Barilla Case Study

What are the reasons for the increase in variability in Barilla’s supply chain?

Birilla SpA an Italian based pasta manufacturer is experiencing challenges on how to improve its variability in customer demand. As a result, inefficiencies in inventory and delivery quantities have increased costs. Barilla Spa, the largest Pasta manufactures in the world distributes 35 percent of its products in Italy and about and 22 percent in Europe. The company has evolved into a vertically integrated organization to expand its culture and value system of doing the best way to take care of its customers. This allows Barilla to provide more opportunities to control its inputs and more than 1000 products within its organization. The staff and departments heads cannot agree to what systems to adopt to improve overall operations at Barilla Spa. Giorgio Magialli, Barilla, director of logistics contend that an innovative Just-in-Time Distribution (JITD) model would improve overall costs, forecasting customer demands, and an ineffective production planning process in its delivery schedules and ordering system. The JITD model would get rid of the old-fashioned systems such as the sales and marketing trade promotion system in which promotions are passed on to buyer’s customers and did not benefit Barilla in these current times. The sales and marketing team make the argument that Barilla Spa vision should be based on its sales program to connect its distributors to build customer value and trust. Furthermore, the sales and marketing personnel say that the trade promotions system would not be able to operate smoothly with the JITD model.

How can Barilla cope with the increase in variability?

As leadership, customer demand, and guidance changes from the top down, individual focus and differing approaches toward fulfilling the mission impact the work force. With that said, Barilla has to change its distribution model. However, Barilla could address one of its demand variability by risk...