1. Barilla: Just In Time Distribution, Just in Time Facilitated by Team 7 Manuel Atanacio Melissa Debach Cosmo Kapoor Wayne Leonard Molly Neznanski Allen Sajedi

2. Problems at Barilla: Illustrated

3. Problems at Barilla: Business High stock out rates Long lead times Inappropriate Incentives –Bulk orders –Purchasing not sales

4. Multiple Pasta Varieties Cumbersome Machinery Inaccurate Forecasting Fluctuating Demand Problems at Barilla: Production

5. 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

6. Alternatives 1)Maintain status quo 2)Production changes to drying process 3) Implement JITD with existing network 4)Obtain new network of distributors - implement JITD

7. 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

8. 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

9. Recommendation: = Success - greater knowledge of customers - more targeted promotions - reduced stock out rates - lead time and cost reduction Alternatives 3 & 4 Existing Network + New Network - existing relationship - “blank slate” - system education - ground up - build trust - system leaders

10. Action Plan: Phase 1 -Executive commitments -Barilla -Sales and Marketing Discussions - JITD as a sales tool - Distributor recruitment - Relationship management

11. 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

12. 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

13. Collaborative Planning, Forecasting and Replenishment Process Model -Establish Partnership Parameters - timing goals - performance metrics - procedures - Joint Business Plan (Policies/Guidelines) - strategic decisions - information sharing - Create joint forecast model - exceptions - forecasting rules - order quantities Key Success Factor 2 Common Parameters - Requires collaboration - Information sharing - Joint forecasting - Common performance metrics - Address customer needs - Proactive decision making

14. Restructure Incentives Action Plan: Phase 3 Current Incentive Volume Discount Promotional Pricing New Incentive Accurate Orders Sell out Bonus Milk-run Delivery Uniform Wholesale Pricing Buy back clauses Negative Behaviors Frequent Stock Outs Unpredictable Demand Positive Behaviors Information Sharing Varied Shipments Frequent Ordering Order by forecasts

15. Action Plan: Phase 4 Eliminate the Bullwhip Effect: - Greater information sharing - Price stabilization - Gaming elimination - Echelon inventory

16. Conclusion - Commitments - Education - Incentive alignment - Relationship building - Implementation of JITD

17. Questions?