Barilla

Executive Summary

My decision is to identify one DO (Organized Distributor) as a pilot project for JITD. Once this pilot project exhibits promising and positive outcomes, rollout the JITD model to all other DO’s and GD’s (Large Distributors).

In addition, JITD should be a company-wide initiative and not just pertaining to logistics. The reason being that upon its successful implementation, the model will eventually benefit the entire organization in terms of cost savings related to leaner inventories, better utilization of production equipment by optimizing planning and reduction in cost of moving inventories from CDC’s to DO’s and GD’s.

In essence, Giorgio Maggiali needs to get the top management closely involved in this initiative.

Table of Contents

Executive Summary 1

Table of Contents 2

Barilla SpA Facts and Key Assumptions 3

Issues and Impact Analysis 3

Root Cause Analysis 3

Alternatives / Options 4

Recommendation and Implementation 4

Monitor and Control 5

Appendix

Exhibit 8

Exhibit 13

Exhibit 5

Barilla SpA Facts

• Barilla SpA is the world’s largest past producer, manufacturing over 800 product SKU’s including, breads, pasta, cakes and croissants.

• The company holds 35% market share in Italy and 22% in the whole of Europe.

• Product mix consists of dry and fresh categories:

1. Dry products have a shelf life of 18 to 24 months and comprise 75% of sales.

2. Fresh products have a shelf life of 21 days (with bread being an exception at 1) and make up for 25% sales.

• Barilla has 25 production units all over Italy.

• It has 2 Central Distribution Centers and 18 company owned depots. The company distributes its products from the CDC’s to the 18 depots that distribute 35% of the products to small supermarkets. GD’s distribute the remaining products to supermarket chains and DO’s to independent supermarkets at a ratio of 7:3 (Exhibit 8).

• GD’s and DO’s order...