...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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...CASE REPORT BARILLA SpA (A) PREPARED FOR PREPARED BY DATE | | | | | |Section |TITLE |PAGE | | | | | | | | | | | | | |1 BUSINESS /COMPANY BACKGROUND |3 | | ...
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...2008 JANICE H. HAMMOND 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 company’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 director of logistics before Maggiali. The idea, which Vitali called Just-in-Time Distribution (JITD), was modeled after the popular “Just-InTime” manufacturing concept. In essence, Vitali proposed that, 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 systems. For two years Maggiali, a strong supporter of Vitali’s proposal, had tried to implement the idea, but now, in the spring of 1990, little progress had been made. It seemed that Barilla’s customers were simply unwilling to give up their authority to place orders as they pleased; some were even reluctant to provide the detailed sales data upon which Barilla could make delivery decisions...
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...Solution…………………………………………………………………………....11 Recommendations to the solution …. …….………………………………………12 Other recommendations…………………………………………………………...15 Customer response to the solution…………………………………………………16 Conclusion………………………………………………………………………....21 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...
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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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...Barilla S.p.A. Cases A and B 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? The JITD program was created to view distributors’ shipment data and sends only the required amount to stores. Barilla would be able to ship products on a need basis instead of piling up huge stocks in their facilities and that of their customers. The complex nature of manufacturing sequences of pasta made it extremely difficult to produce certain types of pasta that was stocked out due to unforeseen demand. Different kinds of pasta were made in various plants with special equipment based on the type of pasta produced. This ultimately limited Barilla’s production flexibility to switch the location of plants as needed to meet the demand for the product. Barilla was attempting to hedge against the bullwhip effect that occurs due to fluctuating demand as well as to solve stock out issues that were hindering Barilla’s logistics operations. It was often difficult to manufacture certain goods with limited lead time as well as expensive to hold sufficient inventory of finished goods when demand fluctuated so much. The fluctuation in demand was causing manufacturing, inventory and distribution costs to be a lot higher than they needed to be. At the current rate, Barilla’s logistics team knew the status quo would not be enough to keep up with the uncertainty in demand. Something has to change, and in...
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...Barilla: Coordinating Supply and Demand OPIM: 615, Class 8 Kunal Mahajan (Penn ID: 56704329) Question 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? JITD was targeted at solving two issues in the supply chain- high inventory and stock outs in stores. A. High Inventory Barilla, distributors and retailers were all carrying excess inventories which caused a drain on profits in the entire business chain because of the high cost of carrying inventory- warehousing, transportation, scrapping etc. The underlying reasons for the high inventory were: SKU & Supply Chain Complexity: The safety stock/inventory required in the supply chain increases with increased complexity. Barilla made Pasta in 200 different shapes and sizes and was sold in over 470 different packaged SKUs. Additionally, the Barilla products were in 100,000 stores in Italy, which also increased the overall complexity. Demand Fluctuation: The fluctuations in end demand for Pasta meant that there was a bullwhip effect across the supply chain leading to increased inventory at all points. o Lack of proper demand forecasting: The Distribuzione Organizzata’s (DO’s) did not employ any sophisticated forecasting methodologies to place order with Barilla. Instead the orders were based on replenishment of stock on need basis. o Over dependence on promotions: The Barilla sales teams used trade promotions...
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...Leah Zorzi Barilla Case March 31, 2015 Problem A major problem for Barilla is the fluctuation of demand. For one I noticed many different fluctuations in exhibit 12 with demand from Cortese Northeast DC. This can be caused by many different factors such as seasonal demand. (More lasagna noodles are sold around Easter). A fluctuation in demand depending on seasonality is a predictable. Other factors that affect this is a long lead time (10 days), volume and transportation discounts, large variety of packaging and types of products. Also, there are no minimum or maximum quantity orders. The distributors lack forecasting tools and systems. They take full advantage of promotional transportations discounts, stocking up when this occurs and living off the high volume they purchased when the promotions are not going on. Besides the lack of a forecasting system there is a lack in communication between all segments such as manufacturing, distribution, marketing, and retailers. The complexity of the supply chain also causes Barilla issues. There are a variety of different strategies based upon the different customers Barilla has. For example they sell their products to large grocery stores, as well as small mom and pop places. This ranges the strategies. The demand is unpredictable (also there is no system for predicting demand). A bullwhip effect happens because of the unpredictable demand. The bullwhip effect is seen in exhibit 12 when there are large rises in inventory orders...
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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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...logistic would like to explore and improve Barilla inventory system to Just-In Time Distribution (JITD). This inventory system was originally proposed by Brando Vitali, rather than following the traditional practices of delivering product to Barilla distributors based on what orders they placed. Currently the resistant from Barilla’s customers and the internal sales/marketing department creates difficulties and little progress of implementing JITD. The new strategy will include combination of implementation of Just In Time Distribution (JITD) and reduce variability of products. Implementing JITD would solve a lot of the organizational issues that exist with Barilla however, barilla needs to convinced their internal staff and ensure that employees will not be affected and will be getting their incentive in a different method. By setting up information meetings and obligatory workshops in regards of the inventory process or any changes in order to keep Barilla’s employees aware what the changes will be. Barilla will also need to convince to the retail buyers with this new innovative idea. The second part of the implementation is reducing product variability, with this Barilla able to focus on their most selling and profitable products and SKU’s and their customers will be able to stock on items that selling and giving the most profitable and popular products to their end customers. Issues Identification During the late 1980’s, Barilla suffered...
