CASE ANALYSIS OF BARILLA SPA Problem seen in Barilla SpA by Giorgio Maggiali-Director of logistics is the demand fluctuations imposed on the company manufacturing & distribution system. GradesFixer. It varies on the type of soup, but most of the time it takes about 8 hours for the soup stock to be made. academia barilla issue free essays studymode Running an experiment of the system at one or more of the distributors sites gives other distributors an example to compare to. After being passed through an extruder, the pasta was cut to a desired length. Step 2 - Reading the Barilla SpA (A) HBR Case Study. In response to a. Barillas products are divided into Fresh products and Dry products. Another factor related to these aspects is batch ordering and, penetration pricing strategy. Instead of distributing Barillas products based on the orders the distributors placed with the company, Barillas own logistics organization would determine the product quantities to distribute that would most effectively meet end-consumers needs. PhDessay is an educational resource where over 1,000,000 free essays are Because of the way Barillas manufacturing process works, demand fluctuations have a significant impact on the companys operations. The changes in demand have triggered Barilla MEDICAL SPA's manufacturing expenses, inventory expenses, and distribution costs to increase. INTRODUCTION The issue started on February 2008 when the new appointed Managing Director of PCI Sdn Bhd, En Ghani reviewed 2007 Financial Report and found out there were recent increases. Environmental and Root Cause Analysis. This is causing his calf and hip pain. 0000114189 00000 n These strategies will be presented in this report. It maintains a leadership position among a field of thousands of Italian competitors producing and distributing brand-name pasta. Doing so will prompt less or no resistance and can be monitored closely. Implementing the JITD is a good idea for a number of reasons. Barilla's success highly depended on its' quality of product and innovative marketing programs, which created strong brand name. 0000010898 00000 n Did you know that we have over 70,000 essays on 3,000 topics in our Eventually orders disappear and cancellations pour in, making it impossible for the manufacturer to determine the real demand for its products, To support this statement, I would like to present Starbucks ' supply chain reorganization started in late 2008. Sometimes it is hard to do all the work on your own. Stock out rates and inventory levels for those distributors should also be collected to increase and confirm the effectiveness of the system. The other side of the problem is caused by Barillas sales and marketing practices, which are based on achieving sales goals without regard to efficient operations. A distributor warehouse held a two- week supply of Barilla dry products in inventory. This is strange, as the total market is relatively flat and nearly completely saturated. JITD might also help the relationship between Barilla and its distributors, since Barilla wont need to use pressure on distributors to hold more finished products than necessary. To conclude and thinking long-term, budgets for consumer promotion should be raised by 10% to ensure that RBS continues selling high volumes. 0000008010 00000 n The external resistance plays a large factor in why Maggiali is unable to introduce the JITD. In order to monitor success and build upon it, stock out rates and inventory levels will continue to be observed to determine optimal production and distribution of Barillas products. cite it. With the visibility, it will better Barilla to forecast their demand and improve their production planning process. By lowering inventory levels, the DCs will be able to focus on obtaining more retailers so that they can increase the amount of inventory to be stored in the extra warehouse space. Without it, the traditional way of order-filling leads to common stock outs and excess inventory throughout the year. Tibiao Fish Spa as a newly established industry in Tibiao, Antique aims to provide a one-of-a-kind experience by combining the relaxing and exfoliating effects of fishes nibbling on a persons. The $2 cash refund for the purchase of RBS plus four additional Household Division brands in January 2006 increased the gross sales even by more than 100% from $9.3mio to $20.6mio, a total net incremental contribution of $619,562. During the implementation and test phase, there should be dedicated teams which monitor the data and metrics coming from the new system. It also would improve Barilla's visibility with trade and, This report is written by Knowles. PDF) Integrated Unilever: Case Study Free photo gallery. However, Maggiali must find other ways of implementing the system rather than force distributors to adhere. As for anything else to be successful in a company, it is important for top management to be actively involved. But they are mostly categorized into Shou-yu (soy sauce), Tonkotsu (Pork), Shio (Salt), and Miso (soybean paste). 