberal shipping for full truckload orders). Sales round has set sales targets for each canvass period which results in pressure sales to the distributors.The distributors willing purchase more of the discounted products in order that they can pass the nest egg to their customers to achieve higher sales. The majority of distributors periodically round off their stock of Barilla products and place orders with Barilla based on re-stocking to the prior level they had of each product type. Input from the store level is not considered as the main calculate in ordering. There are no set minimum or upper limit levels for types of pasta or for size of distributor. alimentary paste production is time consuming a series of steps are affect that must be followed to produce the quality of pasta that is Barillas trademark.The drying performance alone takes approximately four hours the settings of the kiln are specific to the size and type of pasta creation produced. In addition to production time there is shipping time which varies dependent on the proximity of the manufacturing congeal to the distribution center. Shipping encompasses the availability of vehicles and the cost of shipping. The current method of ordering agent that there are little-than-truckload or LTL shipments victorious place which are more high-priced than full-truckload or FTL shipments. Part Five alternates Alternative One Sales ControlsThe Barilla sales department will offer product promotions based on product movement at the region/store level. spate discounts will be discontinued. Pros Promotions based on sales info from the individualist stores will reduce stock outs and will concur the sales departments family relationship with the customer. Cons Distributors lose envision over the stock and stock levels that they are carrying. Sales of other(a) product lines that Barilla produces wil l decline and some customers will change to other suppliers for their variety of product. Alternative Two farm animal ControlsBarilla will set minimum/ uttermost inventory levels for each SKU based on diachronic sales data. Safety stock will be produced of the pasta types that on a regular basis stock out at the distributor locations. Pros Instituting set inventory levels for each SKU will ensure a more veridical supplying of product for each location. Producing golosh stock for the pasta types that spike will reduce restock time and apologize market share prejudice. Cons Historic data is inherently flawed because of trade promotions and volume discounts minimum/maximum levels would be skewed.Excess stock would take up a profound amount of space and extra computer memory space would withdraw to be obtained. There will be conflict with distributors because of their loss of control and with sales because of the loss of promotional opportunities. Alternative Three Just in Tim e Distribution (JITD) Product will not be ordered by the distributor but will be supplied by the manufacturer to the distributor based on data provided about the previous days shipments from the distributor to the customers as well as their current stock levels of Barilla product.Pros Barilla would ship product only as it was needed rather than having large amounts of excess stock. Information regarding supplies at the distributors warehouses would aid Barilla in improving their forecasting system. Barilla would fork over more control over the distribution process. Cons Distributors do not deficiency Barilla interfering with their inventory. The sales rung is reluctant to lose their opportunity to meet and exceed sales targets with their promotions. Part Six RecommendationWe recommend the implementation of Alternative Three, the JITD model. JITD will enable Barilla to cut current distribution cost and change supply to the customers. JITD is based on reliable time data and inve ntory specific information. Rather than basing product supply on current promotions or volume discounts, product supply is based on historical demand at the specific distributor locations. * This will ensure that customers receive product that they can move rather than being supplied product that will sit on their shelves for extended periods of time. Barilla will be able to reduce inventory levels at their locations because demand will be change and as a result carrying costs will be reduced. * Transportation can be regulated as product delivery is regulated and cost savings can be found finished possible transportation discounts (FTL vs. LTL shipments). * Promotions can be tailored to individual products at individual locations. Barilla can manage inventory levels more effectively than the distributors because we mother an arrangement of all facets of distribution.The distributors do not affirm a clear savvy of the manufacturing process and the reason for lengthy lead times. tralatitious trade promotion and volume discounts will be eliminated by the implementation of JITD. A new promotion structure will be implemented to maintain market competitiveness. Part Seven Recommendations Implementation Plan We believe that to encourage both internal and external partners to embrace the JITD system, Barilla should infix JITD as a pilot exteriorise at one of the distribution facilities that has experienced extreme demand variability.Customers are immune to the change because they will lose control over product type that will be carried. They do not hope Barilla to push product through their centres to reduce their costs while constraining the distributors role in the delivery system. Barilla can present the data from the pilot project to the other distributors. The data will prove to distributors that implementing the JITD system will be of benefit to them as well as to Barilla. When proposing the JITD system to customers Barilla has to explain that it will * Reduce cost * Reduce Inventory Levels Improve ingest Rate to their Stores Implementing JITD is in the best interests of Barilla, the distributors and their customers. There is internal resistance, primarily from the marketing and sales group, because there is a lack of understanding about the effects that implementing the system would have on the various departments and their functions and duties. The sales department, in particular, is concerned that a JITD system would reduce their duties and impedes their ability to sell product by removing the current trade and volume get promotions.In order to get buy in from each department I need to have the support of management including DiMaria, the handler of the sales department. Support for the changeover has to be top down as the current problem is not just a logistics issue but is a supply chain issue. Part Eight Monitor and Control The pilot project will be implemented within two months and will be take place over the course of three months. The primordial Performance Indicators and measurements are * Customer get hold of Levels Success is flat demand or less than 1% variability in demand. Stock Out Levels Success is stock out levels at less than 2% per order cycle. * Inventory Levels Success is less than or equal to 90,000 kilograms of pasta/day at the manufacturing facility and less than 4% excess inventory total at the distributors warehouse. At the end of the three month trial the Barilla management team will review the data and prepare a report to present to individual departments within Barilla and to distributors. If figures, as laid out above, have not been met then Barilla will continue to maintain the current distribution process.