...School Informe Individual: Barilla SpA Barilla SpA fundada en 1875 por Pietro Barilla es un referente mundial en la industria de producción de pastas tanto secas como frescos, como también en bollerías y salsas. En principio la empresa se ha posicionado como un ejemplo de alto crecimiento a través de los años. Para 1990 ya Barilla se había convertido en el fabricante de pastas mas grande del mundo con una cuota de mercado del 35% en Italia y el 22% para toda Europa. Todo este crecimiento es el resultado de los esfuerzos de Ricardo Barilla, hijo del fundador, quien desde la re adquisición de la empresa ha implementado ciertas estrategias en cuanto a distribución, markeitng, y toda la cadena de suministro. Incluso con sus operaciones en todo el mundo, la compañía sigue siendo privada y una empresa familiar bajo la propiedad de los tres hermanos Guido Barilla, Luca y Paolo . Entrando un poco en la industria donde Barilla se encuentra, cabe resaltar que el foco principal lo debemos tener en Italia. Este es uno de los mercados mas importantes de Barilla ya que es allí donde Barilla maneja toda su estructura de producción y distribución de sus mas de 100 productos. Esta industria consume mas de 18kg per cápita de pasta al año, lo que indica que en Italia la pasta es un plato importante del día a día, y que representa uno de los mercados mas grandes frente a consumidores directos. Con un mercado muy competitivo y con cientos de competidores Barilla ha sabido mantenerse a flote...
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...Executive Summary Barilla SpA, an Italian pasta manufacturer is experiencing problems in manufacturing and distribution systems caused by fluctuations in demand. To eliminate these difficulties Giorgio Maggiali, the Chief of Barilla’s Logistics Department, has been trying to implement the Just-In-Time-Distribution, further referred as JITD, system proposed by his predecessor Brando Vitali. JITD can be called a remake of popular “Just-In-Time” manufacturing concept. Although Maggiali has been trying to convince his consumers that the JITD would definitely work, he has not made much progress. The program was met with significant resistance by the distributors and Barilla’s own Sales and Marketing organizations. Now Maggiali is looking for possible solutions of the problem. In the following analysis we will provide recommendations, which will help Barilla to successfully implement the JITD system and thus decrease its costs, increase efficiencies and its profits. Introduction Barilla SpA was founded in 1975 by Pietro Barilla. From a small shop in Palma, Italy, it became a large, vertically integrated corporation with mills, plants and factories located throughout the Italy. Barilla’s success highly depended on its’ quality of product and innovative marketing programs, which created strong brand name. The company was sold to Grace Inc. in 1971, because the building of a huge plant in Perdignano drove the owners “deeply into debt”. Grace brought additional capital investment...
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...Executive Summary Barilla and its distributors have decided to implement the Just-in-Time Distribution (JITD) approach. This will require a vendor relationship between Barilla and its distributors and investment in sharing information from its customers and the inventory on hand in the distributors’ warehouse. Because of Barilla’s poor performance caused by shortages it is imperative that JITD is implemented in a proper manner that emphasizes the short term and long term gains that Barilla and its supply chain will have. Although most of the implementation can occur in a short period of time, in order for the supply chain to truly be successful, there must be long term investment for the vendor relationship and relationship with its internal members to truly be effective and successful. Issue Identification The following are a list of issues that must be addressed: * Distribution System * Extreme demand fluctuations * Distributor resistance * Internal resistance Issue Identification including Root Cause Analysis Distribution system Barilla has employed two main approaches to meet the end users’ needs. Barilla carries extra inventory in its factories in anticipation of any large pulls from its customer because it can’t produce product fast enough within the constraints of its production facilities. However, holding extra inventory is extremely expensive because there is no predictability in demand. Second, in order to minimize its inventory carrying...
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...THE BARILLA Spa CASE [pic][pic] QUESTION 1: Observe Exhibit 12. What are the underlying causes and drivers that make order patterns to look this way? Provide a discussion on these causes/drives to show how they are causing the resulting demand pattern. Examples of items to consider include transportation discounts, promotional activity, product proliferation. The BARILLA case is an illustrative example where we can understand the effects of a phenomenon which is very common among industries that is called the Bullwhip effect. As an immediate outcome this phenomenon creates large swings in demand on the supply chain resulting from relatively small, but unplanned, variations in consumer demand that escalate with each link in the chain .Events that can trigger begin at any point in the supply chain: consumer, retailer, distributor, manufacturers, raw materials suppliers and so on. As orders progress up the chain, each level perceives a greater demand that it seeks to rectify from its own Lets discuss in more detail some of the causes that can trigger this event and we can identify in the case: • Promotions: Barilla’s sales strategy relied heavily on the use of promotions, in the form of price, transportation and volume discounts. They divided the year into 10 to 12 canvass or promotional periods, during which different products were offered at discounts. These price discounts ranged from 1.4% to 10%. Barilla’s volume discounts consisted...
