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Barilla Spa (a)

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Barilla Spa (a)
BARILLA SpA (A)

Table of Contents
Part One: Executive Summary 3
Part Two: Immediate Issue 4
Part Three: Systemic Issues 4
Part Four: Qualitative Analysis 5
Part Five: Alternatives 6
Part Six: Recommendation 8
Part Seven: Recommendations Implementation Plan 9
Part Eight: Monitor and Control 10

Part One: Executive Summary

In order to respond to extreme demand variability and incidents of high stock out rates Barilla is currently applying pressure to both its’ manufacturing and logistics departments to restock distribution centres as quickly as possible. This is resulting in high distribution costs and a reduction in overall profits.
In the long term I am recommending that Barilla SpA implement a Just in Time Distribution (JITD) system to reduce excess inventory and eliminate stock outs at the distributor to market level of the distribution chain.
The new system will include a forecasting and planning system based on information provided by the distributors on a day-to-day basis. The JITD will reduce inventory to acceptable levels and will reduce inventory carrying cots. It will also flatten demand resulting in cost savings at the manufacturing and shipping levels. It will also provide an opportunity for new sales promotion types and levels.
Initially the new system will be implemented on a trial basis and at the end of the trial with successful performance indicated; the system will be presented to internal departments as well as distributors.
This report will be used as a basis for discussion in our production meeting at the end of the week.
Giorgio Maggiali
Director of Logistics
Barilla SpA (A)
December 4, 2012
Part Two: Immediate Issue
Barilla SpA is experiencing difficulty in the manufacturing and logistics sectors of their operation because of an extreme variability in demand of their pasta products. Though demand for pasta in Italy is flat Barilla has been experiencing sudden spikes in demand for varying types of pasta from
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