“Barilla SpA”
Executive Summary
Like many Italian businesses, Barilla began as a family endeavor. The company has been
in operation since 1875. Barilla has gone through many changes throughout these years and has
come to be “the world’s largest pasta producer.” In this current age, the company is finding that
it is having problems with the logistical process. It is becoming apparent that the current
forecasting tools, or lack thereof, are causing major strain on Barilla’s supply chain. The main
problem seems to lie in the demand variations. This is leading to rising inefficiencies and costs.
Much of the variation is coming from Barilla’s distributors. Currently the distributors are
controlling demand. They are providing the weekly numbers to Barilla, and the company is
fulfilling these orders as provided.
A process is to be implemented to combat these demand variations. The variations are
creating a bullwhip effect that Barilla is having a hard time with keeping up. With 800 SKUs for
dry product alone, it is not easy for Barilla to fulfill any emergency orders if the distributors
should stock out. There is no clear communication between Barilla, the distributors, or the
stores. It seems like much of the forecasting that is being performed is based on guesstimating.
Brando Vitali, the former director of logistics, created Just-in-Time Distribution (JITD), but the
current director, Giorgio Maggiali is having problems getting the process implemented. There is
significant resistance from inside Barilla and from the company’s customers.
Analysis of the Situation
One of Barilla’s strengths that they have held onto for many years is their strong brand
image. The company has succeeded in marketing their product as high quality and sophisticated.
They have achieved this in part through heavily investing in advertising, promotions, and
recognizable packaging. To create this line of products, Barilla has a state-of-the-art
manufacturing facility that is the largest in the world. A weakness of the company is the lack of
information flow. There is a lack of communication on many levels. The process for making the
pasta is not a quick one. There are restrictions with “the specific sequence of pasta production
necessitated by the tight heat and humidity specifications in the tunnel kiln…” While this is
necessary for the high quality product, turnaround for the product is very slow.
Opportunities for Barilla seem to be outside of Italy. There is a growing export market
for the pasta. The expected growth rate for pasta exports to other European countries is between
20 to 25 percent per year. Through creating a new system, there is opportunity to create stronger
relationships throughout the supply chain. One threat to Barilla is the pasta market in Italy is
flat. The market is very saturated. This can stall sales growth since customers have so many
