Barilla Case Ian Gregory 29 January 2017 In accordance with the business school’s Code of Ethical Behavior, I attest that I have not engaged in any acts of plagiarism in completing the assignments. – Ian Gregory Case Issues Barilla was one of the most successful brands of Italian pasta during the time period enumerated in the case. Despite their success, there were a variety of issues that plagued the company. Such issues included fluctuating demand that created a bullwhip effect throughout the supply chain, putting excessive pressure on the corporation. Some of the problems with variable demand may have been related to issues with the sales and promotional methods that the company was undertaking. Trade promotion …show more content…
Failure to do so was inhibiting the implementation of the JITD system and thus allowing problems faced by the company to fester. Supply Chain Issues The foremost of the issues being faced by the company seemed to be related to their supply chain. Forecasting demand, as earlier mentioned, was difficult due to variably. As it stood at the onset of the case neither Barilla nor their distributors had the technology or sophistication in their supply chains to accurately measure the fluctuating demand. Additionally, there were no order limits for distributers, which in conjuncture with the poor forecasting abilities of the company, created strain on the manufacturing process. The use of trade promotion further served to create unsteady demand. To add to these problems most of the distributors seemed to batch their orders; choosing to order on a weekly basis rather than in real time. This method for ordering was at odds with the supermarkets from which the distributors ordered. It is stated in the case that the supermarkets placed daily orders to the distributers biased on items sold during business hours. All of these factors decreased the logistical effectiveness of the company. Neither Barilla nor their distributors desired to take on excess inventory to buffer for the demand fluctuation. Doing so would have been expensive and in some cases
mismatch supply chain strategy that used by Barilla. Barilla should consider moving left or down which
A third factor contributing to the Bullwhip Effect is the specific production process of pasta. Barilla cannot re-act to demand changes quickly enough, due to production restrictions as e.g. heat and humidity specifications. That means, if a product is out of stock it cannot be produced and delivered immediately.
The core problem facing Barilla is the high degree of demand variance that it experiences by product and throughout the year. The main causes of the demand variance are limited visibility downstream, and reliance on promotions to push product downstream.
In the effort of keeping with the extremely unpredictable demand the production cost may rise dramatically as a result of diseconomies of scale. In addition the set up cost for producing different products in the production line is heavy and Barilla has an enormous product line of different products. The production plant in Pedrignano is big and technologically advanced but at the same time the pasta production is a complicated process and especially the drying of different types of pasta required precision in temperature and humidity levels that could not be changed
1. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program?
Katherine, I too, find that communication is extremely important in order to establish ethical codes of conduct. As I discussed in my post, Bethel University encourages ethical communication among employees within the workplace. Bethel University’s “ethical climate” rarely changes and seems to maintain accountability among employees I have not found anywhere else. As we have learned over the last 7 weeks, we possess the power to create and convey ethical codes of behavior within any organization we decided to participate. However, we must be mindful of the difference in values we each hold as a person and adapt those values to organizational views and missions. Ethical codes of conduct remind us all to be tolerant and think decisively
ABC Learning Ltd was an Australian provider of early child hood education services, founded in Queensland in 1988, that through its 18 centres was the largest single operator of early childhood education services in Australia by 1997. Led by founder Eddy Groves, ABC Learning Ltd continued to grow, through the opening of new centres and the acquisitions of rivals i.e. peppercorn Childcare in 2004 in which 450 centres were purchased for $340 million. “By 2008, ABC Learning was the largest provider of childcare, holding around 20 per cent of the long day care market and providing care to over 100 000 children” (Senate education, employment workplace relations committee, 2009).
The code of ethics and conduct is a written set of rules and regulations that provides guidance to employees of an organization on how to conduct themselves and carry out their duties in line with the organization’s principles. The code of ethics and conduct is also be backed up by suitable disciplinary actions. A code of ethics and conducts helps employees deal with ethical issues and other gray areas that they face as they execute their daily activities. An effective code of ethics and conduct is required for an organization to run smoothly and maintain a positive image. Having an ineffective code of ethics and conduct is almost like having none.
The variability in demand is as a result of lack of forecasting systems or sophisticated analytical tools at the distributors end. Orders for Barilla’s dry products swing from week to week and such extreme demand strains Barilla’s manufacturing and logistics operations. For example, the specific sequence of pasta production necessitated by the tight heat and humidity specifications in the tunnel kiln made it difficult to quickly produce a particular pasta that had been sold out due to unexpectedly high demand. In addition, holding sufficient finished goods inventories to meet distributors order requirements was extremely expensive when weekly demand fluctuated so much and was so difficult to forecast.
"Our results indicate that the informal methods ("manager sets an example" or "social norms of the organization") are likely to yield greater commitment with respect to both employee attitudes than formal methods ("training courses on the subject of ethics") (Adam, et al, 2004).
Barilla’s products are divided into Fresh products and Dry products. The demand for these two distinct kinds of products is quite different, and the order, shipment and delivery methods for them are also various.
The confidence interval for proportion of business students of bayview University who cheat is some form is 0.43 to 0.63.
Because of the way Barilla’s manufacturing process works, demand fluctuations have a significant impact on the company’s operations. Tight heat and humidity specifications in factory tunnel kilns require very specific sequences of pasta production, which means Barilla has limited flexibility in ramping up (or ramping down) the production of pastas experiencing unexpected demand levels. Furthermore, because of extremely high holding costs, it is simply not economically viable for Barilla to maintain substantial finished goods inventories to guarantee fulfilling distributors’ fluctuating order quantities.
The AAA region was hit by a period of economic uncertainty caused by the slowdown of Chinese growth, instability of Middle East and economic recession in Russia. The Barilla brand market share in value terms increased in all of the key markets in this area: confirmed position as leading competitor at national level in Russia, market leader in Turkey, and further expansion in Middle East and Israel markets with an aggressive dedicated strategy. The substantial investment in the Solnecnogorsk (Russia) for pasta manufacturing will significantly improve flexibility and profitability in this area (Barilla,
Pietro Barilla founded Barilla in 1877 it was a small pasta and bread shop in Parma, Italy and becoming one of the biggest pasta manufacturers in the world. Barilla is a family owned company that has been passed down through four generations. They have factories throughout Italy and other countries. For many years, the pasta shop experienced significant growth and their fair share of downside. They have high-quality products that are marketed and produced in their facilities. However, with any company does not matter how small or big they have their struggles. I this paper I am going to analyze the Barilla family, the company, achievement, and challenges.