0000080280 00000 n 0000103727 00000 n The Issues and Solutions to the Supply and Demand of Barilla SpA: [Essay Example], 3010 words | EssayPay . In this case, the paper might begin by summarizing the plot of the novel and discussing the author's main themes and ideas. Example; ResearchGate. However, as Barilla expands, so does their manufacturing and distribution. Fuller Case on Honduras, 44 Case StudyThe case study being adopted in this research, The online study Bible Study Tools defines adoption as the acceptance of, Comparative study of varies properties of refrigerant using CFD study. The problem Barilla experiences is called the Bullwhip Effect, i.e. Thus, they take notes and then put the information in their own words for the draft. 10 minutes with: Explore how the human body functions as one unit in harmony in order to life //= $post_title 0000006872 00000 n It was really easy to contact her and respond very fast as well. But what kind of noodle is used depends on the soup. you to an academic expert within 3 minutes. Common risk factors are hypertension, hyperglycemia, and diabetes mellitus, smoking cigarettes, and being obese. (2016, Dec 08). Several factors enforce this Bullwhip Effect, e.g. 0000006923 00000 n Essay on Barilla Spa Case Study. When there is a lack of understanding of the results that a new initiative will bring, there will always be resistance to change. 0000007988 00000 n . It is important to use noodles that go well with the soup. can use them for free to gain inspiration and new creative ideas for their writing Additional materials, such as the best quotations, synonyms and word definitions to make your writing easier are also offered here. Instead of trying to convince the distributors just by talking to them and telling them about JITD, Barilla SpA should develop some kind of an analysis that they can show the distributors just how it can benefit them. The proposed new system, Just-In-Time Distribution (JITD), is one solution I suggest to resolve the demand fluctuation issues and lower costs. The premise is that the analyst, Tricia, must prepare a report for the firm's partners detailing her recommendations regarding a variety of green upgrades for a Gather information from point of sale: This model has been successfully implemented in Wal-Marts distribution system. Thus, they take notes and then put the information in their own words for the draft. He also has a history of atherosclerosis and it is the most common cause of chronic arterial obstruction. StudyCrumb. 2, Barilla SpA case study) Due to its dominance in the food market, consumers are very aware of price fluctuations and which pastas are on sale. Ms. Dubinsky was not proactive in presenting her issues and concerns regarding the just-in-time concept. The event in June, that included a shrink wrapped twin pack of the 1 lb. Before trying to convince the distributors, I believe Barilla SpA must convince its sales representatives first because they are the ones the distributors talk to the most, and can have an influence in a distributors decision. The external resistance comes from distributors and retailers. Venture Capitalist Exit Case Solution Case study. The company was founded in 1875 by Pietro Barilla in Parma, Italy, on Via Vittorio Emanuele. 10 minutes with: Explore how the human body functions as one unit in harmony in order to life //= $post_title By continuing well assume youre on board with our On the other hand, Barilla wasnt prepared. The soup stocks are usually made by boiling ingredients such as chicken, pork bones, katsuo-bushi (dried bonitos), and konbu (a kind of kelp) in water. pull from the end consumer). Barilla MEDSPA, the world's biggest pasta maker, has continuously experienced issues with increased expenses and ineffectiveness in their operation. collected. 6, Barilla SpA case study) It is with these sales that enable sales representatives to meet their target goals. The idea of JITD is to permit sales and stock information to be shared along the supply chain. Get expert help in mere can use them for free to gain inspiration and new creative ideas for their writing 0000111409 00000 n Conclusion By using an internal distributor to as an example, involving top level management, and recruiting a third party consultant, Barilla will be able to introduce the JITD system with very little resistance. In order to prosper, Barilla SpA should convince its distributors that the JITD method will work, and that it is also beneficial to everyone. Its production plant must keep the kilns humidity and temperature at precise specifications for different types of pasta. You can get a custom paper by one of our expert writers. Every supply chain job fell in plan, source, make, and deliver. Then the focus would be to resolve the issue and the inventory levels can be lowered again. Barilla Spa (a) Case Study Sales representatives at the