Barilla Spa

GROUP 7
ABHINAV SAHANI - 004
ANKITA KOSHTA - 006
MEGHNA CHAUHAN - 037
MOHIT MANEKAR- 035
NILESH AGARWAL- 041
 5C Analysis
Company :
Founded in 1875 by Pietro Barilla, vertically integrated corporation with flour mills, pasta plants and bakery
products factories located in throughout Italy
In 1990, Barilla was the largest pasta manufacturer 35% sold in Italy and 22% in Europe
Customers :
Customer base included households in Italy and other European countries
Collaborators :
Collaborators comprises of Barilla CDCs, Grande Distribuzione (GD) and Distribuzione Organizzata(DO),
supermarkets
Competitors :
In the 1960s, Barilla is competing in a crowded field of over 2000 Italian pasta manufacturers
Context :
There was an increasing burden on the companys manufacturing and distribution system due to demand
fluctuations
Maggialis proposal of implementing JITD is facing resistance from sales and marketing organization as well as
distributors
Problem statement and alternatives

Should Barilla implement JITD or not ?

If yes, how Maggiali should convince the distributors and sales & marketing
team for JITD implementation?

Alternative solutions if JITD is not implemented includes

Reducing lead time
Using a demand forecasting model to predict fluctuations
Benefits of JITD implementation

Improvement in manufacturing planning and reduced manufacturing

costs
Reduction in inventory levels and hence inventory holding costs
Decision of distribution shifted to Barilla
Workload distribution will be more even
Improved service levels and ROI
Week Order Sales Inventory Forecasted
Order
1 210 260 1150
2 100 320 920
3 290 270 830
By using simple 3
4 340 360 700 283
weeks moving
5 480 250 925 317 average forecasting,
6 470 310 1090 293 it can be observed
7 310 345 1050 307 that the forecasted
8 505 390 1175 302 orders at Cortese
9 325 310 1200 348 Northeast DC has
: : : : : drastically reduced.
: : : : :
Also from the
: : : : : table, it can be seen
49 400 265 900 311.6666667 that the Coefficient
50 250 260 900 298.3333333 of Variation (CV)
51 290 180 1000 291.6666667 has reduced from
Mean 337.1569 306.1765 858.4314 310.2777778 0.67 to 0.12 for
orders by using this
SD 226.9697 62.59863 301.4075 37.83804815
simple demand
CV (in %) 67.31873 20.44528 35.11143 12.19489466 forecasting.
Evaluation of alternatives
Reduction in lead time
The current lead time is ten calendar days-
very large
Very few distributors had sophisticated
forecasting systems or analytical tools for
determining order quantities
Huge stockouts experienced at the DC
(Exhibit 13)
Demand forecasting
Currently there is a lack of demand
forecasting model, which if incorporated
will increase the costs
Exhibit 12 shows the huge standard
deviation of 227 Quintals with minimum
and maximum values reaching 10 and 900
quintals respectively
Increased inventory holding costs and poor
& late product delivery
Recommendation

Implement JITD
Methods to curb internal resistance:
Since sales representatives feared reduction in responsibilities, Incentives can be provided
to sales representatives.
Building proper infrastructure for Implementation of JITD.
Get top management support in evaluating and implementation of JITD.
Methods to curb external resistance:
Convince distributors by providing incentives
Building faith amongst distributors and retailers for Barillas inventory management.
Demonstrate that JITD benefits distributors by running experiments at one or more
distribution sites.
Clearly specify the cost-benefit analysis for each distributor.
Sell the idea as a collaborative method of working both the parties are equal partners