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...Barilla Case 1. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and draw backs of this program? JITD was created to solve the problems of effects of fluctuating demand (Bullwhip Effect) and stock outs issue that strain Barilla’s manufacturing and logistics operations. Benefits: Barilla can make better delivery decisions and improve its demand forecasts, be more effectively meet end-consumer’s need and more evenly distribute the workload on its manufacturing and logistics systems. The inventories of Distribution Centers (customers) could be reduced. Drawbacks: Sale Persons lost their incentives, because the sale will be predictable or flat. It will be difficult to run trade promotions with JITD. Cost might increase due the needs to increase internal inventories. It might create stockouts problem instead of solving it. Customers need to improve their equipment (computer, bar-code scanner, etc) and share their sales data that they are reluctant to do. The customers might work with other vendors for their extra space for inventories. 2. What conflicts of internal barriers to Barilla has JITD created? What causes these conflicts? How would you deal with them? The implementation will take away some needs for sale and marketing that Barilla depends so much for their success as documented in the case study. The sale will be flat that takes away the bonus for the sale persons and since the trade promotions...
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...Barilla spA: Case Report Prepared by Claudio Parra Supply Chain Management Seneca(Markham) Monday’s Submitted: Wednesday, October 15, 2014 Submitted to: Perry Davidson Table of Contents Table of Contents……………………………………………………………………2 Introduction……………………………………………………………………………3 Environment and Root Cause Analysis…………………………………4-5 Issue Identifier…………………………………………………………………………6 Recommendation……………………………………………………………………7 Implementation………………………………………………………………………8 Monitor Chart…………………………………………………………………………9 Barilla is one of the world’s largest pasta manufactures, which also produces bread, cookies and other quicker perishable items. Holding about 35% of Italy’s market and 22% of the global market, this vertically integrated company has been faced with challenges in both the manufacturing and distribution due to the high fluctuation of demand. With about 75% of its SKU’s being in the pasta line, it has been difficult to keep shelves fully stocked. Even with the control of flour mills and centralized distribution centres(CDC’s), the information flow between end consumer and manufacturer has created friction within its business partners. Being such a large manufacture of pasta(its main product) the distribution process has been outsource into two separate interties. Grande Distrbuzione(GD’s) focusing on large supermarket chains, and Distribuzione Organizzata(DO’s) centered around the smaller/independent supermarkets. This has...
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...distribuidores tinham sistemas semelhantes de previsão ou ferramentas analíticas para determinar as quantidades encomendadas; - se torne difícil “empurrar” as vendas junto dos distribuidores, com a limitação da implementação de promoções comerciais que serviam de incentivos; - devido à diminuição de stocks, se criem espaços livres nos distribuidores que possam vir a ser ocupado por concorrentes. As principais resistências externas advieram dos distribuidores que consideram que a gestão de stocks é uma atividade chave da gestão da sua própria empresa, não estando disponíveis para ceder essa responsabilidade. Estes sentem ainda resistência à passagem de dados das vendas para a Barilla, SA, considerando que se trata de informação demasiado sensível de cada empresa. A nível tecnológico, o JITD da Barilla implica alterações e investimentos nos sistemas informáticos e ferramentas...
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...Barilla SpA (A) Case Module 1 ------------------------------------------------- Table of Contents ------------------------------------------------- Executive Summary 3 Issue Identification and Root Case Analysis 4 Alternatives and Options 7 Recommendations and Implementation 8 Monitor and Control 9 Exhibits 10 ------------------------------------------------- Executive Summary ------------------------------------------------- The tremendous fluctuation that occurred from week to week in the number of Barilla dry products being ordered by the distributors and the extreme demand variability seriously strained Barilla’s manufacturing and logistics operations. Barilla’s highly automated manufacturing system was not designed to accommodate large fluctuations in demand nor, was it designed to accommodate sudden changes in demand or product. Brando Vitali, Barilla’s director of logistics, proposed the idea of Just-In-Time Distribution (JITD) in the 1980’s as an alternative to Barilla’s traditional...
