Barilla Spa

Issue:

Barilla SpA, an Italian pasta manufacturer, is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. Since 1988, Barilla SpA, world’s largest pasta manufacturer has been trying to implement Just-in-Time Distribution (JITD) , but no significant progress has been made in last two years. The management at Barilla SpA is faced with the challenge to decide whether JITD is feasible in the environment that the company is operating, if yes, what kind of customers it should target and how to convince them to accept JITD.

Overview:

Barilla was founded in 1875 and the company went through a lot of changes and developments throughout the century. By 1990, Barilla became the largest pasta manufacturer of the world and evolved into a large vertically integrated corporation. The company is organized into seven divisions: three pasta divisions, bakery products division, fresh bread division, catering division and international division. The entire product line is divided into two general categories: Fresh products and Dry products.

Manufacturing: Barilla’s pasta plants were specialized by the type of pasta produced in the plant. Even within the same family of pasta products, individual products were assigned to plants based on the size and shape of pasta. In any pasta plant, Barilla followed a carefully chosen production sequence that minimized the incremental changes in Kiln temperature and humidity to minimize the changeover costs and keep the product quality high. The main idea behind manufacturing strategy is to squeeze out the variations from the manufacturing processes resulting in large quantities and low manufacturing costs. Due to sequencing process, lead times may be higher for the products that are well behind in the production sequence.

Distribution:

The products were first shipped from the manufacturing unit to one of the two Barilla central distribution centers (CDCs): the Northern CDC...