Barilla 案例分析

Running head STRATEGIC SUPPLY CHAIN MANAGEMENT BARILLA SPA Strategic Supply Chain Management Barilla sPA Drainville Drainville Julie Julie PierisPieris Sherline Sherline YuYu Zhewen Zhewen RenRen Yuan Yuan OkafoOkafo EKE EKE IfeomaIfeoma ESC4710 010 March 27 2017 精品文档 2欢迎下载 TableTable ofof ContentsContents CaseCase StudyStudy 2 2 BarillaBarilla SpASpA 3 3 CompanyCompany BackgroundBackground 3 3 CompanyCompany OriginsOrigins 3 Figure 1 Trend of Barilla Sales and Italian Price Index 4 PastaPasta MarketMarket ShareShare 5 Figure 2 1990 Italian Pasta Market by Market Share 5 Figure 3 1990 European Pasta Market by Market Share 5 Figure 4 1990 Italian Bakery Market by Market Share 6 PastaPasta ManufactureManufacture 6 Figure 5 Barilla s Product Divisions 6 ChannelsChannels ofof DistributionDistribution 7 Figure 6 An illustration of characteristic of Barilla s Products 7 UnderlyingUnderlying DriversDrivers andand CauseCause ofof FluctuationFluctuation DemandDemand 7 7 Figure 7 Weekly Demand of Barilla Dry Products 8 Hammond 1994 p 22 8 LackLack ofof DownstreamDownstream VisibilityVisibility 8 TheThe BullwhipBullwhip EffectEffect 9 Chopra others were dedicated plants including long and short pasta plants ChannelsChannels ofof DistributionDistribution A profile of Barilla s products as well as some key features is shown below in Figure 6 精品文档 10欢迎下载 UnderlyingUnderlying DriversDrivers andand CauseCause ofof FluctuationFluctuation DemandDemand Barilla is currently experiencing a high rate of fluctuation in the demand generated from their customer as displayed in Figure 7 below There are multiple underlying factors that contribute to this sporadic demand pattern This fluctuation creates a difficult environment for a supply chain to be effective resulting in negative effects for both the organization and the customer 精品文档 11欢迎下载 In examining Figure 7 we are able to visualize the extreme fluctuation in customer demand Barilla experiences The chart displays that Barilla dry products mean is 300 quintals and a standard deviation of 227 quintals The standard deviation value is close to the mean which showing high variations This demonstrates that the distribution pattern has extreme fluctuation The maximum order number is approximately 900 quintals and the minimum order number of approximately 50 quintals such a large gap shows the unpredictability Barilla currently faces This is a result of customers placing orders in reaction to demand This type of pattern is usually a result of orders being placed due to panic or over Figure 7 Weekly Demand of Barilla Dry Products Hammond 1994 p 22 精品文档 12欢迎下载 ordering in anticipation for customer demand The demand pattern displayed in Figure 7 creates higher cost for the entire supply chain LackLack ofof DownstreamDownstream VisibilityVisibility Barilla and its customers currently do not have infrastructure that allows them to enable information sharing of customer demand throughout the supply chain This results in supply chain stages being blind of actual customer demand This results in a distorted demand pattern as it flows downstream through the supply chain This is reflected in the order patterns Barilla s receive This creates a difficult environment for supply chain to coordinate efforts TheThe BullwhipBullwhip EffectEffect The order patterns shown in Figure 7 are a direct result of the bullwhip effect The bullwhip effect identified in the demand patterns of the supply chain Orders sent throughout the supply chain become larger in variance in comparison to the actual demand of the end customers This effect is generated by a lack of supply chain coordination and information sharing throughout the supply chain Chopra however in the 90 s when the market remained flat sales were boosted by exports This shows that the demand patterns for Barilla are not accurate to the actual consumption of pasta in Italy The graph in Figure 1 as seen on page 3 is representative of Barilla sales which has kept track with the Italian wholesale price index We can use this index as a measure the inflation in the Italian economy The profile of the graph suggests that sales have kept pace with inflation According to this data inferences can be made that demand has remained stable 精品文档 16欢迎下载 ImpactImpact ofof FluctuationFluctuation DemandDemand The high fluctuation in customer demand is known as the bullwhip effect This is a consequence of ineffective coordination and information sharing in Barilla supply chain This lack of coordination has resulted to the implementation of reactionary inventory sales and marketing decisions This creates a detrimental impact on the performance of the supply chain s ability to meet changing demands and customer needs The fluctuation demand has a high impact of the organization ability to meet fluctuating fulfill rates subsequently leading to stock outs In an attempt to minimize these occurrences Barilla tries to maintain high inventory levels of finished goods It is difficult for the organization to response to fluctuation demand patterns as there manufacturing process has limited flexibility The production sequence implemented to keep change over cost low and product quality high has decreased their ability to deal with unexpected periods of high demand fluctuation The manufacturing process inability to response well to high demand fluctuations results in a higher cost for the organization In periods of unexpectedly high demand the desired