BARILLA Spa Case study
CASE STUDY BARILLA SpA (A)
Report on Supply Chain Inventory Management
TABLE OF CONTENTS
Executive Summary 3
Issue Identification 4
Issue Identification & Root Cause Analysis 5
Alternatives and options 7
Recommendations 9 Implementation 10
Monitor And Control 11
EXECUTIVE SUMMARY
Barilla SpA (Barilla), is an Italian largest pasta manufacturer in the world manufacturer that sells pasta to retailers largely through third-party distributors. Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company. This fluctuation in demand, are forcing the CDCs to maintain a higher level of inventory. The proposed new system, Just-In-Time Distribution (JITD), is the solution suggested to resolve the demand fluctuation issues and lower costs. This new process would move forecasting and shipment allocation responsibilities to Barilla rather than allowing each distributor/retailer place the order amounts separately. This approach has both internal and external complications as there is much resistance from both within the company and from the suppliers and distributors.
Implementing the JITD is a good idea for a number of reasons. This will streamline the information flow, reduce uncertainty in demand , reduce the lead time, and decrease both finished and raw material inventory, thus making the system efficient and reducing the overall cost. A good plan would be for Barilla to start by running a pilot test within its own depot then with 1 or 2 distributors and use the results of the test regarding the cost savings and improvement in supply chain efficiency to convince other distributors about how beneficiary will be to all by implementing JITD.
ISSUE IDENTIFICATION
Immediate issue:
The main issue in this case is the fluctuating demand imposed on Barilla’s manufacturing and
Report on Supply Chain Inventory Management
TABLE OF CONTENTS
Executive Summary 3
Issue Identification 4
Issue Identification & Root Cause Analysis 5
Alternatives and options 7
Recommendations 9 Implementation 10
Monitor And Control 11
EXECUTIVE SUMMARY
Barilla SpA (Barilla), is an Italian largest pasta manufacturer in the world manufacturer that sells pasta to retailers largely through third-party distributors. Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company. This fluctuation in demand, are forcing the CDCs to maintain a higher level of inventory. The proposed new system, Just-In-Time Distribution (JITD), is the solution suggested to resolve the demand fluctuation issues and lower costs. This new process would move forecasting and shipment allocation responsibilities to Barilla rather than allowing each distributor/retailer place the order amounts separately. This approach has both internal and external complications as there is much resistance from both within the company and from the suppliers and distributors.
Implementing the JITD is a good idea for a number of reasons. This will streamline the information flow, reduce uncertainty in demand , reduce the lead time, and decrease both finished and raw material inventory, thus making the system efficient and reducing the overall cost. A good plan would be for Barilla to start by running a pilot test within its own depot then with 1 or 2 distributors and use the results of the test regarding the cost savings and improvement in supply chain efficiency to convince other distributors about how beneficiary will be to all by implementing JITD.
ISSUE IDENTIFICATION
Immediate issue:
The main issue in this case is the fluctuating demand imposed on Barilla’s manufacturing and