NUID : 0019038430Barilla SpA
NUID : 001903843
Barilla SpA (A)
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. In 1990, Barilla was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% of all pasta sold in the Europe. Barilla was organized into seven divisions: three pasta divisions, the Bakery Products Division, the Fresh Bread Division, the Catering Division, and the International Division. Giorgio Maggiali, the director of logistics was becoming increasingly frustrated. His predecessor Brando Vitali, who had served as the director of logistics for Barilla before Maggiali had proposed implementing Just-in-Time Distribution (JITD), which was modeled after the popular ‘Just-in-Time’ manufacturing concept. Vitali had proposed that, rather than following 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 would instead specify the “appropriate” delivery quantities – those that would more effectively met end-customer’s needs yet would also more evenly distribute the workload on Barilla’s manufacturing and logistics system. Analysis:
Why did Vitali Propose JITD for Barilla and what are the challenges it would help Barilla overcome: Demand Fluctuation: Since 1980’s Barilla was facing huge demand fluctuations and random variation in week-to-week distributor’s order patterns. The cause for this was excessive promotional marketing strategies and volume discounts offered to the distributors. Moreover there were no detailed forecasting techniques available with Barilla logistics department. Also there was no limit in order from the distributor. These demand...
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