Barilla Case Study PDF
Barilla Case Study PDF
Barilla Case Study PDF
Barilla SpA is the worlds largest pasta manufacturer The company sells to a wide range of Italian retailers, primarily through third party distributors During the late 1980s, Barilla suffered increasing operational inefficiencies and cost penalties that resulted from large week-to-week variations in its distributors order patterns
McGraw-Hill/Irwin
Exhibit 12 Weekly Demand for Barilla Dry Products from Corteses Northeast Distribution Center to the Pedrignano CDC, 1989.
Questions:
What exactly is causing the distributors order pattern to look this way? What are the underlying drivers of the fluctuations?
McGraw-Hill/Irwin
Demand Fluctuations
The extreme fluctuation in Exhibit 12 is truly remarkable when one considers the underlying aggregate demand for pasta in Italy. What does the underlying consumer demand pattern for pasta look like in Italy?
Demand Fluctuations
What are the differences and similarities between the Barilla channel and the beer distribution channel?
McGraw-Hill/Irwin
McGraw-Hill/Irwin
What is the impact of demand fluctuation seen in Exhibit 12? The distributor must build excess capacity to hold goods bought on any type of promotion, including quantity discounts, truckload discounts and canvass period discounts
What if the distributor passes the discount along to the retailers? What is the value of the promotion game?
McGraw-Hill/Irwin 2003 Simchi-Levi, Kaminsky, Simchi-Levi
Because the plant has high product change over costs, Barilla has either inefficient production or excess finished goods inventory Utilization of central distribution is low
Workers Equipment
Eliminate some of the false economics that drive traditional ordering processes
What does this mean?
McGraw-Hill/Irwin
How Can Maggiali Solve the Implementation Problems? Demonstrate that JITD benefits the distributors (lowering inventory, improving their service levels and increasing their returns on assets); Run experiment at one or more of Barillas 18 depots Maggiali needs to look at JITD not as a logistics program, but as a company-wide effort; Get top management closely involved Trust
McGraw-Hill/Irwin 2003 Simchi-Levi, Kaminsky, Simchi-Levi
Evaluation
How do you evaluate the implementation process Barilla used with Cortese?
McGraw-Hill/Irwin