BARILLA SPA (A) BUSINESS CASE AS PRESENTED BY GIORGIO MAGGIALI TABLE OF CONTENTS Executive Summary P2 Issue Identification P3 Root Cause Analysis P4-6 Alternatives and Options P7-9 Recommendations P10-11 Implementation P12-13 Monitor and Control P14 Exhibit P15 Executive Summary Barilla SpA (A) continues to be a market leader in pasta production. We are currently experiencing a growing burden of demand fluctuations for our dry pasta products putting extreme demand
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Barilla –Supply Chain Inventory Management Barilla TABLE OF CONTENTS EXECUTIVE SUMMARY 3 ISSUES IDENTIFICATION 3 ENVIRONMENTAL AND ROOT CAUSE ANALYSIS 3 ALTERNATIVES AND/OR OPTIONS 3 RECOMMENDATION AND IMPLEMENTATION: 3-4 Executive Summary: In an attempt to control inventory swings‚ reduce costs‚ and improve sales we have introduced the JITD initiative. This initiative has been a failure
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abdi DSCI 434 3/24/2011 Barilla SpA Case Study 1. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program? One of the underlying causes of the difficulties that the JITD program was created to solve was the effects of inconsistent demand that came from Barilla’s distributors. The extreme demand variation strained Barillas manufacturing and logistics‚ and made very hard for Barilla to meet that demand. For
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Barilla SpA (Written Case Report) By Imran Chaudhry Overview: Barilla SpA one of the world’s largest pasta producer has growing burden of demand fluctuations and venialities on its manufacturing and distribution system. Giorgio Maggiali as director of logistics trying to implement idea of JITD (Just-in Time Delivery) so that Barilla’s own logistics department could manage more effectively delivery quantities and meet end consumer’s needs and more evenly distribute the workload on its
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Barilla SpA Case Study Define the Problem: Describe the type of case and what problem(s) or issue(s) should be the focus for your analysis. Type: Supply Chain Problems/Issues: - Extreme demand fluctuations – week-to-week variation in distributors order pattern‚ strained Barilla’s manufacturing and logistics operations: high inventory‚ stock out‚ low fill rate to customers. - Pressures to manufacturing in terms of production lead-time and availability of the product - High inventory cost
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Case Presentation Barilla SpA Introduction Company & Industry background • World’s largest pasta producer in 1990 • Pasta Share - 35% in Italy and 22% in Europe Channels of Distribution • Products divided in 2 categories – “Fresh” and “Dry” • Fresh Products had 21 day Shelf Lives • Dry Products had Long ( 18 to 24 Months) or Medium(10 to 12 weeks) Shelf Lives • Retail Outlets – Small independent The Issue • During the late 1980s‚ Barilla suffered increasing operational inefficiencies and
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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
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Executive Summary Giorgio Maggiali is the director of Logistics for Barilla and was appointed to this position when his predecessor Brando Vitati was promoted. Vitati had proposed a Just in Time Delivery (JITD) model for Barilla. Vitati has commented on the “thinning margins” the industry was experiencing and the need to “take costs out of our distribution channel without compromising service”. He felt operations could be improved if Barilla was responsible for determining the quantities and delivery
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The Bullwhip Effect and Barilla SpA The Bullwhip Effect is an observed phenomenon in forecast-driven distribution channels where there is variability up the supply chain. Some of its causes are: Dependent demand processing Forecast Errors Adjustment of inventory control parameters with each demand observation Lead Time Variability (forecast error during replenishment lead time) Lot-sizing/order synchronization Trade promotion and forward buying Anticipation of shortages One way
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