Barilla Case

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15.778, Summer 2004 Prof. Gabriel Bitran Lecture 16: Class Review, Supply Chain Management: Value of Information Class Outline: Barilla (A) case Questions about case: ▪ What are the reasons for the increase in the variability in Barilla’s supply chain? ▪ How can the firm cope with the increase in variability? ▪ What is the impact of transferring demand information across the supply chain? ▪ Can the VMI strategy solve the operational problems faced by Barilla? ▪ How can the supply chain meet conflicting goals of different partners and facilities? Where We Came From We talked about concepts and ideas (such as the diamond-shaped framework for service operations), moved on to tools (gap model, service guarantees), and then on to matching supply and demand. We are building up toward the integration of the supply chain. We had several visitors last week: Armand Fiegenbaum expressed the need to “manage capital innovation in management”, whereas we have called it “a new way of doing business”. He said we need to do business in a new way every day. He also said that people are the key – we need people capable of doing what’s required of them. We need a dialogue within the company, to have an environment of openness and meritocracy. Prof. Charles Fine explained his “double helix” concept as a continuous transformation of integration and disintegration within an industry. Small companies attack big companies, causing them to fall apart – disintegration. Companies start to vertically integrate and regroup in different way – integration. The message is essentially consistent across the speakers if we translate the jargon. The path of the next few years is pretty well understood. It is highly dependent on our ability to incorporate services into what we do. Mr. Feigenbaum said companies are shifting from hard to soft (more service-like) assets. Prof. Fine gave the example of Proctor & Gamble including services with their products when selling to Wal-Mart. Our case today is...
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