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Barilla SpA Case

Barilla prezi presentation

Enrique Trujillo

on 13 November 2012

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Transcript of Barilla SpA Case

Founded in 1875 by Pietro Barilla
21% annual growth rate during the 1980's
Worlds largest pasta manufacturer as of 1990
35% market share in Italy
22% market share in Europe
Strong Brand Image
In depth marketing Campaign Introduction: Key Issues Promotions
Communication Issues
Stock outs
High level of Inventory to help stabilize demand fluctuation
Improper demand forecasting
Bullwhip effect . Distribution structure Demand Fluctuation Bullwhip Effect Sources of Demand Fluctuation Too long of a lead time
Lead time=10 days Promotions
10-12 promotions per year No Min or Max on order quantities Holidays Cost of Demand Fluctuation Inventory
Order cost
Lost Customers due to stock-outs
Transportation cost Communication Barilla SpA Case
Adam Martinez, Jose Bustamante, Enrique Trujillo Bad Forecasting Implementation of JITD System Recommendations JITD Benefits:
Decreases wasted overtime
Decreases inventory & carrying costs
Improves Service levels
Thus, increases Return on Investments for all Recommendations
Less promotions to reduce demand fluctuations
Communication between Barilla and Sales team
Communication between sales team & distributors/retailers
Establish two way trust between Barilla and distributors
Order minimums and maximums
Run Pilot program at one or two locations
Communicate JITD benefits to distributors Poor internal Communication between Barilla and Sales staff Poor external communication between Barilla and independent distributors What is the JITD
- Barilla logistics would forecast and deliver the appropriate quantities at specific times
- Better able to meet demand
- Would allow Barilla to distribute workloads more evenly and efficiently
- Decisions on distribution are transferred to Barilla Proposed JITD - Unknown sales compensation
- Apprehensive of change
- Concerned of potential sales force reduction
- Concern of sales flattening and declining - Loss of control in ordering
- Loss of decision making authority
- Requires reversal of information flow
- Potential of Barilla padding orders to increase sales?
- Any sharing of cost savings or subsidize losses
- Any guarantees if JITD fails?
- Prefer much shorter lead times instead of JITD
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