Brilla

Barilla SpA (A) Case Study

April 19, 2012

Barilla SpA (A) Case Study

Introduction

Barilla’s high stock out rates along with large average inventory numbers are the main reasons why Maggiali is looking to continue on with Vitali’s dream of implementing the Just In Time Distribution system. However, faced with great external resistance to its introduction, Magialli must look to top management to hop on board and facilitate its acceptance among all partners in the supply chain. Using internal distributors as experiments will allow Barilla to showcase better stock out and inventory results. By doing so, Barilla can gain the acceptance and approval of other distributors. With everyone participating in the JITD, Barilla will be better able to forecast demand and not over react to movements at the consumer level.

Problem Statement

Giorgio Maggiali, the current director of logistics for Barilla SpA, faces much resistance when he tries to implement a new manufacturing concept called Just-in-Time Distribution (JITD).

Initially, this idea was proposed by the prior director, Brando Vitali, but is heavily supported by Maggiali as well. Because of the existing structure in the organization, fluctuations in demand at the end-user/customer level cause the whole system to react adversely. The result is an excess safety stock at all levels of the supply chain, leading to extra costs. This is commonly referred to as the bullwhip effect. Due to the resistance Maggiali faces, he must make a decision on whether or not the JITD is right for Barilla SpA and how to implement it with the unsupportive partners in the supply chain. The external resistance plays a large factor in why Maggiali is unable to introduce the JITD. There are many unconvinced distributors that are unwilling to share their warehouse data. Also, they perceive that Barilla is trying to take power away from DC purchasers, and since they do not know too much about the JITD, they...