Barilla Spa Case Study

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Table of Contents

Executive Summary        2

Issues Identification:        3

Operational Environment        5

Root cause Analysis        6

Alternatives and/or Options        8

Recommendation        10

Implementation        10

Monitor and Control        12

Executive Summary

Barilla SpA, an Italian pasta was founded in 1875 by Pietro Barilla by opening a small shop in Parma Italy; Giorgio Maggiali, the Chief of Barilla’s Logistics Department is undergoing issues with manufacturing and distribution due to the variabilities in demand of the customers. Giorgio Maggiali, the Chief of Barilla’s Logistics Department, wants to apply the Just-In-Time-Distribution, also known as JITD, which was implemented and use by the former Director of Logistics Brando Vitali.  Maggiali’s idea of JITD has not been accomplished well with his customers and distributors as they do not want let go with their traditional method of placing orders. Along with this, there is also opposition to Barilla’s sales and marketing team within the organization.

The following analysis outlines helps to decide how the JITD System could help the distributors and help them increase the profit with decreased cost and inefficiencies. Centralized supply chain strategy will help Barilla SpA to also control the order with their partners and increase the profit margins. With that being said the following recommendation can also help influence the sales and marketing team to work together in making the JITD distribution structure a success.

Issues Identification:

Due to variations in the customer demand, there has been a problem improving the distribution system. With the disapproval of both distributors and the sales and marketing within the organization, it is becoming difficult to start the JITD to improve organizational distribution strategy.

Forecasting issues (long Term)

Distributors were using the outdated system of placing an order depending on the physical inventory sold. Their inventory order depended on the physical counting of inventory rather than modern methods using handheld devices or systems that were more accurate and precise.

Impact:  

Due to lack of consistent order history, it was difficult for Barilla to forecast the inventory production.

Trade Promotions (Short Term)

Barilla SpA ran promotion activities and these periods were called canvass period, these promotional activities ran for 5 weeks in length and had different promotions during each canvass period. During this period the distributor would order and stock up heavily to make use of the discount as a result demand would rise drastically for to produce more product.