Barilla Spa, a leading pasta manufacturer based in Italy, was facing supply chain issues in the late 1980s and early 1990s. The company's distribution system was inefficient, resulting in high inventory levels and frequent stock-outs at stores. This led to customer dissatisfaction and lost sales.
To address these issues, Barilla implemented a Just-In-Time (JIT) inventory system, which aimed to improve the efficiency of its distribution network by delivering products to stores only as needed, rather than maintaining large inventories at each stage of the supply chain. The JIT system relied on accurate forecasting and communication between Barilla and its retailers.
To improve forecasting, Barilla implemented a Point-of-Sale (POS) data collection system, which provided real-time data on customer demand at the retail level. This allowed the company to better predict demand and adjust production and distribution accordingly.
Barilla also implemented a Collaborative Planning, Forecasting, and Replenishment (CPFR) system, which allowed the company to work closely with its retailers to jointly forecast and plan for demand. This improved communication and coordination between Barilla and its retailers, and helped to reduce stock-outs and excess inventory.
In addition to implementing these technological solutions, Barilla made changes to its organizational structure to support the JIT system. The company decentralized its decision-making, empowering local teams to make decisions based on local market conditions. This helped to improve responsiveness and agility in the supply chain.
Overall, the changes implemented by Barilla were successful in improving the efficiency of its supply chain. The JIT inventory system helped to reduce inventory levels and stock-outs, leading to increased customer satisfaction and sales. The POS data collection system and CPFR system improved forecasting accuracy and communication with retailers, further supporting the success of the JIT system. The decentralized decision-making structure also contributed to the success of the JIT system by improving responsiveness and agility in the supply chain.