Case: Barilla Spa (A) Harvard Case Solution & Analysis

Case: Barilla Spa (A) Case Solution

Diagnose the underlying causes of the difficulties that the JITD program was created to solve.What are the benefits and drawbacks of this program?

barilla spa case solution

barilla spa case solution

  • The company is facing difficulties from the demand fluctuations.
  • Therefore, the company considered the alternative which would provide the company better decision making.
  • Although the pasta consumption is the consistent annually, the demand variation would leadto the market player’s ineffective supply chain.
  • This sudden sharp increase in demand requires addition cost for the operating such as overtime. (Selko, 2008)
  • On the other hand, an unexpected decrease in demand would result in higher variable cost due to less production.
  • Pasta is a perishable item, and the customers have concerns over the quality of pasta, as well as the unexpected increase in demand requires higher production, which reduces the quality.
  • Variation in demands would lead towards inefficiency in the manufacturing processes, and there might be lead time issues.
  • Inventory holding cost and operational cost would increase, which would reduce the company's profitability just because of inefficiencies in operations.
  • Production cycle would be damaged significantly, and the availability of the product will be reduced.
  • Distributors have difficulties in carrying a large number of stock keeping units to hold the finished goods.
  • The benefits of Just in Time distribution would enable the company to not store massive inventory, which would result in reducing corporate cost.
  • The company can easily manage its outputs so that waste finished goods can be reduced.
  • This system does not require a substantial cost on upfront, in fact, it requires the strategic process.
  • Although the system has a drawback as well, however the benefits are higher than its price.
  • The disadvantage includes that the company might go out of stock in reducing the inventory level.

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

  • The new system threats the responsibilities of the sales representative as they might become less effective for the company.
  • Sales representative resist the new regime as it would reducetheir duties and tasks.
  • The company would face the difficulty of stock out due to the new system which reduces the ability for frequent shipments.
  • The company would not be able to do trade promotion with the new system as it is abarrier for that.
  • The current structure of the company is incompatible with the implementation of new Just in time distribution system. (GANGADHARAN, 2007)
  • The management of the company has doubts over the cost reduction of the new system.
  • The question arises whetherthe new system is value creating or value-destroying activity for the enterprise.
  • The distributors of the company are not taken into account before implementation of new system.
  • They might resist to the new system because they are unfamiliar with the system.
  • The supermarket and small independent stores might resist because they think thatthe company’s bargaining power would increase due to the new system.
  • Distributors have doubts over the effectiveness of the new system.
  • The company should convince all the stakeholders, which include internal and external, before implementing a new system......................
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