...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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...Barilla SpA (A) Case Report SCMP Module 5 By Jamie Brymer Robert Greene February 12th, 2016 Table of Contents Executive Summary 3-4 Issue Identification 5-7 Environmental and Root Cause Analysis 8-9 Alternatives or Options 10-12 Recommendations and Implementation 13 Monitor and Control 14 Exhibits Attached Executive Summary Barilla SpA, is an Italian pasta manufacturer and distributor and even with an attractive piece of the market (35% in Italy, 22% in Europe) and diversifying product lines, they are experiencing inefficiencies and rising costs due to irregular and ever changing demand from their distributors. Giorgio Magialli, the Director of Logisitics, has been tasked with resolving these issues by gaining control over their fluctuating demand. Barilla currently has in place, a very complex distribution network and has been experiencing increasing variable changes which is not only hitting operations for their inefficiency but increasing costs across the board for inventory, distribution and manufacturing. After much backlash the first time of trying to implement a Just-In-Time Distribution (JITD), the plan is to regroup and decide whether this time of program can be implemented successfully and if so, which customers they should target with this type of system. The first attempt at implementing the JITD strategy was done by Brando Vitali, the former Director of...
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...Barilla SpA - Case Study Table of Contents I. Executive summary II. Issue Identification III. Environmental and Root Case Analysis IV. Alternatives and Options V. Recommendations VI. Implementation VII. Monitor and Control/ Conclusion I. Executive Summary My decision for this case is to implement the Just-In-Time Distribution (JITD) system. 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 into place 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 the distributors and Barilla’s Sales and Marketing Department. In this report we have studied the reasons for this opposition and have suggested strategies. We have given our rationale for the JITD system to work and have proposed recommendations to resolve all existing issues. We think that a centralized supply chain with Barilla having authority of the orders over the distributors will result in better margins for all the partners. We believe that by following these recommendations and implementations, Barilla will succeed in influencing its distributors and sales and marketing personnel to work together and apply the JITD program...
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...Barilla Spa (A) Report on Supply Chain Management Issues Table of Contents Executive Summary Issue Identification Root Case Analysis Alternatives and Options Recommendations Implementation Monitor and Control Exhibits Executive Summary Giorgio Maggiali, director of logistics of Barilla SpA stated the the growing burden that demand fluctuations imposed on the company's manufacturing and distribution system. The solution was proposed as Just In Time Distribution Program. Due to specific Barilla's supply chain system it is not quite simple. Barilla needs to improve their own forecasting system and need to develop a set of decision rules. They need to re-group and decide where to go with JITD. For this purpose the main issues where identified and and recommendations were made. The implementation plan is filled with immediate and short run activities. Barilla enjoys a strong brand image in Italy. It was driven by success as the highest quality pasta for every Italian family - “Where is Barilla, there is a home”. Timely distribution of quality products is a strategic mission Barilla SpA and the recommendations made can be used to reflect and strengthen this mission. Issue Identification The following are the list of issues that must be addressed: • Too many different types of distribution centres • Long inventory time • Small product variety in stores • No minimum or maximum order quantities • Long lead time • ...
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...Barilla SPA (A) Case Report By CHIEMEKA EZEJIOFOR Table of contents Summary Page Executive Summary 3 Issue identification 4 Root cause Analysis 5 Recommendation 6 Recommendation Implementation Plan 7 Conclusion 8 Part 1 Executive summary Barilla SPA (A), the largest producer of Pasta was founded in 1875, it faced a huge fluctuation on its production because the production was based on the traditional practice of delivering products to distributors based on the basis of whatever order was placed on the company. This resulted in difference or variation of production price, as well as piled up inventory at the distributor’s depot. My decision is to implement the Just in time Distribution (JITD) concepts based on the fact that production and manufacturing is determined by the consumer’s needs and controlled by barilla being able to achieve this by eliminating huge variation for manufacturing and distributors. Furthermore Just In timed Distribution will also avoid the accumulation of inventory at the distributor’s depot. Barilla SPA is a vertical integrated organization, the rise and fall in demand will affect the other arms of the organization since they don’t only manufacture only pasta, its affects transportation, flour mills, sales etc. However, JITD faced some...
