Barilla SPA Case study

1. Barilla SpA
Barilla, Voiello and Braibanti Pasta
Mathan Anto Marshine P
IIM Indore
Mobile: +91 7506201026 Email: pm13pmathan@iimidr.ac.in

2. Roll No: 2013PGPM036 Barilla SpA | 2
Barilla, Voiello and Braibanti Pasta
CONTENTS
1) Define objectives of Barilla/distributors/salespeople 3
Objectives of Barilla 3
Objectives of Distributors 3
Objectives of Sales people 3
2) Propose a solution that will address objectives and be acceptable to
all parties. 4
Distributors 4
Sales people 5
Barilla 5

3. Roll No: 2013PGPM036 Barilla SpA | 3
Barilla, Voiello and Braibanti Pasta
1) Define objectives of Barilla/distributors/salespeople
Objectives of Barilla
 Reduce the overall inventory at CDC.
 Reduce the lead time for delivery.
 Reduction in erratic demand.
 Increase in sales of the pasta.
Objectives of Distributors
 They need control on managing their inventory.
 Don't want to closely linked to Barilla as that would allow barilla to
push their products.
 Distributors don't wish to incur the additional overhead cost involved in
reporting inventory figures to barilla.
Objectives of Sales people
 Increase the sales during promotion as their incentive is based on that.
 Ensure distributor always holds stock of barilla products, so that
competitors could not enter in.
 Predicting rise in stock outs due to strike and other interruption in
production.
 Accurate prediction of demand during high fluctuations.

4. Roll No: 2013PGPM036 Barilla SpA | 4
Barilla, Voiello and Braibanti Pasta
Sales people had following concerns with JITD
 They will lose power because functioning of sales and marketing will be
narrowed due to automated control over inventories.
 Flat sales structure will take away the bonus of the sales people.
 Sales representative feared reduction in responsibilities like reduce in
the need for sales promotions.
2) Propose a solution that will address objectives and be
acceptable to all parties.
Distributors
 Credibility needs to be gained before enforcing any idea to distributors.
First implement JITD as a experiment (i.e. Pilot Project) with distributors
like Marconi who agreed to sell their data. Collect the results like Average
Inventory levels, Days Inventory turnover, Daily shipment to DC, Stock
out ratio and " Daily sell through" to retail stores for month. Successful
results will add credibility to JITD proposal.
 Distributors need to be convinced with the win-win concept.
a) To gain trust and convince distributors that their independence is not
in jeopardy, Barilla could propose a joint venture with Barilla and the
distributors as shareholders that control the sales data from the
distributors. By becoming joint owner of this data both parties can
benefit without the distributors losing some of their independence.

5. Roll No: 2013PGPM036 Barilla SpA | 5
Barilla, Voiello and Braibanti Pasta
b) Barilla could ask an SCM consultant trusted by both Barilla and the
customer to give their opinion.
c) If the DOs or GDs do not want to share data, offer a closely working
Barilla representative to be present at DO or GD premises who
monitors the inventory and sales figures and advises on the ordering
(similar practice is currently performed in supermarkets)
Sales people
 The sales team needs to be persuaded of the value of this selling tool -
JITD. The reward structure for salespeople could be reorganized, for
example some of their KPI’s could be related to reduction in inventory,
getting accurate data from stores about sales. The jobs of the
salespeople could be redesigned to introduce more job commitment from
sales; ideas to design satisfaction into the job could include job
enlargement (larger number of tasks and more variety), job enrichment
(greater autonomy), job rotation, empowerment and team-working.
Barilla
 Company-wide view should be adopted that the relationship with
distributors is a long-term one, a partnership should be managed
accordingly i.e. joint learning, sharing successes, sharing and aligning
long term expectations, and having multiple points of contact through
formal and informal channels.

6. Roll No: 2013PGPM036 Barilla SpA | 6
Barilla, Voiello and Braibanti Pasta
 For really skeptical distributors on information sharing, develop and roll
out a “Barilla Demand Forecasting System” where DOs and GDs can order
based on the outcomes of the forecasts. However this will still not fulfill
all the required information for Barilla to flatten the demand, both Barilla
and the distributor will benefit from better forecasted orders and
decreased inventory.
 Build trust by looking for strategically aligned relationships with individual
DOs and GDs. Explore and propose how Barilla can help its distributors to
meet their strategic objectives developed models.