Barilla Spa: Pasta Distribution Analysis
Case Memo – Barilla SpA Student #: 68979111 Giorgio Maggiali, as director of Logistics for Barilla SpA, was acutely aware of the growing burden that demand fluctuations imposed on the company’s manufacturing and distribution system. In order to address this issue, he proposed the innovative idea of Just-‐in-‐Time Distribution (JITD), but was faced with resistance from both inside Barilla and from customers. This difficult situation raised the question of whether JITD is the right approach, and if yes, how should it be implemented. Pasta is the core product for Barilla. Before diving into the analysis of the JITD approach, we first take a closer look at the product mix and supply chain, and uncover the following facts:
• Lack of accurate and timely demand information from downstream; • Various type of pasta and packages result in 470 different packaged SKUs; • Sell through various distributors/agents to independent shops, supermarket chain, and independent supermarkets. Each level of distribution keeps its own inventory; • Long lead time for distributors, 1-‐2 weeks to receive delivery from order; • Heavy reliance on frequent trade promotions and incentives on FTL; • Sales persons are evaluated upon
• Lack of accurate and timely demand information from downstream; • Various type of pasta and packages result in 470 different packaged SKUs; • Sell through various distributors/agents to independent shops, supermarket chain, and independent supermarkets. Each level of distribution keeps its own inventory; • Long lead time for distributors, 1-‐2 weeks to receive delivery from order; • Heavy reliance on frequent trade promotions and incentives on FTL; • Sales persons are evaluated upon