Barilla SpA Case Study
Define the Problem: Describe the type of case and what problem(s) or issue(s) should be the focus for your analysis.
Type: Supply Chain
- Extreme demand fluctuations – week-to-week variation in distributors order pattern, strained Barilla’s manufacturing and logistics operations: high inventory, stock out, low fill rate to customers.
- Pressures to manufacturing in terms of production lead-time and availability of the product - High inventory cost and manufacturing cost due to operational inefficiencies - Strong resistance for JITD (Just In Time Distribution) Program implementation, either from Barilla’s distributor or its own sales and marketing department or organization. - Distributors inability to carry large number of SKUs
- Suffering from thinning margins, both manufactures and retailers, refer to high costs of distribution channel
- Is JITD program feasible in our environment? What kind of customer Barilla should target? And how to convince them?
List any outside concepts that can be applied: Write down any principles, frameworks or theories that can be applied to this case.
Fisher Supply Chain Framework:
Products Classifications: Functional Versus Innovative Products. Supply Chain Types: Physically Efficient Versus Market-Responsive Supply Chains Matching Supply chains with Products:
List relevant qualitative data: evidence related to or based on the quality or character of something. -
Barilla differentiated their company with a high quality product supported by innovative marketing programs.
Raw ingredients were transformed to packaged pasta on fully automated 120-meter-long Copyright © 2011 Harvard Business School Publishing This document is for use only with the Harvard Business Publishing ‘Case Analysis Coach’.
Raw Material mixing
Rolling to sheet
2 General categories of Barilla’s product line:
o “Fresh” Products: fresh pasta products, fresh bread.
o “Dry” Products: dry pasta, and longer shelf-life bakery products (cookies, biscuits, flour, bread sticks and dry toast).
Most Barilla products were shipped from plants to 1 of 2 Central Distributions Centers (CDCs) exclude fresh bread.
Exhibit 8 Barilla Distribution Patterns
Barilla products were distributed through 3 types of retail outlets: o Small independent grocers: 35% of Barilla’s dry products o Supermarket chains: 45.5% dry products
o Independent supermarkets: 19.5% dry products
GDs (Grand Distributors) and DOs (Organized Distributors) purchased product from the Barilla CDCs, maintained inventory in their own warehouse.
Barilla’s Sales and marketing strategy based upon a combination of advertising and promotions. Promotion-based strategy using old-fashioned distribution system, where buyers expect frequent trade promotions
Implementation of JITD failed because of both customer and internal marketing and sales department weren’t supporting due to lack understanding.
List relevant quantitative data: evidence related to or based on the amount or number of something. -
Barilla’s plants have 11 lines produced 9,000 quintals (900,000 kilos) of pasta each day. Typically Distributor’s warehouse held a two-week supply of Barilla Dry products in inventory. Barilla divided each year into 10 to 12 “canvas” periods, typically four to five weeks in length, each corresponding to a promotional program. During canvas period distributor could buy as much product as desired to meet current and future needs.
Exhibit 12 Weekly demand for Barilla products from CDCs
Exhibit 13 Sales and Stockouts, Inventory at DC.
Describe the results of your analysis: What evidence have you accumulated that supports one interpretation over...
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