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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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...CASE REPORT BARILLA SpA (A) PREPARED FOR PREPARED BY DATE | | | | | |Section |TITLE |PAGE | | | | | | | | | | | | | |1 BUSINESS /COMPANY BACKGROUND |3 | | ...
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...Table of Contents Executive Summary 2 Issue Identification 3 Environmental and Root Case Analysis 3 Alternatives and Options 8 Recommendation 10 Implementation 11 Monitor and Control……………………………………………………………………………………12 Executive Summary Barilla is the largest pasta manufacturer in the world. While this is an excellent title to lay claim to for this company, they face many issues that if gone unchanged, will undoubtedly lower Barilla’s ability to produce such a high quality product while meeting the demand for all of their products. The issues that Barilla faces include the inability to meet demand for products at certain times due to insufficient manufacturing and logistics systems. As well as poor communication and relationships with it’s marketing intermediaries which results once again from poor ordering systems, as well as a lack of control of the distribution centers used by Barilla. Barilla will analyze three strategies to try and take these issues, turn them on their head and capitalize on them to make them strengths for their company. These alternatives will include implementing a JITD inventory system, renovating their manufacturing and production plants, or cutting ties with their current distribution centers, and constructing their own while developing a POS technology that will allow for accurate ordering and logistics. Barilla will implement the last alternative as it eliminates all issues threatening their company as well...
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...(A) Written case Report for the JITD Program Module # 5 Oct 15, 2015 Table of Contents Executive summary Barilla SpA, an Italian pasta manufacturer is experiencing problems in manufacturing and distribution systems caused by fluctuations in demand. They are the worlds largest pasta producer and are initiating the Just in time Distribution (JITD), which is supposed to help the company to meet the demand fluctuations imposed by the company’s manufacturing and distribution system. The current delivery system at Barilla follows the traditional way of ordering through distribution centres placing orders with the company. Instead Barialla wants to engage its own logistics organizations, which would specify the appropriate delivery quantities that would meet end customer needs and distribute the workload on Barilla’s manufacturing and logistics systems. The Just in time Distribution has been met with significant resistance by the distributors and Barilla’s own sales and marketing organizations. After looking at all of the information provided and careful analysis of the problem I have suggested that Barilla should implement the JITD at the pilot level and once successfully implemented with positive results it should be implemented throughout in stages. I will be providing analysis and recommendations on how to increase the chances that the JITD program will work and be accepted and also consider the reasons why it should be implemented. Introduction Barilla started its...
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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 manufacturing and logistics systems. Giorgio Maggiali after couple of years of efforts to implement the idea has not been successful and could not make significant progress. Problems to implement JITD The problems and weaknesses Giorgio Maggiali has to implement the JITD are: • Barilla’s distributors unwilling to support the idea as they do not want to give up their authority to place and order and lose control over it • Distributors reluctant to provide sales data upon which Barilla could forecast demand and make decisions to improve delivery and manufacturing, as a result Barilla is relying on distributors demands, which is having bullwhip effect for Barilla. • Barilla’s own marketing and sale people resisting the idea. Bullwhip Effect: Bullwhip Effect is a phenomenon in supply chain where distorted information is passed through large variations and swings in demand Barilla’s Distribution system: Barilla has divided its product line into Dry which represents...
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...SUPPLY CHAIN INVENTORY MANAGEMENT SUBMITTED BY A CASE STUDY OF BARILLA SpA. Table of Contents 1. Executive summary 2. Body of the repot 3. conclusion Executive Summary Barilla SpA is the case study that I will be examining in this paper presentation. I will be looking critically into some of the issues why the Just-in-time-distribution (JITD) program that was proposed by Brando Vitali who had served as Barilla’s directors of logistics before Maggiali had met a strong resistance both from the distributors and the sales and marketing organization. Vital had proposed rather than follow the traditional practice of delivering product to Barilla’s distributors on the basis of whatever orders those distributors placed with the company, Barilla’s own logistics organization would instead specify the appropriate delivery quantities –those that would more effectively meet end-consumer’s needs yet would also more evenly distribute the workload on Barilla’s manufacturing and logistics system. Was this program necessary at this time? Is it that both the distributors and sales and marketing organization do not understand the benefits of the program? Do they see it as a program that will distort all what they passive to be running smoothly? Should this program have been introduced at this time? Who stands to gain from this program? Will this program actually reduce cost from logistics as envisaged by Vitali? Will this program address the thinning margin that is being...
