Barilla: Integrated Italian Pasta Manufacturer
Executive Summary
Giorgio Maggiali is the director of Logistics for Barilla and was appointed to this position when his predecessor Brando Vitati was promoted. Vitati had proposed a Just in Time Delivery (JITD) model for Barilla. Vitati has commented on the “thinning margins” the industry was experiencing and the need to “take costs out of our distribution channel without compromising service”. He felt operations could be improved if Barilla was responsible for determining the quantities and delivery schedules to their customers. Giorgio is frustrated with the opposition and resulting lack of progress in implementing this new process.
My decision upon reviewing the information provided in the case is to recommend that Barilla continue to implement JITD focusing on dry goods shipped to distributors. Maggiali must first convince Barilla’s employees (Sales especially) that the JITD system will be a success before influencing its distributors. Sales personnel and distributors will have to work together to implement the JITD program. The system will require the distributors to share their sales data with Barilla, who would then forecast and deliver appropriate amounts of products to the distributors at the right time in order to effectively meet demand. This will not only result in better performance in terms of time and money but also promote trust and good relations among all the partners in the supply chain.
Barilla made its mark in the world by taking a commodity and selling it in a very different way. They now need to apply this innovative thinking again and use the JITD system and reduce the bullwhip effect in its supply chain.
Issue Identification
Barilla SpA is a large, vertically integrated Italian pasta manufacturer and in 1990, was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% of all pasta sold in Europe. Barilla is organized into seven divisions: three pasta divisions named Barilla, Voiello and
Giorgio Maggiali is the director of Logistics for Barilla and was appointed to this position when his predecessor Brando Vitati was promoted. Vitati had proposed a Just in Time Delivery (JITD) model for Barilla. Vitati has commented on the “thinning margins” the industry was experiencing and the need to “take costs out of our distribution channel without compromising service”. He felt operations could be improved if Barilla was responsible for determining the quantities and delivery schedules to their customers. Giorgio is frustrated with the opposition and resulting lack of progress in implementing this new process.
My decision upon reviewing the information provided in the case is to recommend that Barilla continue to implement JITD focusing on dry goods shipped to distributors. Maggiali must first convince Barilla’s employees (Sales especially) that the JITD system will be a success before influencing its distributors. Sales personnel and distributors will have to work together to implement the JITD program. The system will require the distributors to share their sales data with Barilla, who would then forecast and deliver appropriate amounts of products to the distributors at the right time in order to effectively meet demand. This will not only result in better performance in terms of time and money but also promote trust and good relations among all the partners in the supply chain.
Barilla made its mark in the world by taking a commodity and selling it in a very different way. They now need to apply this innovative thinking again and use the JITD system and reduce the bullwhip effect in its supply chain.
Issue Identification
Barilla SpA is a large, vertically integrated Italian pasta manufacturer and in 1990, was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% of all pasta sold in Europe. Barilla is organized into seven divisions: three pasta divisions named Barilla, Voiello and