• Founded in 1875 as a small shop in Parma, Italy by

Pietro Barilla
• World’s largest pasta producer as of 1990
• 21% annual growth rate during 1980’s
• Pasta Share - 35% in Italy and 22% in Europe
• 2 Product Categories – 75% Dry and 25% Fresh
About Barilla • Strong Brand Image
• Dry Products had Long ( 18 to 24 Months) or
Medium(10 to 12 weeks) Shelf Lives
• 800 SKUs of Dry Products
• Retail Outlets – Small independent shops and
Supermarkets (Chain and Independent)
Issues

•- Extreme demand fluctuations (Since 1980)- week to week variation in

distributors’ order patterns (Strained)
•- Barilla’s manufacturing and logistics operations: high inventory, stock
out, low fill rate to customers.
•- Pressures to manufacturing in terms of production lead-time and
perishability of product
•- High Inventory Carrying Cost & manufacturing cost due operational
inefficiencies
•- Strong resistance for JITD (Just In Time Distribution) Program
implementation
Objectives of Barilla

Reduce the overall inventory at CDC

Reduce the lead time for delivery

Reduction in erratic demand

Barilla Supply Chain
Sources of demand Fluctuation

Too long of lead time (~10 days)

 Excessive Promotional activities (10-12 promotions per year)

 Volume Discount

 No Min or Max on order quantities

Bad Forecasting: Lack of sophisticated forecasting techniques

 Organizational Deficiencies Operational Inefficiencies

• GD small salesforce rarely visited GD • High number of dry packaged SKUs

warehouse
• Distributors and Retailers carried
• Poor communication between Sales too much inventories
staff and Barilla
• Stock-outs occurrences, longer lead
• Used price promotions as a method to times
push the product.
• Lack of infrastructure to handle
• Sales Incentives to the Sales JITD
representative