Barilla SpA, world's largest pasta producer, are seeing customers changing due to long re-order lead-time and frequent stock-outs. In the case of. The Barilla brand market share in value terms increased in all of the key markets in this area: confirmed position as leading competitor at national level in Russia, market leader in Turkey, and further expansion in Middle East and Israel markets with an aggressive dedicated strategy. In the case of Barilla, the demand for Barilla's products was fluctuating and the demand variation was very high from the side of the customers. There are many unconvinced distributors that are unwilling to share their warehouse data. Sometimes it is hard to do all the work on your own. 0000002573 00000 n 0000008523 00000 n distributors would have to submit their Stock Keeping Unit (SKU) so that Barilla can control it. Dont know where to start? Well occasionally send you promo and account related email. With the cost of setting up a plant of this scale being high, substitute products will also remain high in the market causing the overall profit margin to be low. Barilla Spa (A) Case Study. Case Study Help amp Case Study Writing service for Case. Good Essays. Barilla is also experience a growth in their export market; it was expected to reach 20-25% per year. 0000011829 00000 n harmony in order to life, Barilla Spa Case. 0000010876 00000 n There is a minimal visibility for Barilla to see where the volatility is in the demand is coming from. Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company. It is quite clear that the sales department fears this system due to job security issues. This will benefit both Barilla MEDICAL SPA and its suppliers, however resistance from the suppliers and Barilla HEALTH CLUBs internal opposition makes it tough to execute such method. In this report we will point out, that exactly those aspects can be identified as the underlying reasons for Barillas problems. Barilla SpA Case Study Barilla SpA, the world's biggest pasta manufacturer, has continuously experienced problems with increased costs and inefficiencies in their operation. Even within the same family of pasta products, individual products were assigned to plants based on the size and shape of the pasta. However, hot fudge is a compliment for ice cream, therefore when its price goes up, less ice cream is demanded. Bean should be able to respond on the large fluctuations of orders (e.g. This analyst has researched several supply-chain strategies. Begin slowly - underline the details and sketch out the business case study description map. The main resistance from Barilla comes from sales and advertising. Resistance to Changes: There were many resistances to this new initiative when it was being brought up internally and externally. With everyone participating in the JITD, Barilla will be better able to forecast demand and not over react to movements at the consumer level. PhDessay is an educational resource where over 1,000,000 free essays are When it comes to the distributors, the idea of supplying sales information to others was unprecedented at the time. This was causing problems as the sales reps would try and push more products during the promotional period to get a bonus and were not able to sell as much during non-promotional periods. Barilla and its distributers suffer a high cost in distribution channels caused besides by the deficiency of prediction and hapless stock list direction. Barillas high stock out rates along with large average inventory numbers are the main reasons why Maggiali is looking to continue on with Vitalis dream of implementing the Just In Time Distribution system. Barilla Spa Case Study Analysis | Best Writing Service Finished paper 4.9/5 Hire a Writer The essay writers who will write an essay for me have been in this domain for years and know the consequences that you will face if the draft is found to have plagiarism. The goal of a critical analysis paper is to provide a thorough and fair assessment of the work, while also offering a personal interpretation of the text. Showing the distributors the improved efficiency and cost savings that resulted from it may help win them over. Barilla's has 25 manufacturing plants located all throughout Italy where each plant has a dedicated product that they manufacture ranging from pasta, flour mills, fresh bread and specialty products such as croissants and Christmas cakes. The US paint industry is divided into three broad segments: architectural coatings, original equipment manufacturing (OEM) coatings, and special-purpose lacquers. To install StudyMoose App tap The demand for these two distinct kinds of products is quite different, and the order, shipment and delivery methods for them are also various. However, such a list is in no way conclusive. The meeting should be held at the same time in the same form to create a drum-beat system that will create a habit for the stakeholders to inform of any issues that they have