Barilla Spa Case Study

Executive Summary

Barilla SpA, an Italian pasta manufacturer, is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. Giorgio Magialli, the Director of Logistics at Barilla wants to implement a Just-In-Time Distribution (JITD) System as a solution.

Barilla case is a demonstration of bullwhip effect in real business situation – amplified variation in demand as one move up the supply chain. The case study has been organized as following:

Firstly, the report provides a brief Introduction on Barilla’s business background. Next, it analyses in details on the problem Barilla faced – demand fluctuation, on the factors caused demand fluctuation and the impact of the demand fluctuation problem. Furthermore, it studies on the proposed solution – JITD System with the resistance from internal and external side faced by Barilla during the implementation of JITD System. Lastly, the report presents some recommendations to overcome resistances in Barilla.

Introduction

Barilla SpA, an Italy based company, is the world’s largest Pasta manufacturer. It has a 35% market share in Italy and a 22% market share in Europe. Barilla has a complex distribution network consisting of Grand Distributors (owned by large supermarket chains), Organized Distributors (independent third party distributors) on top to its own distribution centers. With such a complex network and sophisticated distribution requirement for “Fresh” and “Dry” products, Barilla is experiencing amplified levels of variability in demand which result in operational inefficiency and increased manufacturing, inventory, and distribution costs.

Brando Vitali, ex-Director of Logistics in Barilla, has proposed a Just-In-Time Distribution (JITD) system to counter this demand variation. This JITD system requires distributors to share their sales data with Barilla, who would then forecast and deliver appropriate amounts of products to distributors effectively....