SUMEET SHARMA 18FPM002

BARILLA SPA
AYUSH KUMAR 18PGP256
SATYAJIT PATRA 18PGP252
VENU VARDHAN 18PGP246
VEDANT MUNDADA 18PGP245
PRASAD RATHI 18PGP238
INTRODUCTION TO BARILLA SPA
•Italian pasta manufacturing company, established in 1875
•Headquarter is near to Pedrignano, largest pasta plants
•Largest pasta manufacturer in the world
•Vertically integrated company, flour mills, pasta plants, and bakery products
•Categorized products as dry and fresh
•Offering variety of pasta and products, over 800 SKUs
•High variance in demand
•High replenishment time
•Should we go with Just-in-time distribution (JITD) or not?
 1. DIAGNOSE THE UNDERLYING CAUSE OF
THE DIFFICULTIES THAT THE JITD PROGRAM
WAS CREATED TO SOLVE. WHAT ARE THE
BENEFITS AND DRAWBACKS OF THIS
PROGRAM?
 Difficulties and their underlying cause

 Extreme Demand Fluctuations

 Comparable product lead times and their shelf life

Time (in
Sr. No Phase days)
1 CDC (Inventory) 30
CDC - Distributor
2 (Transport) 8
3 Distributor (Inventory) 14
Distributor - Retailer
4 (Transport) 2
5 Retailer - Customer 14

Total (in days) 68

Total (in weeks) 9.71

 Inability of Distributors to carry large inventory (Number of SKUs)

 Higher manufacturing and inventory holding costs

 Benefits
 Reduced Manufacturing Costs
 Reduced inventory holding costs
 Increased Service Level
 Better forecasting of Demand
 Reduced Distribution Costs
 Faster Product Turnover
Drawbacks

 Increased risk of stock – out, in case of supply chain disruption

 Inability to run trade promotion
 Difficult to convince the different stakeholders
 Risk of losing distributor inventory space to competitors
 Heavy investment required for putting Information systems in place
2. WHAT CONFLICTS OR BARRIERS INTERNAL TO BARILLA DOES THE JITD PROGRAM
CREATE? WHAT CAUSES THESE CONFLICTS? AS GIORGIO MAGGIALI, HOW WOULD
YOU DEAL WITH THESE?

Marketing Manufacturing Distribution center

Departmental efficiency by working in silos instead of focusing on
organizational objectives.
Operations department goals were:
 Reducing the inventory levels at different units and its holding cost.
 Low setup cost
 Reduce the lead time Marketing

While Sales and Marketing department had different issues and

concerns, which were:
 Compensation of marketing personnel is positively related with the sales.
 Job-pruning
 Low inventory lead to stock-out scenario, in case of high demand Manufacturing
 Low inventory gives space to competitors
 Low control over dictating the number

Distributors will lose the volume discount as the required quantity is

directly supplied by the manufacturing plant.
Distribution center
Involvement of top-management team.
Objectives
Convince top-management to set the mission and vision for the company.
Then formulate strategy to achieve the objectives by including various departments
Share details of benefits for long-run.
First, target high quality product purchaser over normal pasta buyers.
Second, target the international market (growth of 20-25% per year.)
Lastly, pilot project on Barilla’s distribution center
JITD will help sales team to keep a balance between the demand of various SKUs.
Low inventory
Change in job role of sales-person
Sharing of the profit with different stake holders.
Improve coordination among the players
Propose an incremental deployment of Information System to collect the Point-of-sale
information
Lead time reduction
3. AS ONE OF BARILLA'S CUSTOMERS, WHAT
WOULD YOUR RESPONSE TO JITD BE? WHY?
 Positive Aspects

 Accountability of Stockouts passed to the company

 Saving of inventory levels

 Less Lead times

 Low holding cost

Negative Aspects

 Confidential data

 Loss of Autonomy / Loss of stock-in option in case I feel that company prediction is different from
my perceived local demand of the product
4)IN THE ENVIRONMENT IN WHICH BARILLA OPERATED
IN 1990, DO YOU BELIEVE JITD WOULD BE FEASIBLE?
EFFECTIVE? IF SO, WHICH CUSTOMERS WOULD YOU
TARGET NEXT? HOW WOULD YOU CONVINCE THEM
THAT JITD PROGRAM WAS WORTH TRYING? IF NOT,
WHAT ALTERNATIVES WOULD YOU SUGGEST TO
COMBAT SOME OF THE DIFFICULTIES THAT BARILLA'S
OPERATING SYSTEM FACES?
As per technological environment is considered JITD is feasible with few
modifications
The problem lies in the existing system are longer lead times, long setup times,
rigidity of the process
Distress within the organisation and needs co-ordination and alignment between the
departments
Despite having technological progress there exist operational challenges to
overcome for smooth transition of JITD
Barilla also operated its own depots, so they could directly target the Supermarkets
and the Signora Maria shops
Pilot project
Information flow without distortion
Disintermediation reduces cost, more discounts can be given to customers(EDLP)
Subsidised computer systems to stores for sharing POS information for better
Inventory management
Win-win by reducing cost and lead times
Training should be provided at all levels to communicate the benefits and efficient
handling