Barilla Case Study

Root Problem

In a world where change has become the rule, Barilla is facing challenges to satisfy the demand of its customers. Founded in 1875, Barilla is the world’s largest pasta manufacturer. It sells a wide range of products, to a considerable number of retailers through distributors. Recently, the company faced demand fluctuations, which, due to a lack of accurate forecasting, negatively impacted its manufacturing and distribution system. Distributors use a system of replenishment ordering, without using any forecasting methods. Implementing the Just In Time Delivery (JITD) system would counteract the bullwhip effect the company experienced. Instead of distributors ordering products according to their schedule, Barilla would monitor the flows and take care of delivering the adequate quantities to its customers. This system only focuses on dry products sold through third party distributors.

Diagnosis, Benefits and drawbacks of the JITD program

Barilla created the JITD program for many different reasons. Exhibit 12 explains the difficulties the company has adapting and adjusting to the ever-changing pattern of its distributors’ demand. Not being able to forecast it spawned a block in the manufacturing and distribution system. By monitoring its distributors’ flows of orders, Barilla would be able to manufacture what is expected instead of arbitrarily producing one of the many products within its line. The increase of communication between all the levels of the distribution supply chain would decrease the uncertainty of Barilla on the products its needs to manufacture.

The program would carry benefits for both Barilla as a manufacturing company and its distributors. Thanks to the data received from its distributors, Barilla would be able to set up objectives and improve its manufacturing planning. This would lead to a decrease in manufacturing costs, which would result in lower selling prices to the distributors and final customers. This could be a definite...