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...Executive Summary Barilla SpA, as one of Italy’s refined pasta supplier, they have come a long way in developing a renowned brand for its pasta and produce. Their supply chain and manufacturing process is heavily vertical integrated. However, recently, they are facing a number of difficult challenges and obstacles in order to meet the demand needs from its customer. There are a number of constraints in the operation process that has limited the amount of information- forecast data being flow through from the end-user consumer throughout the supply chain network and I believe that there is also a disconnection between the sales and the logistic operation. The proposed JITD system not only will increase the inventory flow between plants and distribution centre but also able to meet demand needs. They ought to address this to our distributors and to our sale staffs and list out the benefit that they can achieve as an overall. Moreover, Barilla will require to better forecast their sales and in times when there are promotions, their sales representative should work closely with their customer and communicate that information ahead of time to our supply chain logistic team such that proper allocation of resources and materials can be address. My decision is recommend hiring two Supply Chain Analysts who will act as a liaison between the sales and the DCs, where ones deal with the Northern DCs and the other tackle the Southern DCs. They will gather information and forecast...
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...Barilla SpA Case B a Exe ecutiv Sum ry ve mmar Pasta is a st P taple food of traditiona Italian cu isine, which was tradit o al h tionally produce by hand. However, today many varieties o pasta are commerc ed y of e cially produc ced and are broadly available in su upermarket across th world. Barilla SpA, an Italian ts he w p world’s larg gest pasta m manufactur rer based company, was at one point in the 1990s the w ng a a aly % e. producin 35% of all the pasta sold in Ita and 22% in Europe The previous Director of Logistics Brando Vit was con T o tali nsidered a visionary a and had prop posed the implementa ation of a Ju ust-In-Time Distribution (JITD) model within e Barilla to help comp o pensate for any unfore r eseen varia ation in prod duct orders The new s. Director of Logistics Giorgio Maggiali too on his pre M ok edecessor’ role and f ’s found it ely ng ment the JIT model. He was fac with gre opposition TD ced eat extreme frustratin to implem from bot internal and externa stakehold th a al ders. Magg iali has to f find a way t subdue the to oppositio to the ne JITD mo on ew odel, if he wants to ov w vercome the challenge of having a e es g complex distribution system, an unbending manufac x a cturing proc cess and unprecedent ted number of SKU’s. My decision is for Bar to go fo M n rilla orward with the implem ment of the JITD mode el, which will reduce unforeseen fluctuation in product demand an reduce p w u nd production costs. Buy-in from both the dis stributors...
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...BARILLA I. Hoàn cảnh lịch sử của Barilla Mì ống - một món ăn có vẻ tầm thường đối với nhiều người nhưng đối với Guido Barilla và những thế hệ dòng họ Barilla, mì ống lại chính là niềm đam mê. Vị Chủ tịch 44 tuổi này của công ty Barilla cùng với hai người anh em trai Paolo, Luca và người chị gái Emanuela đã phát triển công ty ngày một lớn mạnh trên nền tảng của một nhà máy sản xuất mì ống gần thành phố Parma, phía Bắc Italy – trụ sở của một trong những nhà sản xuất sữa lớn nhất thế giới, tập đoàn Parmalat. Thành lập: 1877 Nhân viên: hơn 16.000 người (2008) Kinh doanh: doanh thu ròng của hơn 4,5 tỷ euro (2008) 1877: Pietro Barilla mở một cửa hàng bánh mì-và-pasta ở Parma. 1910: Barilla mở nhà máy đầu tiên của mình và giới thiệu logo thương hiệu đầu tiên. 1947: cuộc chiến tranh kết thúc, Barilla di chuyển để mở rộng vượt ra ngoài Parma với một mạng lưới trên khắp Italy. 1960: Số nhân viên của Barilla đạt 1.500. 1971: US-dựa trên công ty đa quốc gia WR Grace mua nắm giữ đa số cổ phần của gia đình Barilla. 1975: Các dòng sản phẩm Mulino Bianco được tạo ra. 1987: Mulino Bianco chiếm 50 phần trăm của tổng số bán hàng của Barilla và thích chia sẻ 26 phần trăm của thị trường hàng hoá của Italy. 1998: Barilla mở nhà máy đầu tiên của mình tại Hoa Kỳ, tại Ames, Iowa. 2001: Barilla tái tổ chức thành hai đơn vị kinh doanh chính, với việc tập trung vào mì ống và nước sốt,...
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...Aligning Supply Chain Strategies with Product Uncertainties Hau L. Lee upply chain management has emerged as one of the major areas for companies to gain a competitive edge. Managing supply chains effectively is a complex and challenging task, due to the current business trends of expanding product variety, short product life cycle, increasing outsourcing, globalization of businesses, and continuous advances in information technology. The Internet has contributed to both the increasing needs and opportunities for improved supply chain management. With the Internet, companies in a supply chain can be connected in real time with information and knowledge shared continuously, new products and services can be designed to fit special market segments, and new supply chain structures can be developed to serve customers in a more direct manner. S When a company faces the pressure of excessive inventory, degraded customer service, escalating costs and declining profits, or a poor return on assets, its supply chain is out of control. On the other hand, when a company moves in to new markets or new technologies, it must have its supply chain prepared for the new business challenges and opportunities. Although there are many new supply chain concepts and fads designed to exploit the advantages of the Internet, successful companies understand that the right supply chain strategy is dependent on a number of factors: ▪ The strategy needs to be tailored to meet specific...
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