Topic > Barilla Case Study - 2004

Main problemThe Barilla production and distribution system is continually and increasingly burdensome due to the enormous fluctuations and variability in demand on a weekly basis, so much so that Brando Vitali, former Director of Logistics, proposed the idea of ​​Just-In-Time-Distribution (JITD) as an alternative to Barilla's traditional practice of delivering the product to distributors based on orders placed. Instead, Barilla's logistics organization will specify and determine the delivery quantities. This issue specifically deals only with Dry Barilla products which represent 75% of their sales. The problems with the current traditional and JITD ordering method are analyzed and listed below: Traditional Method Immediate Problem: Current distribution order procedures consist of most distributors monitoring their own inventory levels and placing orders with Barilla once once a week. With this system, orders for Barilla dry products fluctuate significantly from week to week. This extreme variability in demand has put production and logistics operations to the test. Systemic problems: Barilla's fully automated production system is not designed to meet and accommodate large fluctuations in demand. Pasta production sequences made it very difficult to produce particular types of pasta that had been sold out due to unexpectedly high demand. The temperature and humidity in the oven are precisely specified for each pasta shape and shape and are strictly controlled to ensure a high-quality product. Barilla pasta factories were also specialized in the type of pasta produced and even within the same pasta family, individual products were assigned to the factories based on shape and size. This procedure and requirements not only limit the capacity to produce... half of the paper... products. I believe that attention should be paid to independent retailers supplied by Barilla warehouses and to retailers served by distributors who have not joined the program. Barilla-owned regional warehouses distribute 35% of their products to small independents. Focusing on this segment could offer Barilla the opportunity to collect the usage/demand data it needs directly from retailers. These retailers would become more committed to Barilla when they realized that their orders would flow more efficiently and they would save money on in-store inventory. MONITORING AND CONTROL Measuring the success and implementation of JITD would be based on “buy-in” and feedback from the sales and marketing team and also from all levels of distributors along with the ability to reduce the load on the manufacturing organization and logistics with Barilla.