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 Brando Vitali‚ the earlier Director of logistics in Barilla SpA proposed an idea of Just- In- Time Distribution (JITD). The proposed JITD system required the distributors to share their sales data with Barilla‚ who would then forecast and deliver appropriate amounts of products to the distributors at the right time in order to effectively meet demand. Instead of Distributors giving orders according to them‚ company should deliver its products on time by its own
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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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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 CASE STUDY REPORT 1. Introduction Barilla was founded in 1875 in Parma‚ Italy by Pietro Barilla. It used to be a small store that sold pasta and bakery products. In the 1960s‚ it differentiates itself from competitors by producing high quality product with noticeable packaging and marketing campaign. In the 1970s‚ due to the big investment for pasta plant‚ Barilla was in huge debt and was sold to WR Grace (a multi national firm). Followed in 1979‚ the Barilla brother had enough money
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Barilla SpA * The spaghetti incident - Maastricht University School of Business and Economics International Executive Master of Finance and Control 20 April 2012 Course – Logistics Prof. Dr. Allard van Riel Pauline Henselmans Jetse van de Kamp Ze Zhu Thiago Barros de Oliveira Rene Lorrier Contents 1. Reasons for the increase in variability in demand in Barilla’s supply chain 3 1.1 Distributed inventories‚ local optimization 3 1.2 Lack of inventory information and
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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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Supply Chain Management Assignment 3: Supply Chain Coordination Describe Barilla’s manufacturing and distribution operations. Manufacturing: Barilla has 25 plants‚ including large flour mills‚ pasta plants‚ and fresh bread‚ as well as plants producing specialty products. Raw materials‚ in the manufacturing process‚ were transformed to packaged pasta on fully-automated 120 meter long production lines. The plants were specialized by the type of pasta they would produce‚ with the primary distinction
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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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