BRILLA SPA

INTRODUCTIN ABOUT COMPANY

Barilla spa, an Italian company founded in 1875 by pietro

Barilla is the largest pasta manufacture Supply 35% pasta to Italy and 22% to Europe. Vertically integrated corporation with four mills. Pasta plant and bakery products. divided into seven divisions 3 pasta division bakery division Catering division International division

Channels of Distribution
Barilla Divided its products into two

categories , like Dry Fresh

1. fluctuations in demand
Reason: promotion

price discount volume discount

They follow traditional inventory review system. Entering of new different products.

2. Week forecasting system

Causes Use simple order review system Communications gap between distributers and sales representatives Miscalculations of ROP and safety stock. Prefer to order in a batch. Due to this company face stock outs and back orders. uncontrollable Supply system Order are typically based on weekly basis and inconsistently there is no proper way of

3. Operational inefficiencies'
Causes High inventory cost They keep 1 month inventory in CDCS and DO carries two week inventory that account 12% of the product cost
Wastage of inventory

because of poor forecasting, wastage increase because good are of perishable nature.

4. Problems in SUPPLY CHAIN CULTURE

causes

discount rate is very high ( 1.4% to 10%) promotion based sales strategy 10 or twelve promotional period. sale representatives use push strategy to sold more product ignoring market demand. lack of direct inputs and deficiency of the system. lack of trust between barilla and its customer( distributors) success measuring method was wrong. ( success measured on the basis of shelf space not low inventory)

EFFECT
autonomy of supermarkets and distributors. poor communications.( dealer and supplier are different entity) No information sharing Distributors do what they want without concerning suppliers

Jitd
JITD ( JUST IN TIME DISTRIBUTION SYSTEM)

Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand.

HOW JITD HELP TO OVERCOME THE PROBLEMS

Build inventory at the central warehouse and deliver only the quantities required by end user Reduces entire supply chain inventory cost and that, result in high service level. Eliminate of promotions to reduce demand variability by batch ordering. Demand forecast information made available. Vendor managed inventory at the store or at the distribution level.

CONTINUE.
Sales representatives act as communicating

bridge.

LEAD TIME REDUECED

JITD SYESTEM

Earlier there was 10 day lead time because information flow was slow. There was inter firm barrier by in method they directly observe the order from distributers that make their task easy and remove all the obstacles.
As when information passes from various routes,

original form are changed.

Solutions
Use detecting method Supply material not more not less Reduce number of SKUs Supply according to the demand this allow both to CDCs and DOs to reduce their inventory level. improved forecasting technique to reduce stock out

PROBLEMS THAT WE FOUND

New manufacturer plant established in the rural area. They give preference to sale rather than services. Distribution cost was very high. Large number of skus They use tunnel kiln for making pastas.

SOLUTION
Using cost effective promotional technique. Divide market into segmentations. Like supply

dry food to small retailers. Use different statistical tools to measure the demand. Barilla spa can also go for niche marketing. Fresh products that have only 21 days life should be directly sold to the retailers. Sales representative instead of spending their 90% time in store. They should spent only 50% time in stores and they should visit different super markets, retailers to check the preferences of customer towards their product.