Bariia Spa

Barilla SpA (A)

A Case for Vertical Integration

Jim Wells

February 26, 2014

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Table of Contents

Executive Summary

3

Introduction

4

Issues Facing Barilla

4

Environment and Root Cause Analysis

5

Analysis and / or Options

9

Recommendations and Implantation

11

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Executive Summary

Barilla will move forward with the implementation of Just in Time Delivery (JITD). The implementation strategy takes a strategic integrated supply chain team approach. Small integrated teams made up of key management, marketing, sales, operations, and distributors will collaboratively develop the metrics to monitor and measure JITD implementation. The program is expected to take two years to be fully operational. A preliminary review is set at the six month stage with adjustments as required to ensure key performance targets of reduced order cycle time, decreased stock outs, and better inventory throughout the distribution channel are being met. JITD implementation will address the key areas people, logistics infrastructure, and marketing and information systems simultaneously but with immediate, short term and longer term action plans. Measurement metrics are in place for each of the three identified key areas, teams have been assembled, lesson learned have been communicated and JITS is ready to launch. As Barilla has invested significant time and resources over the past few years in JITD a complete JITD system implantation audit will take place at the 1 year anniversary. A go – no/go decision will be made at that point.

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Introduction: Barilla is world class vertically integrated pasta products manufacturer with sophisticated production and research and development facilities. A strong brand image promoted as a premium Italian pasta has resulted in a dominant market position with over one third (35%) of the pasta sold in Italy and 22% of all sales in Europe. Sales for 1989 were 2,068 billion lire with as estimated 13.5%...