In addition to the family of pastas macaroni, spaghetti, fusilli, etc. Words: 1326 - Pages: 6. Neither you, nor the coeditors you shared it with will be able to recover it again. Bar ill a has a ver y comp lex dis tri buti on net wor k cons ist ing of Gra nd Di str ibu tor s ow ned by lar ge Sup erm ark et chai ns , Or gani zed Distributors independent third party distributors in addition to its own depots. Distributors will provide actual sales data which will be the basis of forecasting and production thus increasing in efficiency in operation and alleviating stock out among distributors. For example, the sales department, sales representatives receive more on their compensation through commission from their sales.
Not enough inventory or Too much inventory Small range of highly similar products Large volumes at controlled rates Tightly coupled linear sequence Product or customer dictates layout Line must keep running Inflexible - greater changeover time Pedrignano plant The myth. We consider that in order to condense the Bullwhip effect being experienced by Barilla, their supply chain would have to be Centralized. Whatis the impact of such fluctuation? Then it is not a problem to deal with the distributors, all the members share a common goal, to prevail on the distributors, to achieve the aim they have process to take. Distributors have different types of customer supermarkets vssmall independent shops and various different strategies. This was a radical change from the current and more traditional supply-chain setup where the distributors were not sharing any data and could place orders at will. By not implementing the just in time distribution approach Barilla SpA and its distributors most of the time faces a relatively high cost because there is no concept of predicting the actual demand. The dry products category includes dry pasta and longer shelf-life bakery products, whereas, the fresh products category includes fresh pasta products with 21-day shelf life and fresh bread with one-day shelf life.
Firstly the demand from customers can vary due to seasonality e. Second, in order to minimize its inventory. Case Barilla SpA A Discussion Question 1. Externally, distributors did not want to relinquish power over managing their inventory. Stockouts cost the company valuable sales revenue when demand cannot be met and excess inventory results in additional holding costs. By nature, their pasta products experience waves of high and low demand. A fluctuation in demand depending on seasonality is a predictable.
For instances, there are products more difficult to produce, and thus it will require more time and effort on the production, with a high fluctuation on the demand, Barilla is very difficult to plan for the inventory level, and thus make the production. Part 2: Immediate Issue The immediate issue faced by Barilla is. After all, the forecast data that Barilla would in theory have, would essentially sell the products themselves. Barilla SpA ------------------------------------------------- Rohit Agarwal Barilla SpA ------------------------------------------------- Rohit Agarwal Barilla SpA A Introduction: Barilla was founded in 1875 when Pietro Barilla opened a small shop in Parma, Italy on via Vittorio Emanuele. The tremendous variations occur in demand due to the many factors.
We think that a centralized supply chain with Barilla controlling the orders will result in better margins for all the partners. Due to fluctuations, the manufacturing and logistics operations are put under pressure. If and when the strategy is proven to be successful within the depots it can be sufficiently pitched to the distributors with a set of proven results to back it up. What are the underlying drivers of the fluctuations in Exhibit 12? What are the benefits of this program? The main resistance internal to Barilla was from the sales and marketing functions, which Barilla, until now, has relied upon for its success. What are the benefits and drawbacks of this program? Therefore, apparently there is another way to improvethe supply chain. Under this system, orders for Barilla dry products fluctuate greatly from week to week. More specifically, he should target the chain supermarkets that the Barilla-run Depots support.
. This will reduce risk and leaves Barilla without the need to have to build up inventory. Marketing and Sales departments each had separate concerns. They will be concerned about the loss of control in deciding their inventory levels. Fiat jumped as much as 3. Information flow is important to the successful management of demand in the supply chain and it is currently unidirectional. This will streamline the information flow, reduce uncertainty in demand , reduce the lead time, and decrease both finished and raw material inventory, thus making the system efficient and reducing the overall cost.
These internal bodies will for sure have a detail look at the possible pros and cons of the approach and will recommend the changes or it may be a possibility that they may not approve the idea. It means production will operate more smoothly, onlyproducing what is requested. By doing so, Barilla SpA can use that data from its distributors to better understand the demand of its products and perform better forecasting. This will also reduce the commissions for. Barilla spA had an unadvanced management, it has a bad forecasting system and has a long lead-time, usually being 10 days, and it is too long for a competitive supply chain. Publication Date: May 17, 1994.
How would you deal with them? This will eliminate demand fluctuation and the current lack of ability to plan. Barilla was organized into seven divisions: three pasta divisions, the Bakery Products Division, the Fresh Bread Division, the Catering Division, and the International Division. Barilla has a very complex distribution network including independent third party distributors and due to such a multi-echlon network, Barilla has been experiencing large amounts of variability in demand which are resulting in operational inefficiency and increased manufacturing, inventory and distribution costs. They produce 35% of all the pasta sold in Italy and 22% percent of what is sold in Europe. Examples of items to consider include transportation discounts, promotional activity, product proliferation. Theyalso thought that sales figures would be reduced due flattened demand and that the new systemwould not be flexible enough to respond to changes, and that sales promotions would no longer bepossible.