Barilla Spa

Table of Contents

Executive Summary        3

Overview and History        4

Issues Identified        5

Environmental Analysis        6

Root Cause Analysis        6

Alternatives or Options        7

Recommendations        9

Implementation        9

Monitor and Control        9

Appendix        10

Executive Summary

With the growing pasta market, Barilla is faced with a challenge of accommodating the extreme order demand fluctuations of their distributors.

I identified some of the root cause of the fluctuations and suggested a number of alternatives which includes Brando Vitali’s JITD (orders managed by the vendor), Warehouse expansion (increase inventory warehouse), Outsource products (third party supply), Remove incentives (less trade promotions), and order prioritization (process bigger orders first).

Based on the decision criteria, the most effective choice is still the JITD. It solves a lot of the underlying problems by controlling order levels from the start. JITD won’t be able to work properly without an accurate report from distributors. Data are being electronically to Barilla everyday to minimize forecasting inaccuracy.

The implementation for the system details how the process flows cycle from distributors to Barilla HQ to the Plant and back to the distributors.

Monitoring and control details the set ups of measurements on how to check consistency and effectiveness of JITD over a period of time.

Overview and History

Barilla first opened shop in Parma, Italy on 1875 and was owned by Pietro Barilla. Beside the shop was a small place where Pietro makes the pasta and bread. Barilla eventually grew with the help of Pietro’s son, Ricardo, and passed the company to his own son, Pietro and Gianni, on 1940s. Barilla grew significantly and was able to expand in their vertical integration by constructing flour mills, pasta plants, and bakery-product factories located throughout Italy.

        By 1960s, the Barilla brothers differentiated their company among competitors by using high quality products and innovative marketing programs. They were successful in increasing their sales and to support their growth, they decided to construct a 1.25 million sqm state of the art pasta plant in Pedrignano. This made the Barilla brothers deep in debt. In 1971, they sold the company to an American multi-national firm, W.R. Grace, Inc. Grace brought professional management practices to the company. By 1979 due to difficult economic conditions, Grace wasn’t able to recover the acquisition cost and sold the company back again to the Barilla brothers. The Barilla brothers were able to improve the company with the changes W.R. Grace, Inc. made. Throughout 1980s, Barilla were able to grow a whopping over 21% annually.