quality of the product may be jeopardized due to stress of the manufacturing process to produce orders faster When stocks out occur a higher replenishment lead time is expected due to their incapability to increase capacity The impact is felt by an increase in overall cost and a negative effect on customer relationships 精品文档 17欢迎下载 Unexpected variations of demand at the distribution levels results to high inventory holding cost distribution cost stock out cost transportation cost labour cost product availability and risk of a negative customer relationship The increase in inventory holding in order to meet demand exposes it to a higher risk of pilferage and obsolescence Without a plan to change the methods of coordination within the supply chain the organization will continue to increase its cost in trying to meet high fluctuating demand patterns AffectedAffected LineLine ItemsItems There is a significant financial impact of order fluctuation for Barilla When orders are higher than expected this leads to Change in production sequence and additional costs of production which reduces margin and affects lowers profit When production is not met it is a lost sale which also reduces profitability When orders are lower than expected When there is overproduction and the manufacturer increase its finished goods inventory resulting in higher holding cost and generated a need for more space within the warehouse Asset in the balance will be increased it affects cash flow 精品文档 18欢迎下载 JustJust inin TimeTime DistributionDistribution JITD JITD andand costcost reductionreduction JITD is a mechanism to create a more streamlined supply chain through an increase in information sharing and coordination of supply chains for Barilla The requested change demands for a major change in the relationships between Barilla and their customer The overall implementation of JITD is said to have direct impact on cost for the organization In 1988 Vitali stated one of the main contributions to cost in their supply chain was distribution cost inventory levels and ultimately our manufacturing costs if we didn t have to respond to the volatile demand patterns of the distributors Hammond 1994 p 7 The proposed change in their supply chain is said to reduce cost by creating a more accurate depiction of demand through better information sharing and overall coordination The implementation of JITD would give cost reductions to the organization by allowing them to better forecast demand and manage their overall inventory levels Currently the organization is reacting to demand that is inflated as a result of the bullwhip effect In order to try and match demand the organization attempts to absorb the uncertainty through high levels of inventory This creates higher cost for the entire organization and can have negative impact on product availability and customer relationships as they have an inability to forecast actual demand 精品文档 19欢迎下载 With an increase in coordination and information sharing the supply chain would gain the ability to decrease its cost and increase customer satisfaction Better forecasting enables the organization ability to have a more accurate product availability more stable lead times due to a decrease in stock outs an overall increase in positive customer relationships and an increase in profitability Chopra a reduction in replenishment lead time and in increase in product availability and customer relationships The increase in information sharing will allow the organization to create a more accurate forecast of demand throughout the supply chain This results in a better management of inventory Reducing the organization s stock out percentage and decreasing the replenishment lead time needed to meet orders for their customer As the information flows through the supply chain every stage will a more accurate picture of demand decreasing the amount of orders in the supply chain that are bought through panic and over ordering Chopra which holds the supplier manufacturer responsible for inventory levels throughout the supply chain Chopra I don t need you to see my warehouse or my figures I could improve my inventory and service levels myself if you would deliver my orders more quickly Hammond 1994 p 9 This creates more resistance towards their customer It is apparent that they do not comprehend the underlying contribution to the fluctuation in demand With blame being passed from stage to stage in the supply chain there is no focus to eliminate the root cause Barilla customers are currently focused on optimizing their organization and do not have any regard at how it may negatively impact others in their supply chain This shows the customer does not fully understand the benefits of implementing the JITD program throughout their supply chain Currently Barilla customers experience multiple sales incentives during the year The change in the relationship makes their customers feel as if they will no longer be able to take advantage of those situations in turn resulting in higher cost for them CustomerCustomer PersuasionPersuasion 精品文档 23欢迎下载 Maggiali persuaded customers to at least try the JITD program JITD should be considered a selling tool We re offering the customer additional service at no extra cost Hammond 1994 p 8 In order properly to persuade customers to implement the JITD program it is important that Maggiali has a strong understanding of his customer s needs and desires It is important that Maggiali ensure