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...CASE STUDY – 1 BARILLA SPA IMPLEMENTATION OF JITD Submitted as a requirement for completion of Module 5 – Supply Chain Inventory Management of the SCMP Program. By: Iqbal Gill (Registration Number – 201501160004) Date: 14 February 2015 Table of contents Executive Summary 3 Statement Of Issues 4 Impact of Issues 5 JITD Implementation 6 Barriers 7 Recommendations 11 Conclusion 14 Executive Summary: The Italian Pasta Manufacturer, Barilla SpA, is experiencing a tremendous impact of the BULL WHIP effect (Appendix 1) causing inefficiencies and increases in cost due to variability in demand from its distributors. Giorgio Magialli, the Director of Logistics, wants to implement a Just-In-Time Distribution (JITD) system to gain more control. The new system is untraditional and is being rejected by both distributors and Barilla's internal departments. I have reviewed the reasons for opposition and have made recommendations to gain support for the new JITD system. I feel that with proper implementation and some tweaks; Barilla can garner leverage in the near future and can outgrow the pangs of the newly launched system. Although the case focuses on domestic (Italy) distribution-related operational issues, the Barilla management team should define their operation strategy for the near future that covers both domestic and international markets in alignment of Barilla’s market vision. The operation strategy should identify the order of importance...
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...Executive Summary In 1875, Pietro Barilla opened a small shop and laboratory where they produced, and sold pasta and breads. In 1990, Barilla was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% of all pasta sold in Europe. Since Pietro’s grandsons took over, Pietro and Gianni, Barilla evolved into a vertically integrated company with flour mills, pasta plants and baking products. This case study outlines Giorgio Maggiali’s (Director and Logistics) concern of the growing burden that demand fluctuations imposed on the company’s manufacturing and distribution system. Currently, Barilla’s dry product orders range greatly from week to week, causing an increase on stock outs. Given the information provided in this case, my executive decision is to implement the idea of Just-In Time Distribution (JITD) strategy, which is modeled after the widely popular “Just-In-Time” manufacturing concept. This strategy will allow Barilla to forecast and maintain inventory levels by shipping product to the distributors based on the customer’s internal planning processes and forecast. Unfortunately, the customers are showing unfavorable responses to this new strategy. Barilla needs to convince the distributors that this strategy will reduce the average delivery time. The JITD model should be considered a selling tool offering customers additional service without any extra cost. The JITD proposal will be a help to all parties; from manufacturer, to end customer...
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...Case Report Barilla SpA ------------------------------------------------- Table of contents Table of Contents | | | Section | TITLE | PAGE | | | | | | | | | 1 EXECUTIVE SUMMARY | 3 | | | | | * | | * 2 CHALLENGES OF A LEAN SUPPLY CHAIN | 4 | | | 3 PRACTICAL STEPS FOR BARILLA SPA | 5 | | | 4 CONCLUSION | 6 | | | * 5 BIBLIOGRAPHY | 7 | | | * | | | | ------------------------------------------------- Executive Summary Barilla SpA is the largest pasta manufacturer in the world, as a food manufacturer they sells to a wide range of retailers through a distribution network. An analysis of the demand for dry food pasta at Barilla SpA’s distribution centers and factories revealed extremely high variation in demand. The variation in demand observed was all the more remarkable considering that the underlying demand for pasta in Italy is fairly level. Currently, Barilla SpA is experiencing a full development burden of increasing production costs, inventory levels and inefficiencies in manufacturing and dissemination system due to huge fluctuations on demand and varied accuracy of forecasting knowledge. In order to combat this problem, we would like to realize and employ a Just-in-time scattering system (JITD) to enable information sharing along supply chain, improve...
