Harvard Business School 9-694-046 Rev.JuneU‚ 1994 Barilla SpA (A) Giorgio Maggiali was becoming increasingly frustrated. As director of Logistics for the world’s largest pasta producer‚ Barilla SpA1‚ he was acutely aware of the growing burden that demand fluctuations imposed on the cornpany’s manufacturing and distribution system. Since his appointment in 1988 as Director of Logistics‚ he had been trying to make headway on an innovative idea proposed by Brando Vitali‚ who had served as Barilla’s
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Barilla spA case analysis Barilla SpA‚ an Italian pasta manufacturer‚ is experiencing amplified levels of inefficiencies and rising costs due to variability in demand from its distributors. The main problem addressed in this case is how to effectively implement JITD system suggested by Giorgio Magialli‚ the Director of Logistics by resolving the issue of gaining control over the fluctuating demand. Barilla has a very complex distribution network including independent third party distributors and
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Executive Summary My decision for this case is to implement the Just-In-Time Distribution (JITD) system that was proposed by his predecessor Brando Vitali. This system is entirely different from the existing set up and is being opposed by both the distributors and Barilla’s Sales and Marketing Department. 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
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What are the reasons for the increase in variability in Barilla’s supply chain? Barilla gave volume reductions for the merchants ordering capacity fully loaded quantities‚ in turn causing merchants to place more supply orders than necessary leaving their inventory levels high. This meant that the retailers did not have to order as often due to high inventory rates on hand. There is also a weekly change in customer demand for the pasta produce. The lack of information to customer demand data in
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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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Executive Summary Barilla‚ the leading pasta manufacturer in Italy‚ faces increasing problems related to demand fluctuation. Their distributors also suffer from high inventory holding costs and low service levels on the other hand. This report explains‚ why the company and their distributors are troubled with this situation and how Barilla intends to solve it. The problem Barilla experiences is called the “Bullwhip Effect”‚ i.e. that demand variability increases when moving up the supply chain
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Executive Summary Barilla SpA‚ an Italian pasta manufacturer‚ is experiencing greater levels of inefficiencies and rising costs due to variability in demand from its distributors. In order to restore things to 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 completely different from the existing setup and is being opposed by both the
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ACADEMIA BARILLA- HARVARD BUSINESS SCHOOL CASE STUDIES Parma‚ Italy - January 31‚ 2007 - Harvard Business School has selected Academia Barilla for an in-depth look into its business in the prestigious annals of Harvard Business School’s business case studies. Less than three years after its founding‚ Academia Barilla is one of the few Italian companies to ever get chronicled by Harvard. The Harvard Business School business case study for Academia Barilla recounts the last 10 years of the development
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Case Analysis 3 Barilla SpA MGT 371 Section 2 – Team 6 What is the impact of fluctuating demand on operations? Because of the way Barilla’s manufacturing process works‚ demand fluctuations have a significant impact on the company’s operations. Tight heat and humidity specifications in factory tunnel kilns require very specific sequences of pasta production‚ which means Barilla has limited flexibility in ramping up (or ramping down) the production of pastas experiencing unexpected demand levels
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Executive Summary My decision is to implement Just in time distribution (JITD) to Barilla Distributors to reduce distribution costs‚ inventory levels and manufacturing costs. This would enable Barilla to improve relationships with their distributors and provide them with more objective data so that they can improve their own planning procedures. Barilla Operations will have more control on what is being shipped out so that shipments can be planned to optimize full loads. Manufacturing costs can
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