barilla案例分析.docx

barilla案例分析.docx

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barilla案例分析

Barilla案例分析

StrategicSupplyChainManagement:

BarillasPA

Drainville,Julie,PierisSherline,YuZhewen,RenYuan,OkafoEKE,Ifeoma

ESC4710_010

March27,2017

TableofContents

CaseStudy2:

 BarillaSpA

CompanyBackground

CompanyOrigins

BarillaisanorganizationownedbyPietroBarilla,whichstartedoutin1875asaretailer.Thestore’smainproductsincludedpastaandbreadthatwereproducedinalabnextdoor（Hammond,1994,.Barillagrewturningintoalargepastamanufacturer,experiencingsignificantgrowthbeforeitwaspassedtohissonsPietroandGianniinthe40’s（Hammond,1994,. AsBarilla’sownershipwaspasseddownthroughthegenerations,thecompanygrewandbecameaverticallyintegratedcorporation（Hammond,1994,.Thegrowthresultedtheorganizationbeingcompromisedofflourmills,pastaplantsandbakery-productfactoriesgeographicallydispersedthroughoutItaly（Hammond,1994,.

Barillawasabletogrowitsmarketshareofthepastaindustrythroughtheirmanufactureofhighqualityproducts,innovativemarketingtechniquesandpracticesandbycreatingastrongbrandwithinItaly.Thesestrategiesresultedindoubledigitgrowth.Barillamadeboldstridesandbegantoconstructtheworld’smostsophisticatedandtechnologicallyadvancedpastaplant（Hammond,1994,.ThehighinvestmentinbuildingthisfacilityplacedhugepressureonBarilla’sfinances.In1971,BarillaendedupbeingsoldtoamultinationalfirmnamedGrace（Hammond,1994,.

Inadditiontochangesintheorganization'sbusinesspractices,GraceintroducedanewlineofbakeryproductscalledWhiteMill.ThehighlyregulatedItalianeconomyandBarillaoperatingenvironmentcoupledwithdifficulteconomicconditionsofthe70’smadeitdifficulttooperateBarillaremainprofitably（Hammond,1994,.Thisledtothere-saleofBarillatoitsoriginalownerPietroBarillain1979（Hammond,1994,.

WithnewinfusionofcapitalcoupledwiththeorganizationalchangesinstitutedbyGrace,PietrowasabletoreturnBarillatoitsformergloryasdepictedinFigure1.Agrowthrateof21%wasmadepossibleinthe80’sthroughtheinternationalexpansionoftheBarillabrand,andtheacquisitionofnewbusinesses（Hammond,1994,.Barillamaintainedaresearchanddevelopmentfacilityandpilotproductionplantfordevelopingandtestingnewproductsandproductionprocessesfortheirorganization. 

Figure1:

TrendofBarillaSalesandItalianPriceIndex

PastaMarketShare

ThefollowingdatawasextractedfromtheBarillacasestudy.

Figure2:

1990ItalianPastaMarketbyMarketShare

Figure3:

1990EuropeanPastaMarketbyMarketShare

Figure4:

1990ItalianBakeryMarketbyMarketShare

PastaManufacture

Themajorprocessesinvolvedinpastamanufacturinginclude:

mixing,rolling,cutting,heatinginakiln,dryingandpackaging.Barillaemployedatightlycontrolledproductionsequencetominimizechangeovercostsinspiteofproducingawidevarietyofpastacreatingaveryinflexiblemanufacturingenvironment（Hammond,1994,.Someplantsproduceddifferentvarieties;otherswerededicatedplantsincludinglongandshortpastaplants.

ChannelsofDistribution

AprofileofBarilla’sproducts,aswellassomekeyfeaturesisshownbelowinFigure6.

UnderlyingDriversandCauseofFluctuationDemand

Barillaiscurrentlyexperiencingahighrateoffluctuationinthedemandgeneratedfromtheircustomer,asdisplayedinFigure7below.Therearemultipleunderlyingfactorsthatcontributetothissporadicdemandpattern.Thisfluctuationcreatesadifficultenvironmentforasupplychaintobeeffectiveresultinginnegativeeffectsforboththeorganizationandthecustomer.

InexaminingFigure7weareabletovisualizetheextremefluctuationincustomerdemandBarillaexperiences.ThechartdisplaysthatBarilladryproductsmeanis300quintalsandastandarddeviationof227quintals.Thestandarddeviationvalueisclosetothemean,whichshowinghighvariations.Thisdemonstratesthatthedistributionpatternhasextremefluctuation.Themaximumordernumberisapproximately900quintalsandtheminimumordernumberofapproximately50quintals;suchalargegapshowstheunpredictabilityBarillacurrentlyfaces.Thisisaresultofcustomersplacingordersinreactiontodemand.Thistypeofpatternisusuallyaresultofordersbeingplacedduetopanicoroverorderinginanticipationforcustomerdemand.ThedemandpatterndisplayedinFigure7createshighercostfortheentiresupplychain.

