Barilla SpA

Introduction
 Giorgio Maggiali (Joined in 1988)- Director Logistics
 Observation: Bullwhip effect
 Proposed Solution JITD
 Opposition: From the distributors and from the internal sales and marketing department
 Two years from the implementation phase, no success

Company:
 Founded in 1875
 Vertically integrated (flour mills, pasta manufacturing plants, bakery-products factories)
 2000 other pasta manufacturers
 High quality product – selling through cardboxes
 Sold to American company W. R. Grace.
 Bought back by Peitro Barilla in 1979.
 Growth in 1980s (21%)
 Largest producer of pasta by 1990. (Selling: 35% in Italy, 22% in other European countries)
 3 brands: traditional (32% sales)
 3% sales: Voiello brand Neopolitan Pasta high – priced segment (Semolina Pasta Market) and
Braibanti Brand (Parmesan Pasta made up of eggs and semolina)
Industry:
 Per capita pasta consumption in Italy averaged nearly 18 Kilos per Year and it is consistent.
 A few pasta types (pasta salads – summers, egg pasta and lasgna - easter)
 Market demand is relatively flat.
Plant network:
 Flour mills, pasta plants and fresh bread plants. Some plants also produce special products such
as Christmas cakes and Croissants.
Channel distribution:
 Dry products: longer shelf life (18-24 months). E.g., Pasta and dried toasts. Medium shelf life
(10-12 weeks). E.g., Cookies.
 Dry products: 800 different packaged SKUs. Pasta – 200 different shapes and over 470 SKUs
 Distribution through two Central Distribution Centers (CDCs).
 Third – party Distributors purchased the SKUs through these two CDCs.
Logistics and Sales:
 Wide range of retailers are sold through third-party distributors