Supply chain Case Study Example | Topics and Well Written Essays - 500 words

Supply chain - Case Study Example He realized that both manufacturers and retailers were dealing with thinner margins due to market conditions. He wanted to cut costs out of the distribution channel without compromising service. The new approach towards logistics that Brando envisioned involved rather than sending products to the distributors according to their internal planning process, the company would analyze the distributor’s shipment data and send only what is needed at the stores. The solution proposed that the company take full control of its supply chain by becoming responsible for determining the quantities and delivery schedules. Brando believed that this new system would help everyone reduce inventory levels. â€Å"Each day each distributor would provide us data on what Barilla product it had shipped out of its warehouse to retailers during the previous day, as well as the current stock level for each Barilla SKU† (Hammond). Replenishing orders would be made by the company based on that data . The new proposed system was called just-in-time-distribution (JITD). The new JITD system met with resistance to change from the employees of the company. The sales and marketing department felt that the system would interfere with their job duties. Their responsibilities would be diminished if the new program was put into action. A conflict that the JITD imposed was that it would flatten the sales of the company. The company would not be able to adjust their shipments to changes in selling patterns or increased promotions. Implementation of the JITD system imposed the creation of a sophisticated relationship with suppliers that the company might not be ready to handle. The company would run the risk of giving up shelf space to the competition. The new system was susceptible to stockouts. The firm would not be able to run promotions that give incentives to the customers to purchase more. The new JITD system might be visualized by the distributors as a hassle due to the fact that the system