BARILLA SpA (A) Case Report
Executive Summary
In 1987, Brando Vitali, then Barilla’s director of logistics, had proposed an alternative approach to order fulfillment. Vitali envisioned an approach that would radically change the way in which logistics organization managed product delivery by introduction of Just In Time Distribution (JITD) system. The JITD system is designed to mitigate Barilla’s high stock rates, fluctuating demands by distributors and stock outs.
As the incumbent logistics director, -Giorgio Maggiali, I have the intention of implementing the JITD system in Barilla’s Supply chain. Albeit, I need to contend with both internal and external stakeholders’ resistance to the system’s implementation, get the top management buy–in and build trust among stakeholders by engaging them at different levels.
My decision is that Barilla should start the implementation of the JITD system with our selected distributors as a pilot, which would enhance visibility with distributors, improve service levels and increase internal efficiencies.
Background
Pasta is the staple food of Italians with an estimated 3.5 Trillion Lire market, which was traditionally hand produced but many varieties of pasta produced commercially have become readily available over time.
In the 1980’s, Italy’s pasta market as a whole was relatively flat, growing less than 1% per year but Barilla enjoyed an annual growth of over 21% (Exhibit 1). This was achieved when Pietro Barilla repurchased the company earlier sold by him to W.R. Grace Inc. in the 1970’s.
Leveraging on capital investments and organizational changes made in the past with improving market conditions, Pietro pursued growth through expansion of existing businesses, both in Italy and other European countries, as well as through acquisition of new, related businesses.
Barilla was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% sold in Europe. Barilla offered pasta under three brands:
In 1987, Brando Vitali, then Barilla’s director of logistics, had proposed an alternative approach to order fulfillment. Vitali envisioned an approach that would radically change the way in which logistics organization managed product delivery by introduction of Just In Time Distribution (JITD) system. The JITD system is designed to mitigate Barilla’s high stock rates, fluctuating demands by distributors and stock outs.
As the incumbent logistics director, -Giorgio Maggiali, I have the intention of implementing the JITD system in Barilla’s Supply chain. Albeit, I need to contend with both internal and external stakeholders’ resistance to the system’s implementation, get the top management buy–in and build trust among stakeholders by engaging them at different levels.
My decision is that Barilla should start the implementation of the JITD system with our selected distributors as a pilot, which would enhance visibility with distributors, improve service levels and increase internal efficiencies.
Background
Pasta is the staple food of Italians with an estimated 3.5 Trillion Lire market, which was traditionally hand produced but many varieties of pasta produced commercially have become readily available over time.
In the 1980’s, Italy’s pasta market as a whole was relatively flat, growing less than 1% per year but Barilla enjoyed an annual growth of over 21% (Exhibit 1). This was achieved when Pietro Barilla repurchased the company earlier sold by him to W.R. Grace Inc. in the 1970’s.
Leveraging on capital investments and organizational changes made in the past with improving market conditions, Pietro pursued growth through expansion of existing businesses, both in Italy and other European countries, as well as through acquisition of new, related businesses.
Barilla was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% sold in Europe. Barilla offered pasta under three brands: