EXECUTIVE SUMMARY Barilla SpA‚ world’s largest manufacturer of pasta based in Italy is experiencing extreme demand variability resulting to operational inefficiency and increased cost. To combat the key issues stated my decision is to implement the Just In Time Distribution (JITD). This new system‚ contrary to current system Barilla has will eliminate Bullwhip effect and stock outs by having centralized information‚ there will be data transparency between Barilla and distributors. Distributors will
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BARILLA CASE REPORT Table of Contents Executive Summary Part 1 Executive Summary Issue Identification Part 2 Fundamental Issues Part 3 Systematic Issues Environmental & Root Cause Analysis Part 4 Qualitative and Quantitative Analysis Alternatives and or Options Part 5 Alternatives Recommendations Part 6 Recommendations Implementation Part 7 Recommendations and Implementation
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Executive Summary Barilla SpA‚ an Italian pasta manufacturer‚ is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. In order to bring things back in order and to improve margins‚ Giorgio Magialli‚ the Director of Logistics at Barilla wants to implement a Just-In-Time Distribution (JITD) system that was proposed by his predecessor Brando Vitali. This system is entirely different from the existing setup and is being opposed by both
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Homework 2 Barilla Case Reading 1.Is there any evidence that Barilla faces the bullwhip effect? If so‚ what causes of the bullwhip effect are present? Yes‚ there are some evidences that Barilla is facing the bullwhip effect. The following causes are presented as below. 1) Demanding forecast. Since safety stock‚ as well as the base-stock level‚ strongly depends on these estimates‚ the user is forced to change order quantities‚ thus increasing variability. Lead-time. It is easy to see
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BARILLA CASE STUDY Causes that led to the JITD idea: Fluctuating demands from the retailers and the burden it caused on the company’s manufacturing and distribution system. The problem with the fluctuating demand is during the period of high demand the manufacturer should have the capability to increase the supplies else the backlog will increase. On the other hand when the demand decreases it will be expensive to store the excess inventory. A problem at one point in the supply chain will be translated
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Barilla Case Study There are some issues currently faced by Barilla. One is that demand fluctuates extremely because distributors order weekly and it is hard to predict the demand on a weekly basis. Another is that there is a significant pressure to manufacture because lead-time and perishability of product vary so much. It’s very hard to speed up the process because each type of pasta requires specific heat and humidity level to dry them properly. In addition‚ Barilla has to make both dry
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SUMMARY Barilla SpA‚ an Italian manufacturer and world’s largest pasta producer that sells to its retailers largely through third-party distributors‚ experienced widely fluctuating demand patterns from its distributors during the late 1980s and Barilla suffered increasing operational inefficiencies and cost penalties. Brando Vitali‚ Barilla’s ex-Director of Logistics‚ proposed a Just-In-Time Distribution (JITD) system to counter this demand variation. This system required the distributors to share
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Barilla SpA Case Table of Contents Executive Summary 2 Issues Identification 3 Environmental and Root Cause Analysis 3 Alternatives or Options 4 Recommendation and Implementation 5 Monitor and Control 6 Conclusion 6 Executive Summary 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
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Executive Summary Barilla SpA is a world largest past manufacturer has experienced a phenomenal growth. The company had pasta share of 35% in Italy and 22% in Europe‚ plus 29% in Italian bakery product market(page 2 case) However‚ it began taken a tall on Barilla’s “manufacturing and distribution system” (page 1 Case). Without having proper data and control over the orders the company experienced wide fluctuations in demand. As a result Barilla experienced bullwhip effect where demand forecast
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volatility is Barilla’s trade promotion strategy‚ which includes price‚ transportation‚ and volume discounts. Barilla would divide the year into 10 to 12 canvass periods to where certain promotional items would be sold at a discount. Barilla would also pay for the transportation costs to its distributors and would offer incentives for distributors to order in full truck-load quantities. Since Barilla did not have any minimum or maximum order quantities in place for its distributors‚ this made it much more
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