Barilla Spa Essay

2298 Words10 Pages
Executive summary My decision is to promote the Just-in-Time Distribution (JITD) initiative by delivering “appropriate” quantities to the distributors based on end user information provided by the distributor themselves. This initiative would give Barilla more control over the ordering process, reducing the risks involved with improper forecasting and purchases by distributors. Labour, transport, and production costs would be reduced thanks to better planning, creating stability and order. Barilla can optimize the entire production and sales process based on more accurate end user information instead of biased distributor order patterns. My decision would result in the reduction of the Bullwhip effect, which Barilla is experiencing. It would also reduce the variable demand that is causing inefficiencies and increasing costs. This will give Barilla more control in every stage of their supply chain, allowing the company to operate at its fullest potential. Background Barilla SPA, an Italy based company, is the world’s largest Pasta manufacturer. They make 35 percent of market share in Italy and 22 percent market share in Europe. In addition to the family of pastas (macaroni, spaghetti, fusilli, etc.) it also manufactures bread, cookies, biscuits, rusks, sauces, breadsticks, etc. During the late 1980s, Barilla suffered increasing operational inefficiencies and cost penalties that resulted from large week-to-week variations in its distributors’ order patterns. Issues The largest issue effecting distributor demand is Barilla’s promotion offerings. The year is broken down into 10 to 12 canvas periods, where distributors could gain a discount anywhere from 1.4% to 10%, dependent on the product category. Promotions are offered in the forms of transportation, price, or volume discounts. Selection as to what product will be discounted does not seem to be based

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