Case Analysis of Barilla Spa

Topics: Barilla Group, Italy, Logistics Pages: 8 (2144 words) Published: November 29, 2009

Problem seen in Barilla SpA by Giorgio Maggiali-Director of logistics is the demand fluctuations imposed on the company manufacturing & distribution system.

Brando Vitali which was an earlier Director of logistics in Barilla SpA proposed an idea of Just- in- time distribution (JITD) for this problem. Instead of Distributors giving orders according to them, company should deliver its products on time by its own logistics system on the basis of end consumer needs.

By implementing this idea of JITD, company faces many problems like -----

-Barilla customers are unwilling to share their business data with company due to which company is unable to predict forecast demand & delivery decisions.

-Company own sales & marketing people feel that if this idea is successful they will be out of the company as their will be no need of sales & marketing team after this JITD implementation.

Now scenario was that no one except this idea neither internally by company own employees especially sales & marketing people & nor externally by its own distributors & retailers.

In 1875 Pietro barilla started Barilla SpA in Italy .Pietro passed company to his son Ricardo which in 1940, further passed to his sons-Pietro & Gianni which were far more successful than their ancestors.

Core competency of a company ---- High quality products supported by innovative marketing programmes.

-Marketing practices--- creating a strong brand name & image for its pasta. -Selling pasta in a sealed cardboard box with a recognizable color pattern

Pietro & Gianni barilla made a pasta plant of 1.25 million sq.metre which was the world largest & most technologically advanced pasta plant in the world which put them deeply into the debt & they have to sell this plant to American MNC, W.R.Grace.

Now according to me this situation was due to the following factors

-Demand was not forecasted as market needed pastas in such a great quantity or not

-Logistics system of distribution was also not discussed while making a plant outside Parma city in a rural town which is 5 km away

Gurjeet Bhatia -Indore -Such a highly technological plant will definitely be highly costlier & may misbalance the financial situation of a company.

American MNC was also failed in spite of additional capital investment & professional management practices to the company due to difficult economic conditions & new Italian legislation at that time. American MNC again sold the company to Pietro Barilla. As crucial time of difficult economic condition passed on & new legislation was also been stabilized, the capital investments& organizational changes that Grace had brought to Barilla became a powerful tool for a company & company now progress a lot through expansion of existing businesses, both in Italy and other European countries.

By this we learn that –

-External factors like economic condition of a country & new legislation system plays an important role in a success or failure of a company. -Internal factors like capital investment & organizational changes also play an important role in a success or failure of a company

Amongst the 35 % of all pasta sold in Italy the traditional barilla brand represented 32 % of the market. It shows that
-People like traditional Pasta products as these products satisfies their taste most -People of Italy were of traditional culture

Half of barilla’s pasta was sold in Southern Italy and half in Northern Italy .Northern Italy has more market share than Southern Italy due to its larger size. Barillas also have a 29 % share of the Italian bakery products market.

Manufacturing & Distribution system of Barilla SpA (Seven Divisions) -Three pasta divisions ----barilla,voiello & braibanti
-Bakery product division----manufacture medium to long shelf life bakery products...
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