Transcript Barilla
Barilla: Just In Time Distribution, Just in Time Facilitated by Team 7 Manuel Atanacio Melissa Debach Cosmo Kapoor Wayne Leonard Molly Neznanski Allen Sajedi Problems at Barilla: Illustrated Problems at Barilla: Business • High stock out rates • Long lead times • Inappropriate Incentives – Bulk orders – Purchasing not sales Problems at Barilla: Production • Multiple Pasta Varieties • Cumbersome Machinery • Inaccurate Forecasting • Fluctuating Demand Key Issues Manufacturing & Production Process - Equipment limitations - Production delays - Costly, time consuming and inefficient Forecasting - Low volume production - Seasonal demand - Low margins - High real estate costs - Requires quick turns, minimal inventory Alternatives 1) 2) 3) 4) Maintain status quo Production changes to drying process Implement JITD with existing network Obtain new network of distributors implement JITD Alternatives cont’d 1) Maintain Status Quo - stock out levels remain high - demand forecasting inaccurate - long lead times - costly & inefficient 2) Production Changes - alter drying process - variety agility - costly & slow to implement - maintain automation - maintenance friendly Alternatives 3) Implement JITD: Existing Network - focus on education - relationship improvement - quick implementation - established network 4) Implement JITD: New Network - “blank slate” - trust & commitment - costly - slow distributor acquisition Recommendation: Alternatives 3 & 4 Existing Network + - existing relationship - system education - build trust New Network - “blank slate” - ground up - system leaders = Success - greater knowledge of customers - more targeted promotions - reduced stock out rates - lead time and cost reduction Action Plan: Phase 1 - Executive commitments - Barilla - Sales and Marketing Discussions - JITD as a sales tool - Distributor recruitment - Relationship management Action Plan: Phase 2 Sales and Marketing: Educate Existing Distributors: 1) Cultivate relationships 2) Benefits of JITD 3) Reducing the Bullwhip Effect 4) Triple-A Supply Chain 5) CPFR Model Recruit New Distributors 1) Embrace JITD methods 2) System leaders 3) Triple-A Supply Chain 5) CPFR Model Key Success Factor 1 Commitment to: Triple-A Supply Chain - Agility of Information Sharing - Adapt to address customer needs - Alignment of common interests/values - risk mitigation - cost reduction - optimized customer satisfaction Key Success Factor 2 Common Parameters Collaborative Planning, Forecasting and Replenishment Process Model -Establish Partnership Parameters - Requires collaboration - timing goals - -Information sharing performance metrics - -Joint forecasting procedures - Common performance metrics - Joint Business Plan (Policies/Guidelines) - Address customer needs - strategic decisions - Proactive decision - information sharingmaking - Create joint forecast model - exceptions - forecasting rules - order quantities Action Plan: Phase 3 Restructure Incentives Current Incentive Negative Behaviors Volume Discount Frequent Stock Outs Promotional Pricing Unpredictable Demand New Incentive Positive Behaviors Accurate Orders Information Sharing Sell out Bonus Varied Shipments Milk-run Delivery Frequent Ordering Uniform Wholesale Pricing Order by forecasts Buy back clauses Order by forecasts Action Plan: Phase 4 Eliminate the Bullwhip Effect: - Greater information sharing - Price stabilization - Gaming elimination - Echelon inventory Conclusion - Commitments - Education - Incentive alignment - Relationship building - Implementation of JITD Questions?