Brailla Spa

Case Study # 1 – Brailla SpA

Module # 1- Session # 5- Supply Chain Inventory Management

Instructor – Romeo Callegaro

Submitted by – Michael Paniccia

Candidate # - 2006896

Table of Contents

Executive Summary 

Report

Conclusion 

Executive Summary

With the burden of growing and fluctuating demands placed on the manufacturing and distribution of Barilla, their director of logistics Giorgio Maggiali wanted to make headway on an innovative idea that his predecessor came up with. Giorgio wanted to look at implementing Just-In-Time Distribution (JITD).

Rather than follow the traditional practice of delivering products to Barilla’s distributors based on their orders, they would determine an appropriate level of replacement product and delivery that quantity only.

Some of the resistance to this proposed idea came from internal sources. The Sales department was worried about a reduction in responsibilities. There was also some fear that Barilla didn’t have the sufficient infrastructure to handle JITD. Externally, distributors were unconvinced and skeptical about the effectiveness of the system. They also felt that it gave too much power to Barilla.

Report

Even though Barilla was the largest manufacture of pasta in the world, they had many issues that needed to be addressed if they wanted to increase market share and increase margins. Under their current distribution system, Barilla allowed their distributors to determine what they wanted to order. They also gave discounts to encourage larger sales volumes.

Some issues that Barilla faced were strains on manufacturing and logistics because it was very difficult to deal with demand swings. Margins were also shrinking which forced Barilla to look into a better way to do things.

Director of Logistics Giorgio Maggiali wanted to resurrect an idea that was developed a few years earlier. When it was first introduced, there was not enough buy in from management and customers. Unfortunately Giorgio encountered the same issues that his predecessor had. In order for JITD to be effective and eliminate the current issues, Giorgio needed to have buy in from Senior Management, Sales and Distributors. Giorgio needed to demonstrate the benefits of JITD to answer all the concerns.

For the manufacturing concerns, he had to show them that it would reduce cost, strengthen the relationship with distributors and reduce inventory levels.

For the distributor’s concerns, Giorgio had to demonstrate that this change would add additional customer service and reduce overall handling costs. Also they shouldn’t be afraid to share sales information with Barilla because this information can only make the transition go much smoother.

The objections from sales are a little bit more difficult overcome. It is very important that Maggiali demonstrate that their roles wouldn’t be reduced, but be moved into a different direction. They need to ensure that they are getting correct and timely sales information from the distributor. Without this information, they could run into “stock out” situations by not having enough products in the warehouses.