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Barilla SpA: An Analysis of Just-in-Time Distribution
Individual Assignment
Author: Janice Hammond,HBS Case No 9-594-018
Barilla SPA, the largest pasta manufacturer in the world, rooted in Italy, sells to its
retailers largely through third-party distributors and experiences widely fluctuating
demand patterns from its distributors during the late 1980s. This case describes a
proposal to address the problem by implementing a continuous replenishment program,
under which the responsibility for determining shipment quantities would shift from the
distributors to Barilla.The case describes support and difrerent functional areas and
within the distributors.It allows the analysis of how a company can effectively implement
a continuous replenishment program to both reduce channel costs and improve service.
Topics
Efficient replenishment, vendor managed inventory, channel coordination, bullwhip
effect, supply chain incentives, joint optimization.
Excel Exercise
Barilla SpA is the world’s largest pasta manufacturer. The company sells to a wide range
of Italian retailers, primarily through third-party distributors, and enjoys a strong brand
image in Italy. During the late 1980s,Barilla suffered incresing operational inefficiencies
that resulted from large variations in its distributors’ order patterns.To address this
problem,Barilla’s director of logistics proposed the implementation of a continuous
replenishment program,which Barilla called Just-in-Time Distribution(JITD), with
Barillas distributors. Under the proposed system,decision-making authority for
determining shipments distributor would transfer from the distributor to Barilla.
Barilla produces pasta at factories through Italy,ships to their own central distributi
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