that their proposition show that their customer goals and are aligned with Barilla Proper incentives should be generated throughout the supply chain during the implementation process Chopra therefore it is important that records of all improvements are made This will allow then using the implementation as a display to other customers the benefits for their customers This will create a stronger argument when talking to other clients about making big changes in their relationship InternalInternal resistanceresistance The level of scepticism and resistance faced by the salespeople is an indicator that Barilla failed to establish an effective change 精品文档 24欢迎下载 management strategy Change management is defined as a professional discipline which focuses on supporting organizations on their way to successful transition for a less than ideal status quo to a desired future state Vedenik as displayed in Figure 8 as seen on page 9 In order to ensure that information flows throughout all stages it is therefore important that the manufacturer has the ability to make channel decisions DownstreamDownstream SupplySupply ChainChain VisibilityVisibility According to the Supply Chain 247 article titled Supply Chain Visibility and the Bottom line Gartner in 2016 defined supply chain visibility as providing controlled access and transparency to accurate timely and complete plans events and data transactions content and relevant supply chain information Synchrono 2016 Supply chain visibility provides the supply chain with information on demand patterns at each stage of the chain In other words a warehouse will have the latest information on the sales activity at the retailer end This will enable the warehouse to plan capacity and inventory levels allowing them the ability to schedule and meet the demand of their customer the retailer Similarly the distributors are able to plan their network activity given that they have information to accurately complete plans to provide supplies to their customer 精品文档 29欢迎下载 Providing the manufacturer with insight on demand data downstream enables better and more cost effective decisions for manufacturing and distribution How much to ship to the distribution channel based on demand behaviour Safety stock levels based on based on service levels Optimal lead times that will keep the supply chain responsive and the Optimal service level to maintain in order to maximize the overall supply chain profitability given any variation in end customer demand Figure 10 Visualization of a Supply Chain Weblearnindia 2014 精品文档 30欢迎下载 The end consumer provides the only positive cash flow in the supply chain however all stages in the supply chain have to work together to create a cost effective supply chain This is only possible if the customer demand is communicated to the manufacturer Barilla Further this empowers Barilla to make such decisions as how much to produce based on Their production capacity Capacity of Barilla s suppliers to supply the raw materials to support this planned production The choice and quality of the supplier In general the choice of the supply chain channel decisions may be placed at the Distributor However this will inadvertently serve to move the push pull barrier away from the manufacturer and thus disaggregate the risk to the manufacturer by having the distributor maintain the required inventory Further this may not provide the optimal solution because The distributor has to rely on the supply of the manufacturer There is a higher lead time for the manufacture than the distributor In this configuration the system will place additional delay or burden between the distributor determining demand and communicating said demand to the manufacturer This same logic will apply if the channel decision is moved to any other stage in the supply chain VisibilityVisibility UpstreamUpstream fromfrom thethe ManufacturerManufacturer 精品文档 31欢迎下载 In addition to downstream visibility upstream visibility from the manufacturer or manufacturer supply side visibility is also crucial This means that a manufacturer should have visibility over such criteria as their Supplier s Capacity Responsiveness of their suppliers to changes in demand levels agility Supplier risk 2nd and 3rd tier supplier risks and Ability to predict capacity levels for each supplier in the chain and determine and mitigate potential risk factors Equipped with this information manufacturers are better able to operate in an informed environment and make sourcing aware decisions while having a clear view of supplier capacity Cross 2015 The reservations of Barilla s partners with respect to JITD are well understood given their competitive environment Implementing such a system is not without its risks and challenges The success of such an ambitious venture relies on the ability of Barilla to 1 Implement proper controls needed to optimize processes throughout their network 2 Provide support for a business intelligence tool to support visibility and measure and monitor business workflows 3 Ensure continuous improvement towards ever increasing visibility of the supply chain Lewis 2014 精品文档 32欢迎下载 For optimal results in the supply chain it is important that Barilla controls the channel decision This prevents the bullwhip effect from occurring again as information flows downstream from the end customer through to the manufacturer This control will allow Barilla and its customer to create sales and operations plan that cons