Barilla Spa Case Analysis

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Executive Summary: Barilla was founded in 1875 as a small shop in Italy and by 1990 it became the largest pasta producer in the world. Its share was 35% of all pasta sold in Italy and 22% of all pasta sold in Europe. Barilla was organized in seven divisions: Three Pasta divisions (Barilla, Voiello and Braibanti), the Bakery Product Division, the Fresh Bread Division, the Catering Division and the International Division. Barilla divided its product line into two categories: “Dry” and “Fresh” category which represents 75% and 25% of Barilla Sales. Barilla had 800 SKUs of Dry products. Barilla was supplying its products to small Independent shops and Supermarkets (Independent and Chains. The Purpose of this case analysis is, as a decision maker Giorgio Maggiali has to decide whether to promote or discard the just in time distribution initiative (JITD). After careful analysis we have suggested that Barilla should implement JITD at pilot level and once successfully implemented with positive results it should be implemented everywhere in stages. Issue Identification: The following are the list of issues that must be addressed: • Large Variety of Pasta: Barilla has 800 SKU’s of Dry Pasta and has 200 different shapes and sizes, all of these are sold in 470 different packaged SKUs. Having such he variety of products causes’ problem in supply chain as each variety needs different time in packaging. • Random Trade Promotions: Barilla sales strategy relied heavily on the use of trade promotions to push product into grocery distribution network. It has to offer promotional discounts many times of the year to achieve the desired sales. Due to Random trade promotions and Differentiated sales strategy it faces the problem of demand variability. • Order based Production: The manufacturing is based on order and has an average of 10 days lead time. An Order

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