Barilla Spa

Barilla SpA

Barilla SpA, a well-known and reputable pasta and bread product company from Italy was having problems with the distribution of some of their dry products thanks to demand fluctuations. Giorgio Maggiali, Director of Logistics at that time (late 80’s to early 90’s), had a lot of pressure to solve this issue, due to the fact it was a nightmare to distribute the workload on Barilla’s manufacturing and logistics process.

Maggiali was trying to start the program called JITD (Just in Time Distribution), proposed by his predecessor, but for the first couple of years Barilla’s customers were not willing to give up the authority to place orders as they wanted, nor did they wanted to share their sales information with Barilla.

This proposal had its pros and cons. On the Pro side, it gave Barilla the ability to distribute the work and logistics load in a more effective way, products will not have to be in warehouses for long periods (shortening shelf-life) and this way customers wouldn’t have to invest a lot of money on inventory.

On the downside, Barilla risks giving competitors an opportunity to fill the warehouse’s shelves with their products, making them lose interest in selling Barilla’s products. In the event of a strike, natural disaster, or something similar, Barilla might not be able to deliver orders in time, loosing money and credibility with their customers.

The JITD program had a few objections within the company’s sales and marketing departments. They pointed out some arguments, including: sales level would flatten, untimely delivery, distribution department is not ready, risk of giving our competitors more of the distributors' shelf space, and a few others.

I think the employees distrusted Maggiali due to lack of information about the program they had at the beginning, and they thought that because of JITD they were going to lose sales and the opportunity to encourage clients to purchase their products through special discounts.