Case Study: Barilla Spa

In order to address such problem, the company may opt to offer discounts in certain time of the day to boost the sales of its bread. For instance the bakeshop may provide 50% discount on its baked goods when stores are about to close. In doing so, it will not only reduce the spoilage of the bakeshop, but would also broaden the appeal of the bakery-café to a bigger market. The discount serves as a tool to segment the market that the company is catering into, and thus be able to maximize the sales per target market.

It is ideal to have the option to purchase food right then and there, otherwise customers can just as easily bring their business to Carpe Diem, Satori Coffee House, Starbucks, or Beaners, all of which have moderate to high food selections (shown in Table 5). Todd should consider discontinuing the sale of retail items, and invest in a toaster oven and mini fridge in order to provide customers with more food options such as bagels, breakfast sandwiches, pastries, and fruit cups.

distributors would have to submit their Stock Keeping Unit (SKU) so that Barilla can control it.

Barilla, the leading pasta manufacturer in Italy, faces increasing problems related to demand fluctuation. Their distributors also suffer from high inventory holding costs and low service levels on the other hand. This report explains, why the company and their distributors are troubled with this situation and how Barilla intends to solve it. The problem Barilla experiences is called the “Bullwhip Effect”, i.e. that demand variability increases when moving up the supply chain. Several factors enforce this Bullwhip Effect, e.g. high lead times, poor demand forecasting, and batch ordering. In this report we will point out, that exactly those aspects can be identified as the underlying reasons for Barilla’s problems. In a

During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand

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

The food will be promoted via newspapers and will offer a coupon for $0.40 off for the first can purchased—and the retailer will receive the regular margin and be reimbursed for redeemed coupons by Cats Gone Wild. Past experience indicates that for every 5 cans sold during the introductory year, one coupon will be redeemed. The cost for the newspaper advertising campaign will be $500,000 in addition to coupon redemption reimbursements. Other fixed overhead costs are expected to be $180,000 per year.

* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco

Revenue stream generated from the customer segments may get impacted with changes in Transaction Costs and subsequently Price per Kit.

One of the underlying causes of the difficulties that the JITD program was created to solve was the effects of inconsistent demand that came from Barilla’s distributors. The extreme demand variation strained Barillas manufacturing and logistics, and made very hard for Barilla to meet that demand. For example, as noted on the case “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 calculate the optimal the Keurig-cup price, we first considered the data from Case Exhibit 7B, to determine the total percentage of consumers who are willing to purchase at each of the price points.

In 1990 Nestlé Refrigerated Food Company, NRFC, subsidiary of Nestlé S.A, had to decide about the launch of a refrigerated pizza, under the name of Contadina pizza, continuing the build of the refrigerated food category it started few years ago with the launch of the Contadina pasta and sauces, and where the satisfying results exceeded expectations, NRFC would be then the first mover in this new category product, pre empting its serious and major competitor: Kraft general food who was on his way to make a similar launch(their launch is expected within six months).

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.

Distribution channels interfaces the association 's item or administration to its purchasers; and in a maker buyer (administer supply) channel, as on account of Starbucks, keeping up a faculty association with the clients is critical (Brassington & Pettitt, 2000). However, from a dissemination perspective Starbucks got preference by adhering on to its winning store area recipe for its new stores.

For our Gemba project, we decided to analyze the order fulfillment procedure for Cup of Joe, a coffee shop located in the Lennox Town Center. In order to capture the establishment’s peak hours of business, we primarily visited during the hours of 9:00am-12:00pm. We focused our attention on orders for baked goods, coffee, and espresso drinks, as these products are the shop’s main source of revenue and reputation. On several separate mornings we were able to observe an average of 125 orders over three hours (a takt time of 1.44 minutes). In the evening, there were often less than a dozen orders every hour. Since every order is slightly different, we have described the average order and the steps in the process that are consistent in almost every situation. We have identified multiple areas for improvement, which are referenced in the sections entitled analysis and recommendations.