LackofDownstreamVisibility

Barillaanditscustomerscurrentlydonothaveinfrastructurethatallowsthemtoenableinformationsharingofcustomerdemandthroughoutthesupplychain.Thisresultsinsupplychainstagesbeingblindofactualcustomerdemand.Thisresultsinadistorteddemandpatternasitflowsdownstreamthroughthesupplychain.ThisisreflectedintheorderpatternsBarilla'sreceive.Thiscreatesadifficultenvironmentforsupplychaintocoordinateefforts.

TheBullwhipEffect

Theorderpatterns,showninFigure7areadirectresultofthebullwhipeffect.Thebullwhipeffectidentifiedinthedemandpatternsofthesupplychain.Orderssentthroughoutthesupplychainbecomelargerinvarianceincomparisontotheactualdemandoftheendcustomers.Thiseffectisgeneratedbyalackofsupplychaincoordinationandinformationsharingthroughoutthesupplychain（Chopra&Meindl,2016）.Figure8isapictorialrepresentationofhowthebullwhipeffectlooksthroughthesupplychain.Whenlookingatthewholesaler’sordertomanufacturerwecanseesimilaritiesinBarillademandpatterns.Figure8displaysaproductwithsteadydemandhoweverasittravelsthroughoutthesupplychainhighdemandfluctuationoccurs.

Figure8:

DemandFluctuationatDifferentStagesintheSupplyChain

ItisapparentthatBarillaiscurrentlyexperiencingthebullwhipeffectduetotheircurrentrelationshipwiththeircustomers.Eachphaseinthesupplychainiscurrentlyoperatinginsilos.Thisisaresultofeachstagefocusingondifferentobjectiveswithouttheconsiderationoftheoveralleffectithasonitssupplier. 

SupplyChainObjectives

TheimagebelowinFigure9isagraphicalrepresentationofBarilla’sdistributionchannel.Thisdisplaysthevariousstageswithinthesupplychain.Dryproductsmustgothroughmultiplechannelsbeforereachingtheendcustomer.

Figure9:

BarillaDistributionChannel

Theoverarchingproblemlieswithefficientsupplychaincoordination.Thisincludesalackofforecastingsystemandcommunicationtoensurethatdemandneedsaremet.Itisapparentthatthereislackofcoordinationofobjectivesanddemandbetweencentraldistributioncenter（CDC）andthegranddistributor（GD）.Forinstance,thedistributorpurchasesdryproductsinhighervolumeswhenapromotionordiscountingiventodecreasetheirinventorypurchasingcost.Theydon’tconsiderthepotentialconsequencesthismaygenerateinthelongtermforthesupplychain.Thisdecentralizeddecision-makingresultsinhighandunpredictablefluctuationsindemand.

PastaDemandPatterns

Demandpatternsforpastahavebeenrelativelystablethroughouthistory.In1980’sitwasshownthat“Italianpastamarketasawholewasrelativelyflat,growinglessthan1%peryear.Itisestimatedthattheaveragein1990“percapitapastaconsumptioninItalyaveragednearly18kilosperyear”（Hammond,1994,.PastaisastapleconsumedinlargequantitieswhencomparedtootherEuropeancountries.PastaalsoexhibitslimitedseasonalityindemandwithspecialtypesofPastapopularintheEasterandsummer（Hammond,1994,Overtheyears,pastasaleshavekeptpacewithinflation;howeverinthe90’swhenthemarketremainedflat,saleswereboostedbyexports.ThisshowsthatthedemandpatternsforBarillaarenotaccuratetotheactualconsumptionofpastainItaly.

ThegraphinFigure1asseenonpage3isrepresentativeofBarillasales,whichhaskepttrackwiththeItalianwholesalepriceindex.WecanusethisindexasameasuretheinflationintheItalianeconomy.Theprofileofthegraphsuggeststhatsaleshavekeptpacewithinflation.Accordingtothisdatainferencescanbemadethatdemandhasremainedstable.

ImpactofFluctuationDemand

Thehighfluctuationincustomerdemandisknownasthebullwhipeffect.ThisisaconsequenceofineffectivecoordinationandinformationsharinginBarillasupplychain.Thislackofcoordinationhasresultedtotheimplementationofreactionaryinventory,salesandmarketing

decisions.Thiscreatesadetrimentalimpactontheperformanceofthesupplychain’sabilitytomeetchangingdemandsandcustomerneeds.

Thefluctuationdemandhasahighimpactoftheorganizationabilitytomeetfluctuatingfulfillratessubsequentlyleadingtostockouts.InanattempttominimizetheseoccurrencesBarillatriestomaintainhighinventorylevelsoffinishedgoods.Itisdifficultfortheorganizationtoresponsetofluctuationdemandpatterns,astheremanufacturingprocesshaslimitedflexibility.Theproductionsequenceimplementedtokeepchangeovercostlowandproductqualityhighhasdecreasedtheirabilitytodealwithunexpectedperiodsofhighdemandfluctuation.

Themanufacturingprocessinabilitytoresponsewelltohighdemandfluctuationsresultsinahighercostfortheorganization.Inperiodsofunexpectedlyhighdemand,thedesiredqualityoftheproductmaybejeopardizedduetostressofthemanufacturingprocesstoproduceordersfaster.Whenstocksoutoccurahigherreplenishmentlead-timeisexpectedduetotheirincapabilitytoincreasecapacity.Theimpactisfeltbyanincreaseinoverallcostandanegativeeffecton