Que1 what are objectives of Barilla, Distributors, and Sales representatives? Barilla 1.

Reduce Uncertainty and lead times through information centralization 2. Decision to go for vendor managed inventory JITD (Just in time distribution) 3. Focus on customer demand rather distribution orders 4. Get shipment data and current stock levels for each Barilla SKU 5. Decision making authority will be primarily with Barilla Distributor 1. Secure their decision making authority on inventory levels 2. Faster delivery of shipments within 36 hours of order placement 3. Reduce inventory levels in their warehouses 4. Additional margins for providing data due to additional overheads Sales Representative 1. Their authority should be preserved 2. Their commission should be maintained, because JITD will decrease their commission 3. Their responsibilities should not be reduced as currently they worked mainly on replenishing inventory levels and making promotion strategies through information collected from distributors and market research but JITD will get data so role of sales representatives will be minimal Que2 Propose solution acceptable to all parties 1. JITD system would have the following features: A. Elimination of promotions to reduce demand variability caused by batch ordering B. Everyday low pricing, to remain competitive C. More frequent deliveries with mixed-orders per FTL D. Demand forecast information made available E. Vendor-managed inventory at the store and distributor levels

2. Smoothen Production line Individual production lines for every Barilla product 3. Run a pilot for 1 cycle (3 months) paying for expense of data and see results 4. To reduce inventory levels at Barilla Inventory level depends on order quantity and lead-time. According to the case, CDC now holds one month inventory while DC and GC hold about 2 weeks, small shops over 2 weeks, supermarkets place order every day, which provide the distributors with plenty of information. Therefore it is possible to reduce the inventory by shortening the review period, say 3 days instead of current once per week. If the distributors inventory could be reduced to one week or so, the CDCs inventory will also have room for reduction 5. Increased Shelf Space for Distributors I. Barilla could make a deal with the distributors that the additional space is for Barillas new products only to avoid competitors taking space II. The improved delivery schedules will lead to a decrease in inventory enticing the distributors to take on more of Barilla's competitors' products. This is an opportunity for the sales representatives to sell the distributors on taking on more of Barilla's products to improve the selection they currently offer. 6. To improve discount policy I. Using aggregate volume promotion of one year quantity instead of quantity on each order + EDLPP (everyday low purchase price) promotion II. Instead of giving discounts for large order volumes, Barilla would give discount s t a b l e l o n g t e r m o r d e r s ( E D L P P ) . B y d o i n g s o B a r i l l a w i l l h a v e m a n y reliable long-term orders to meet market demands, and considerably reduce the variability in the supply chain 7. To get data from distributors I. Show them both the benefit (if we can work together) and drawback (if we dont work together) of JITD instead of pushing our plan) II. Make them feel that their authority will not be reduced Since each representative carries a portable computer for imputing the distributors orders, we could install a system by which more information at the distributor's warehouse

8. Solve problem of Sales representatives I.

level could be collected by the sales representative working at the front line. By doing so, the sales representative will still play an important role in the new system, meanwhile saves the distri butors work in implementing the JITD, and therefore encourages them to participate in JITD. We just need to get the distributors permission for releasing data, and our sales representatives will do the data collecting II. The role of sales representatives could also be defined as JITD customer relationship and development managers. Not only would they be selling Barilla products, but they would also be providing services that improve customers delivery program. The representatives can participate in the JITD program as the communication bridge between the company and the distributors helping to implement the JITD program 9. Improved Customer Relations Reduced inventory costs, higher service levels, improved fill-rate and decreased distribution costs would all lead to improved customer relations 10. In the long term, it is recommended that Barilla move to a single distribution system for both fresh and dry pasta to increase the cost effectiveness of joint replenishment. This however cannot be done until the supply chain can reduce the delivery time to a level that suits both products.