Designing and Managing the Supply Chain (3rd Edition) chapter 5, problem 1dq - a. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits of this program? b. What conflicts or barriers internal to Barilla does the JITD program create? What causes these conflicts? As Giorgop Maggili. How would you deal with this? c. As one of Barillas customers. What would your response to JITD be? Why? d. In the environment in which Barilla operated in 1990. Do you believe JITD would be feasible? Effective? If so, which customers would you target next? How would you convince them that that the JITD program was worth trying? If not, what alternatives would you suggest to combat some of the difficulties that Barrilas operating system faces? e. Compare the JITD strategy developed by Toyota and others.

CHAPTER 5 The Value of Information Barilla SpA (A) unwilling to give up their authority to place orders as they pleased; some were even reluctant to provide the detailed sales data upon which Barilla could make Giorgio Maggiali was becoming increasingly frus- delivery decisions and improve its demand forecasts. trated. As director of logistics for the world's largest Perhaps more disconcerting was the internal resis- pasta producer, Barilla SpA (Societa per Aziont tance from Barilla's own sales and marketing organi- translates as "Society for Stockholders" and is inter- zations, which saw the concept as infeasible or preted as "Inc."), Maggiali was acutely aware of the dangerous, or both. Perhaps it was time to discard the growing burden that demand fluctuations imposed on idea as simply unworkable. If not, how might the company's manufacturing and distribution sys- Maggiali increase the chances that the idea would be tem. Since his appointment in 1988 as Director of accepted? Logistics, he had been trying to make headway on an innovative idea proposed by Brando Vitali, who had COMPANY BACKGROUND served as Barilla's director of logistics before Maggiali. The idea, which Vitali called just-in-time Barilla was founded in 1875 when Pietro Barilla distribution (JITD), was modeled after the popular opened a small shop in Parma, Italy, on Via Vittorio "just-in-time" manufacturing concept. In essence, Emanuele. Adjoining the shop was the small "labora- Vitali proposed that, rather than follow the traditional tory" Pietro used to make the pasta and bread prod- practice of delivering product to Barilla's distributors ucts he sold in his store. Pietro's son Ricardo led the on the basis of whatever orders those distributors company through a significant period of growth and, placed with the company, Barilla's own logistics in the 1940s, passed the company to his own sons, organization would instead specify the "appropriate" Pietro and Gianni. Over time Barilla evolved from its delivery quantities-those that would more effec- modest beginnings into a large, vertically integrated tively meet the end consumer's needs yet also would corporation with flour mills, pasta plants, and bakery- bute the workload on Barilla's manufacturing and logistics systems more evenly product factories located throughout Italy For two years Maggiali, a strong supporter of Vitali's proposal, had tried to implement the idea, but now, in the spring of 1990, little progress had been College. This case was written by Janice made. It seemed that Barilla's customers were simply Business School. Source: Copyright 0 1994 by the President and Fellows of Harvard H. Hammond of Harvard 143