Barilla: Illustration of Effective or Ineffective Management

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  • Topic: Barilla Group, Italy, Parma
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________________________________________________________________________________________________________________ Professor Janice H. Hammond prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 1994, 2006, 2008 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1- 800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 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-In- Time” 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 and improve its demand forecasts. Perhaps more disconcerting was the internal resistance from Barilla’s own sales and marketing organizations, which saw the concept as infeasible or dangerous, or both. Perhaps it was time to discard the idea as simply unworkable. If not, how might he increase the chances that the idea would be accepted?

Company Background
Barilla was founded in 1875 when Pietro Barilla opened a small shop in Parma, Italy on via Vittorio Emanuele. Adjoining the shop was the small “laboratory” Pietro used to make the pasta and bread products he sold in his store. Pietro’s son Ricardo led the company through a significant period of growth, and in the 1940s, passed the company to his own sons, Pietro and Gianni. Over time, Barilla evolved from its modest beginnings into a large, vertically integrated corporation with flour mills, pasta plants, and bakery-product factories located throughout Italy. 1SpA (Società per Azioni) can be translated as “Society for Stockholders” and interpreted as “Inc.” Purchased by Irem Ureten (iureten@dapa.com.tr) on January 02, 2013 694-046 Barilla SpA (A)

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In the 1960s, competing in a crowded field of over 2,000 Italian pasta manufacturers, Pietro and Gianni Barilla differentiated their company using a high quality product supported by innovative marketing programs. Barilla revolutionized the Italian pasta industry’s marketing practices by creating a strong brand name and image for its pasta, selling pasta in a sealed cardboard box with a recognizable color pattern, rather than in bulk, and investing in large-scale advertising...
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