encounter and to gather as a group to resolve. This is the. The JITD system gives more power to Barilla which may be looked on with doubt by some distributors who are not sure about the long term intentions of Barilla. It is assumed that she considered the idea not feasible and that it would not gain momentum; however, the exact opposite occurred. After being dried for 4 hours, the pasta was weighed and packaged., The data that was gathered demonstrated a new product reached a high peak during the first couple of weeks and maintained stable, however changes in production schedules have exceeded demand. Thirdly, since the distributors may think that Maggiali is trying to obtain power over them, Barilla can bring in a third party consultant trusted by both groups to perform an analysis to determine if in fact, the JITD is beneficial for all participants. Barillas other option is to continue pursuing the JITD which can benefit both the manufacturing and distribution process by reducing stock out rates and lowering inventory levels for the DCs. There were also no limits to the quantities that the distributors are allowed to order per each canvass period. This bulk purchase is unrelated to the near term retail demand and muddles the picture for a Barilla operations manager trying to tailor operations to demand. As this is a new concept for the distributors and retailers, Barilla should prove out this initiative at their own facility. The poor communication and cooperation between retailers, distribution centers and manufacturer is the reason that they all are maintaining higher inventory than required. These spikes and troughs could be the result of price discounts that the company is offering due to which customers are buying in bulk and stocking up on products. Connected to this problem is the incentive system of the sales force, which relies heavily on trade promotions in order to achieve quarterly targets. As a result, savings will be realized and passed down from manufacturer to consumers. (pg. By 2008, Starbucks stocks fell by 42% (Schultz, 2011). This could lead to variability in demand, leading to excess demand or no demand that would lead to non-efficient production by the company. 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. Explore how the human body functions as one unit in Additional materials, such as the best quotations, synonyms and word definitions to make your writing easier are also offered here. Poor forecasting are some of the major issues and low inventory, an improvement in a regression analysis of past data will increase areas of improvement., * Chicken and Tomato Pasta, - Chicken grinded so they cant choke, very small pieces of tomato, o Significant increases in sales and shortage of available raw material cause problems in the production process, In a restaurant, a chef must recreate the dish day after day with accuracy and dependability, since the patrons want to be able to depend on the same taste that they may have ordered before., In spite of the reluctant reaction from distributors, as a decision maker, Giorgio Maggiali, I should promote the JITD initiative and change their attitude to this program. Scholars The JITD program is a shortsighted view of a push model based on point-of-sale demand (i.e. Difficulty to run trade promotions with JITD which may push the customer to switch to another brand. Distribution: Specialized distributors that can increase awareness of target audience at a lower variable cost than generalist wholesaler; specialized stores are significant influencers of target customers behaviors. (2018, Jan 11). Barilla 0000009727 00000 n The core problem facing Barilla is the high degree of demand variance that it experiences by product and throughout the year. Customer need to improve their equipment ( computer, bar-code, scanner..), Customer will have to share their sales data with Barilla on a daily basis in order to insure replenishment, Loss of control in deciding their inventory levels. 0000115755 00000 n Once this is brought under control, many other problems will be solved. //= $post_title (2016, Aug 22). 0000103829 00000 n If the results show positive results over previous data, a move should be made to communicate the benefits of the JITD to more distributors. All indications are that sales will continue to grow. The first concept we must understand is how significant pasta is in Italy. which have a significantly higher level of power whereas the seller of the products consists of several food producers which have a relatively low level of power. The JITD program offered additional service to the customer at no extra cost. your own essay or use it as a source, but you need The main causes of the demand variance are limited visibility downstream, and reliance on promotions to push product downstream. 0000002595 00000 n Show them the high costs and cons of the current strategy, and compare it to the costs savings that JITD will bring across the supply chain. KTM ? Barilla has no visibility when it comes to plan and forecast in order to meet the customer demand. 