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Barilla SpA Case

Barilla SpA Case. OPIM 5110. Why should this work? What are the underlying economics? Who will Benefit?. Coordination Concept: Sequential, Myopic optimization. Evaluation of JITD Proposal. Supplier. Customer. Joint Optimization. Supplier. Customer.

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Barilla SpA Case

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  1. Barilla SpA Case OPIM 5110

  2. Why should this work? What are the underlying economics? Who will Benefit? Coordination Concept: Sequential, Myopic optimization Evaluation of JITD Proposal Supplier Customer Joint Optimization Supplier Customer

  3. Amplification of Orders Placed on Suppliers Consumer Barilla DC Retailer Barilla Plant Distributor

  4. Causes of Fluctuation Poor Communication Promotions Volume Discounts Lead Times Number of SKUs Sales Compensation Stockouts No volume Constraints Cost of Fluctuation Production Inefficient Finished Goods Inventory Distribution Inefficiency Workers Equipment Trucks Complexity Distributor Inventory Causes and Cost of Demand Fluctuation

  5. JITD Implementation problems Action Perspective Causes External Internal

  6. Perspective Distributor’s Barilla’s • Who should have decision rights? • Type of Information to be transferred • Size • Capability • Geography

  7. Causes of Problems • Transportation discounts • Volume discounts • Promotional activities • No minimum or maximum order quantities • Product proliferation • Long lead time • Poor customer service rates • Sales compensation system

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