After reading the Barilla Spa(A) case, I realized that Barilla Spa has been having some difficulties with the growing burden that demand fluctuating imposed on the company's manufacturing and distribution system. Since taking the director's position Giorgio Maggiali has been trying to implement on idea that was his old directors and that would be the Just In Time Distribution (JITD). Which didn't happen at that time because Barilla's customers were unwilling to give up their authority to place orders as they as they pleased. Barilla made a reputable name for themselves in the Italian pasta manufacturing by creating a strong brand name image for its pasta and high quality product. In the 1980's Barilla enjoyed an annual growth rate of over 21 percent because there was extreme demand variability. By the 1990's barilla had become the largest pasta manufacturer in the world, making 35 percent if the pasta sold in Italy and 22 percent of the pasta sold in Europe. Barilla had some prepared inefficiencies due to high stock transport cost and industrialized expenditure. Barilla had the inability to carry large SKU's because they way customers would make four or five little orders instead of one big order. Barilla divided its entire product line into two general categories: Fresh products, including fresh pasta products, and dry products, including dry pasta. Dry products represented about 75 percent of Barillas sales. Most Barilla products were shipped from the plants in which they were made to one of two Barilla central distribution centers (CDCs): Barilla products because of their differences in perish ability and retail service requirement, who then channeled the harvest through 70 regional warehouses located throughout Italy.
How can Barilla cope with the increase in variability
Barilla increasingly felt the effects of fluctuating demand because the orders for barilla dry products often swing wildly for week to week. Such...
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