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Barilla Case. To make Barilla, the number one manufacturer of pasta Barilla employs massive state of the art factories that can not only produce mass quantities, but produce the variety of pasta to satisfy the world.

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Introduction

´╗┐Barilla Case Write-Up Barilla and JITD In 1990 Barilla is the largest pasta manufacturer in the world. It manufactures 35% of all pasta sold in Italy, and 22% of all pasta sold in Europe. Barilla markets extensively through advertising and trade promotions for all of its divisions: pasta, bakery, fresh bread, catering, and international. In it?s product categories, Barilla has fresh and dry products. The dry products (dry pasta, dried toast, cookies etc.) are offered in about 800 different SKU?s. Pasta alone is made in 200 different shapes and sizes and is sold via 470 different SKU?s. Barilla caters to it?s consumers of pasta with three different pasta divisions (Barilla, Voiello, and Braibanti), each at a different price point. To make Barilla, the number one manufacturer of pasta Barilla employs massive state of the art factories that can not only produce mass quantities, but produce the variety of pasta to satisfy the world. In fact, just one of its factories, the Pedrignano plant, is capable of producing 900,000 kilos of pasta a day. The competitive dimensions important for the logistics flow of an item like pasta are flexibility and delivery. The metrics to focus on include order size (Q) and re-order (R) quantity across various supply chain entities (retailers, DOs, CDCs). The efficiencies of information flow among various entities, as well as the response rate, queue size and lead time at various points in the distribution channels are also important. ...read more.

Middle

Overall, the situation is a win-win for both parties as there are lower inventory costs, faster delivery times and both parties attain or exceed their previous service levels. Besides just implementing a cross-docking scenario described above, there are a variety of other options at disposal for JITD system and operational efficiencies to consider. If Barilla gets control of the inventory management in the whole supply chain, here are some of the additional recommendations for improving the logistics. First of all, there could be total system integration amongst all the supply chain parties to improve visibility of current data and help Barilla forecast future demand. The system would also help create a pull system if we are integrated down to the local supermarket shelf level. If Barilla fully integrates the systems, it can re-negotiate the re-order points, order quantities, and help reduce inventories and safety stock system-wide across all channels. There would be higher service levels, lower inventory costs, and lower lead times across the system. To further reduce lead times within its supply chain, Barilla could hire lean consultants to reduce the setup times amongst various batch loads. The retooling of machines to make quick batch changes can make Barilla factories much more flexible to the variance in consumer demand. With lower costs of batch changes, Barilla could introduce newer varieties faster to test the market. In case of a shortage or high variance in demand, the back orders could be delivered much faster, making all the Barilla supply chain customers happy. ...read more.

Conclusion

Barilla?s current sales and marketing staff, with proper incentives placed on getting buy-in from external parties, can help move the process along faster. Also, the technologies to get implemented may require capital outlay from Barilla to get its local suppliers up and running on it?s system. Proper use of discounts and incentives to local supply chain participants will get the process going faster. Further, it is also crucial that Barilla internally optimize its production and reduce its setup costs and lead times to show how that it is using its resources to make its supply chain customers happier. Some problems to execute such a plan include getting the corporate go ahead on revised incentives plans to internal sales and marketing departments as well as the supply chain participants. Even if Barilla can get most of its major retailers involved, getting and storing all the data and reacting in real-time to market fluctuations can be costly, especially in the 1990s. Furthermore, if a strike happens, there can be greater collateral damage to the shelf space that Barilla currently enjoys at retailers, as there would be simply less inventory in the system. However, Barilla is a market leader and to stay in control and gain market share, it needs to implement a cutting edge technology solution. Barilla needs to go ahead with the slow process of buy-in from its major supply chain partners (with technology support & subsidies from Barilla) through a focused sales and marketing program (with incentives to staff) to get the JITD program implemented. ...read more.

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