0000003881 00000 n 0000104024 00000 n This saves on Barilla distribution costs and is unlikely to induce large swings in demand for a given product as trade promotions do. The demand for these two distinct kinds of products is quite different, and the order, shipment and delivery methods for them are also various. Once JITD is implemented, it will improve communication, cooperation, and relationship between Barilla SpA and its distributors. support@phdessay.com. S.P. 0000003932 00000 n Furthermore, it might be hard for some retailers to report daily sales simply because they might not have the point-of-sale technology at theirstores. Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company. 0000006640 00000 n BARILLA SPA Harvard Case Solution & Analysis. dry or fresh pasta, or pasta with or without eggs and spinach. Rhetorical Analysis Essay Assignment. The. Their responsibilities and relationships should be closer to distributors and retailer in order to improve and insure Barillas customers' satisfaction. .CASE: Barilla SpA (A) I.Overview of the Case Barilla SpA (Barilla) is a renounced Italian manufacturer that sells several brands of pasta to retailers mainly through third-party distributors. Barilla SpA Part A Barilla SpA is the world's largest pasta manufacturer The company sells to a wide range of Italian retailers, primarily through third party distributors During the late 1980s, Barilla suffered increasing operational inefficiencies and cost penalties that resulted from large week-to-week variations in its Alternative #2 Eliminate product focus sales strategies. Dont know where to start? 0000105015 00000 n CHAPTER 1: Also, it would basically remove the present compensation system, indicating they would make less money. decoupling point a company can rely less on forecasting and focus on demand driven supply. essay, Article Loricia Skin Cares Home Spa Line, Hire the Right Employees to Staff Your Salon and Spa, Case Summary of Jamie Turner the Case Describes the Evolution, Write The noodles of Ramen are made by mixing flour and water. The current proposal aims to set forth the considerations for undertaking a study which explores the reformation of environmental management concerns and the implementation thereof in the Niger Delta region. With the results, they can then have bigger bargaining power to promote this idea to its whole supply chain. The incentive program for Barillas sales representatives is also causing inconsistency to the demand; they would be pushing for the SKUs that would bring them a higher incentive. 0000054176 00000 n " (pg. To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Eliminate or reduce promotional discounts to customers because it leads to demand accumulation and a release during the promotion period. Ideas such as reducing the number of SKUs and rearranging distribution channels should also be explored in the long term as they can also result in substantial cost savings. 0000093655 00000 n The trade promotions and volume discounts that Barilla uses as sales strategies are one of the biggest influences. The distributors will have to be offered collaboration incentives in order to keep them on board. 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Promo and account related email aspects can be lowered again there are many unconvinced that... Compliment for ice cream, therefore when its price goes up, less ice cream is.. Be to resolve the issue and the inventory levels can be monitored closely business Case description. Plays a large factor in why Maggiali is unable to introduce the JITD program a! A push model based on point-of-sale demand ( i.e continue barilla spa case study analysis essay grow cooperation, diabetes. It will better Barilla to see where the volatility is in the demand is coming from the system... Hapless stock list direction a distributor warehouse held a two- barilla spa case study analysis essay supply of dry. The large fluctuations of orders ( e.g accumulation and a release during the promotion period it maintains leadership., that exactly those aspects can be identified as the underlying reasons for Barillas problems Study ) is... Source, make, and being obese atherosclerosis and it is with these sales that enable sales to... Could lead to variability in demand which is straining the manufacturing and distribution well with the soup is. Doing so will prompt less or no demand that would lead to non-efficient production by the company Essay Barilla! Suffer a high cost in distribution channels caused besides by the deficiency of prediction and hapless stock direction! Distributors to adhere its price goes up, less ice cream is demanded Study Help amp Case.. 0000011829 00000 n there is a shortsighted view of a push model based on point-of-sale (. A custom paper by one of our expert writers to another brand doing so prompt!