Giorgio Maggiali is the director of Logistics for Barilla and was appointed to this position when his predecessor Brando Vitati was promoted. Vitati had proposed a Just in Time Delivery (JITD) model for Barilla. Vitati has commented on the “thinning margins” the industry was experiencing and the need to “take costs out of our distribution channel without compromising service”. He felt operations could be improved if Barilla was responsible for determining the quantities and delivery schedules to their customers. Giorgio is frustrated with the opposition and resulting lack of progress in implementing this new process.
My decision upon reviewing the information provided in the case is to recommend that Barilla
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Barilla has three production divisions and two distribution channels based on the shelf life of the product. Distribution is also further divided between two central distribution centers. Corporate headquarters are located next to the plant in Pedrignano. Barilla’s pasta plants are specified to the type of pasta to be made. The main distinction is what the pasta is made of, as different types of pasta use a different combination of flours and other ingredients. There is also a further distinction made within these families of products based on the size and shape of the pasta. Temperature and humidity have to be very tightly controlled and there is a specific production sequence that must be followed. Barilla has three main customer types, larger supermarkets chains, large independent supermarkets and small retail shops. How the product is distributed is influenced by customer type and expiration date of the product being shipped. Fresh product is distributed through brokers directly but all other products flow through the Central Distribution Centers (CDC).
Barilla is increasingly feeling the effects of fluctuating demand as orders for Barilla dry products often swing wildly from week to week. This demand variability is straining Barilla’s manufacturing and logistics. Plants are so tightly specified to the types of pasta they can produce, that it