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...Session 5 Case Study: Barilla SpA Executive Summary In order to reduce the strain that fluctuating demand is putting on our manufacturing and logistics systems, I am moving forward with an action plan to implement Just-in-Time Distribution at Barilla. Under the Just-in-Time Distribution system, Barilla’s internal logistics will determine the optimal levels of distribution necessary to meet customer demand. While we are likely to face opposition to this program, it is vital that the entire organization understands the process efficiencies and bottom line savings that will result from this distribution system and that there will be a positive impact on the entire manufacturing and distribution channels. Over the next two months, our sales and management team will be visiting a select number of distributors in order to sell-in the JITD program that will result in the sharing of information, in both directions, in order remove any environment of doubt our customers may have. Our sales team will act as our lead in the gathering and distributing both hard and soft data and maintaining relationships with our distribution customers. The program, once implemented, benefits distributors by lowering inventory, improving service levels and increasing return on assets (ROA). In addition, our manufacturing and logistics systems will be relieved from the pressures of fluctuating demand. I will be scheduling a meeting with the entire sales and...
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...Barilla SpA (A) – Case Report ISSUE IDENTIFICATION: Main Issue Barilla’s manufacturing and distribution system continuous and growing burden due to tremendous demand fluctuations and variability on a weekly basis had Brando Vitali, former Director of Logistics, propose the idea of Just-In-Time- Distribution (JITD) as an alternative to Barilla’s traditional practice of delivering product to distributors on the basis of what orders they placed. Barilla’s own logistics organization would instead specify and determine the delivery quantities. This issue only deals specifically with Barilla’s Dry products which represents 75% of their sales. Issues with current traditional ordering method and JITD are analyzed and listed below: Traditional Method Immediate Issue: Current distribution order procedures consist of most distributors checking their inventory levels and placing orders with Barilla once per week. Under this system, orders for Barilla dry products fluctuate greatly from week to week. Such extreme demand variability strained the manufacturing and logistics operations. Systemic Issues: Barilla fully-automated manufacturing system is not designed to meet and accommodate the large fluctuation demands. The manufacturing sequences of pasta production made it very difficult to produce particular types of pasta that had been sold out due to unexpected high demand. The temperature and humidity in the kiln is precisely specified for each size and shape of pasta and is...
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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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...| Barilla SpA – Case Report | Implementation of the Just in Time Delivery System | Supply Chain Management | | | | Contents Part 1 – Executive Summary 3 Part 2 – Immediate Issue 3 Part 3 – Systemic Issues 4 Part 4 - Qualitative Analysis 4 Part 5 - Quantitative Analysis 5 Part 6- Alternatives and Options 5 Part 7 - Recommendations and Implementation 6 Part 8 - Monitor and Control 7 Part 9 – Conclusion and Management Plan 7 Part 10 – Exhibits 8 Part 1 – Executive Summary To date, implementation of the Just in Time Distribution System (JITD) has not been successful. It has been resisted both internally with our sales force, and externally with our distribution network. The potential benefits of the JITD remain the same as they did upon the conception of the system designed by Brando Vitali. Rather than placing traditional orders with our factories, the distributors will instead provide us the demand information from the retail store locations. Using the data from the retail store orders, we can determine the optimum schedule upon which to base our production and distribution plans. This will eliminate demand fluctuation and the current lack of ability to plan. We will determine the replenishment orders for the distributors, offering them an additional value added service and minimizing stock outs. The benefits of the JITD system include reduced manufacturing costs, reduced inventory and carrying costs, production planning ability...
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