Case Study 1 Barilla SpA A
BARILLA SPA (A) BUSINESS CASE AS PRESENTED BY GIORGIO MAGGIALI
TABLE OF CONTENTS
Executive Summary P2
Issue Identification P3
Root Cause Analysis P4-6
Alternatives and Options P7-9
Recommendations P10-11
Implementation P12-13
Monitor and Control P14
Exhibit P15
Executive Summary
Barilla SpA (A) continues to be a market leader in pasta production. We are currently experiencing a growing burden of demand fluctuations for our dry pasta products putting extreme demand variability on our manufacturing and logistics operations.
Our current forecasting and analytical tools for determining order quantities coupled with distributor sales strategies that are not uniform are creating this variability. Our distributors are constantly suffering stock outs while having overabundance of other inventories. We truly are not utilizing our inventory capacities.
We need to review our current formats and packaging of our SKU’s for dry pasta as it appears we are redundant on SKU’s as evidenced by some of our distribution centres carrying as few as 150 of the 800 available SKU’s.
We first must remedy these internal problems and create internal synergy and buy in before we can tackle the issues of distributor distrust of our reasons for wanting to change the current ordering and inventory process by implementing the new JITD inventory management. On previous roll outs it did not go as well with much negative feedback and ultimate failure.
I still support the JITD program and this document will provide information on how we can make this vendor managed inventory work for all stakeholders. Most importantly more effectively provide what our customers demand.
Issue Identification
Short Term – Tactical
1. Demand fluctuations imposed on the company’s manufacturing and distribution system is viewed as the main issue. This problem is causing wildly swinging orders from week to week straining manufacturing and logistics. Holding sufficient finished goods
TABLE OF CONTENTS
Executive Summary P2
Issue Identification P3
Root Cause Analysis P4-6
Alternatives and Options P7-9
Recommendations P10-11
Implementation P12-13
Monitor and Control P14
Exhibit P15
Executive Summary
Barilla SpA (A) continues to be a market leader in pasta production. We are currently experiencing a growing burden of demand fluctuations for our dry pasta products putting extreme demand variability on our manufacturing and logistics operations.
Our current forecasting and analytical tools for determining order quantities coupled with distributor sales strategies that are not uniform are creating this variability. Our distributors are constantly suffering stock outs while having overabundance of other inventories. We truly are not utilizing our inventory capacities.
We need to review our current formats and packaging of our SKU’s for dry pasta as it appears we are redundant on SKU’s as evidenced by some of our distribution centres carrying as few as 150 of the 800 available SKU’s.
We first must remedy these internal problems and create internal synergy and buy in before we can tackle the issues of distributor distrust of our reasons for wanting to change the current ordering and inventory process by implementing the new JITD inventory management. On previous roll outs it did not go as well with much negative feedback and ultimate failure.
I still support the JITD program and this document will provide information on how we can make this vendor managed inventory work for all stakeholders. Most importantly more effectively provide what our customers demand.
Issue Identification
Short Term – Tactical
1. Demand fluctuations imposed on the company’s manufacturing and distribution system is viewed as the main issue. This problem is causing wildly swinging orders from week to week straining manufacturing and logistics. Holding sufficient finished goods