Barilla Case Analysis

Barilla Spa Written Case Analysis

Problem Statement Definition:

Barilla needs to modify its logistics, manufacturing and distribution systems to create more efficiency relative to its size, reduce costs, and create higher profit. The current manufacturing and distribution complexities create instability and fluctuations in the demand and delivery of orders with long lead times. This increases customer frustration, costs, reduces value and erodes profitability.

Situation Analysis:

Barilla’s logistics management is frustrated by their inability to convince distributors of the benefits of a just in time distribution (JITD) methodology of pasta manufacture and order fulfillment. Barilla apparently believes that its organizational processes are running optimally but for the fact that their forecasting and subsequent planning cannot predict and account for demand by distributors in order for them to optimize and moderate their product manufacturing.

The Barilla logistics and production system has created a silo within its own supply chain. They have not yet realized that their own processes are broken which cannot be fully remedied by forcing demand on distributors to resolve their order fulfillment and production issues. Their desired JITD implementation does not consider the value-add to customers nor does it consider their supply chain inefficiencies as a whole.

Barilla is not in a position to exploit its distributors, and needs to work with them rather than force change upon them. They have not yet capitalized on other opportunities for improvement in the own process and cannot success with a JITD initiative until they address internal plant and distribution inefficiencies.

Barilla maintains several plants across Italy, however, has only two central distribution centers. Their manufacturing and distribution model looks like an upside down pyramid with a many plants and different types of distributors that don’t seem to have the skills or...