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...CASE STUDY BARILLA SpA (A) TABLE OF CONTENTS PAGE 1 COVER PAGE PAGE 2 TABLE OF CONTENTS PAGE 3 EXECUTIVE SUMMARY PAGE 4 ISSUE IDENTIFICATION – IMMEDIATE ISSUE PAGE 4 ISSUE IDENTIFICATION – SYSTEMIC ISSUES PAGE 5 ISSUE IDENTIFICATION – SYSTEMIC ISSUES CONTINUED PAGE 6 ENVIRONMENTAL & ROOT CAUSE ANALYSIS PAGE 6 ALTERNATIVES AND / OR OPTIONS PAGE 7 ALTERNATIVE AND / OR OPTIONS (CONTINUED) PAGE 8 RECOMMENDATIONS & IMPLEMENTATION PAGE 9 IMPLEMENTATION PLAN PAGE 9 MONTIOR AND CONTROL PAGE 10 MONITOR AND CONTROL (CONTINUED) EXECUTIVE SUMMARY Barilla SPa(A) was the world’s largest pasta producer during the 1990’s and held a significant market share in Italy and Europe. They produced dry pasta, fresh pasta and bakery items at several factories throughout Italy. Their route to market was through central distribution centers which they owned who in turn sold Barilla products to other distribution centers who sold to the retail stores. Barilla was experiencing huge fluctuations in demand for its products, which was causing serious stock outs at the distribution centers and ultimately on the retail store shelves. Taking into account the manufacturing process time line, the non-existent forecasting of customer demand from the distribution centers, the ever increasing Bullwhip Effect, MY DECISION is to implement a Just in Time Distribution System (JITD), with a staggered implementation approach. I will first approach all Management with my implementation...
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...CASE: Barilla SpA (A) I.Overview of the Case Barilla SpA (Barilla) is a renounced Italian manufacturer that sells several brands of pasta to retailers mainly through third-party distributors. The company was founded in 1875 by Pietro Barilla in Parma, Italy, on Via Vittorio Emanuele. The company passed through the hands of generations from Pietro to his son Ricardo, then to his sons, Pietro and Gianni. The sons “drove the Barillas deeply into debt”; in 1971 the company was sold to a U.S. firm, W.R. Grace, Inc. (Book, 144). Not able to see a profit with their investment, Grace sold the company back to Pietro Barilla. During the 1980s, Barilla relished in an “annual growth rate of 21 percent” with 35 percent being sold in Italy and 22 percent sold Europe. Barilla progressed into a highly vertically integrated company operating flour mills, pasta plants and fresh bread plants as well as distribution warehouses. With growth, there are falls… Barilla was experiencing problems in the manufacturing and distribution systems caused by fluctuations in demand. Giorgio Maggiali, Director of Logistics became extremely frustration with the situation. Mr. Maggiali tried to implement the just-in-time distribution (JITD), which was proposed earlier by his predecessor, Brando Vitali. It was an up-hill battle because “Barilla’s customers were simply unwilling to give up their authority to place orders as they pleased” and did not share their sales data which would have assisted...
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...Barilla SpA Case Study Operations Management Prabir K. Bagchi, Ph.D. April 11th, 2012 [pic] Jason Grossman_____________________________________ Odelya Hayon_______________________________________ Evan Kline__________________________________________ Stephen Nason_______________________________________ Victoria Portale______________________________________ Current Problems Barilla SpA is the world leader in producing and selling a multitude of different pastas and baked goods, however, after reviewing Barilla’s case study, we took note of all of the underlying factors that are preventing the company from maximizing their productivity and ultimately, maximizing their profitability. Barilla faces a number of issues that are limiting the company’s ability to maximize profit, reduce costs, and ensure adequate available inventory levels. Barilla's main issues include extreme demand fluctuations, extensive lead times, an insufficient channel of communication between several distribution partners, high inventory carrying costs, and their current discount/promotion programs. The coupon and discount system that Barilla advertises to their distributors is a major factor contributing to their detrimental demand fluctuations. Barilla offered volume discounts including paid transportation to distributors, 2-3% price-breaks for full-truck orders, and even greater discounts (around 4%) in some instances where a given buyer placed purchases of three or more full-truck orders...
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...For years Barilla was successful in selling their brand of fine pastas but when a shift in demand for products resulted in items being sold out, Barilla tried to operate like a responsive supply chain which did not work for this functional product. Based on Fisher’s 2x2 model Barilla’s supply chain should be run as a functional product with an efficient supply chain. Barilla should run a more efficient supply chain which can be achieved through the use of the Just-In-Time-Distribution (JITD) program; effective communication with the distributor will allow Barilla to retailers with proper stock of goods through more accurate forecasting and sales data. The critical elements of the JITD program employ the use of distributors’ shipment data to send only what is needed to the retailer. Each day the distributor will provide information on what is shipped to retailers and current stock levels of each location; essentially the manufacturer would co-manage the inventory with the distributor. By implementing the JITD program the suppliers would receive the right amount of product due to Barilla’s ability to improve their forecasting through current sales data and provide the necessary product to the distributor. They would also be able to manage the shelf-space and material distribution through the use of vendor-created delivery schedules. This program takes the pressure off the distributor to hold inventory they didn’t carry and increase the stock of items they already had. The JITD...
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