Barilla Case Study: Tackles Mainly In Its Supply Chain And The System Within It

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Abstract

The Barilla SpA case study tackles mainly about its supply chain and the system within it. Starting from the manufacturing of the product up to the distribution and selling of it. JITD, a distribution system which might possibly minimize the cost and inventory of the company is being considered to implement in the company’s distribution system to address the fluctuation in their demand. Advantages and disadvantages of JITD were compared.

Introduction

Barilla SpA is a pasta manufacturing firm that is founded in 1875 by Pietro Barilla in Parma, Italy and currently known as the largest pasta manu-facturer in the world. Barilla owns 25 plants across Italy comprising mostly of Italian super-markets and shops, each plant focusing on a particular product such as flour mill, pasta, and other specialty products like breads, cakes, and croissants. Barilla also has two distribution centers which are responsible in distributing their products.

In their current system, after manufacturing the pasta, the Logistics unit of the company catego-rizes the products into two groups, the dry and fresh products, to be distributed to their central distribution centers (CDCs). Fresh products are delivered and kept for only three days. While dry products, are brought to either the CDCs or Barilla-run depots. Barilla-run depots distribute dry products to small independent shops. The CDCs are responsible for distributing the dry products to two types of distributors: Grande Distribuzione, which is a distribution organiza-tion responsible for distributing to supermarket chains, and Distribuzione organizzata, which is composed of many other distributors.

However, due to some problems in distribution of products, Vitali proposed that the company use Just-in-Time Distribution (JITD) on their system to minimize the cost incurred in inventory and frequent distribution of their products.

The company now faces a problem whether and how will they implement the JITD system given that many oppose the proposal.

Significance to the Industry and To Your Everyday Life

A business' activities does not end upon the completion of its product. Because their goals is to create profit by proving the customers what they want and need, part of their activities is to actually deliver these products to the customers. This is where logistics comes in. It is important that each business have a logistic process so that they a system at which to distribute these products, without having too much burden placed on either the business or the consumers or both. This burden could come in the form of costs due to missed, incorrect, and insufficient deliveries, just to name a few. Aside from that, the elements of a supply chain differ from every business. What the clients wants, such as when, how, and how much to deliver, differs from other clients. It is therefore necessary to study and analyze the existing logistics process of a busi-ness and come up with a better way to accom-plish this task.

There are also instances that logisics can be ap-plied to everyday life. Examples of which are online shopping. Online shopping is a smaller scale (smaller, in the sense that it is not a regu-lar activity, and occurs between a person (not an organization) and a business) logistics process wherein orders are sent to the company and the company delivers directly to the given address. It is important that the online shopper understand why shipping takes a certain length of time and why it costs as such.

Key Terms to Remember

JITD – Just-in-Time Distribution

CDCs – Central Distibution Centers

Chase strategy – where capacities are ad-justed to meet demand requirements over the planning horizon (1)

SKU – stockkeeping unit

Stockout – running out of inventory (2)

Application

A.Company Background

Barilla SpA is a pasta manufacturing firm that is founded in 1875 by Pietro Barilla in Parma, Italy. Currently, his son,...
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