Barilla SpA: Pasta Distribution Analysis

Company Overview Barilla SpA is a large, vertically integrated, family owned pasta company based in Italy. It maintains a leadership position among a field of thousands of Italian competitors producing and distributing brand-name pasta. Its operations are divided among 3 production divisions and two distribution channels, based on product shelf life. Distribution was further divided between two central distribution centers (CDCs), based on geography. Customers were divided into three primary segments: Small retail shops; Large independent …

…and selling it very differently than the rest of the industry. The product was put in sealed boxes and marketed as a higher end product. In doing this, the company was able to produce a greater profit margin than its competitors. The JITD program gives Barilla an opportunity to do something very similar. By moving to a distribution system that greatly reduces the variability, Barilla can greatly reduce the "Bullwhip" effect that plagues the industry.