Manager
BARILLA SpA (A), (C) and (D)
1. Draw a flow diagram for Barilla dry products sold through distributors. Your diagram will have four major sections: Barilla production, Barilla Finished Goods Inventory, Distribution Centers, and grocers. Indicate the flows of both physical goods and information. At appropriate places on your diagram, collect any relevant statistics mentioned in the case, for example on inventories, lead-times, etc.
Please refer to the following page (page 2 of this document) for the process flow diagram for Barilla dry products sold through distributors.
INSERT PROCESS FLOW DIAGRAM
2. What are the problems and difficulties facing the supply chain? What is their impact? Diagnose their underlying causes.
The supply chain of pasta and pasta-related products in Italy was facing significant problems, including excessive inventory levels, high levels of stock-outs, extreme reliance on promotional activities, inefficient logistics operations and poor communication and cooperation between the supply chain participants. The industry had not leveraged technology to improve communication amongst its members, tracking of inventory or demand forecasting. These problems resulted in higher inventory carrying costs, as supply chain members sought to reduce the frequency and magnitude of stock-outs. Furthermore, industry suppliers competed fiercely on price, resulting in extreme peaks in demand during promotional periods.
The core cause of these problems was unpredictable demand, which resulted in higher inventory levels and carrying costs, in addition to making logistics operations more difficult. Because there was limited demand visibility within the supply chain, any significant fluctuation in demand potentially resulted in stock-outs. Poor communication and cooperation amongst the supply chain participants also contributed to the limited visibility of demand within the supply chain. Because the supply chain participants
1. Draw a flow diagram for Barilla dry products sold through distributors. Your diagram will have four major sections: Barilla production, Barilla Finished Goods Inventory, Distribution Centers, and grocers. Indicate the flows of both physical goods and information. At appropriate places on your diagram, collect any relevant statistics mentioned in the case, for example on inventories, lead-times, etc.
Please refer to the following page (page 2 of this document) for the process flow diagram for Barilla dry products sold through distributors.
INSERT PROCESS FLOW DIAGRAM
2. What are the problems and difficulties facing the supply chain? What is their impact? Diagnose their underlying causes.
The supply chain of pasta and pasta-related products in Italy was facing significant problems, including excessive inventory levels, high levels of stock-outs, extreme reliance on promotional activities, inefficient logistics operations and poor communication and cooperation between the supply chain participants. The industry had not leveraged technology to improve communication amongst its members, tracking of inventory or demand forecasting. These problems resulted in higher inventory carrying costs, as supply chain members sought to reduce the frequency and magnitude of stock-outs. Furthermore, industry suppliers competed fiercely on price, resulting in extreme peaks in demand during promotional periods.
The core cause of these problems was unpredictable demand, which resulted in higher inventory levels and carrying costs, in addition to making logistics operations more difficult. Because there was limited demand visibility within the supply chain, any significant fluctuation in demand potentially resulted in stock-outs. Poor communication and cooperation amongst the supply chain participants also contributed to the limited visibility of demand within the supply chain. Because the supply chain participants