Why Barilla Has an Increased Supply Chain Variability - Case Study Example

With a market share of about 35% in the local market and a 22% market share in Europe, it is no doubt the company is the most successful in Pasta production currently (Gonizzi, 2003). Today, the company is said to suffer a lot in the supply chain largely due to its variability. 

To begin with, the lack of sharing information and visibility in the supply chain is among the reasons. Also, unexpected delays in the supply of products to the distributors and an inability to adapt to events as they happen in real-time are among the issues that resulted in variability in the Barillas supply chain.

While it is expedient to diversify on products a company deals with, this, as seen with Barilla, might come at a cost. The company produces a total of 200 varieties of pasta and has a large variety of packaging that amounts to 470. Moreover, it has a very long setup line, approximately 10 days (Simchi-Levi, 2005). Coping With the Increase in Variability To avoid conflict between players in the supply chain, Barilla has to put some measures in place. It has to be ensured that, Just–In–Time–Distribution (JITD) is implemented, this is to enhance order fulfillment (David Simchi-Levi, Kaminsky, & Simchi-Levi, 2008).

More importantly, Barilla needs to base its production on predictions in demand other than on orders. Additionally, the company has to collect information on demand and put it to use. Lastly, to avoid stress on the retailer’s end, Barilla has to notify the distributors first in case there is a need for additional inventories in the store. The store, also, has to ensure that the arrival of merchandise on shelves is timely. Impact of Transferring Demand Information Across The Supply Chain Transferring demand information across the store is imperative in ensuring that there are no fluctuations in demand.

If Barilla has the correct information on demand for the various products it manufactures, then it will ease the problem of having to produce less demanded goods and the company will have a better chance of producing those in good demand. This also eases the inventory problems from both the distributors’ and retailers’ ends. Vendor-Managed Inventory A Vendor Managed Inventory could work best for Barilla. The company will have the necessary information from the buyer on the demand for given products.

In this case, Barilla will be working on supplying the goods, without fail, as demanded by the buyer. The best thing about the setup, according to Sari (2007), is that it addresses inventory problems and helps reduce the chances of producing goods that are not in demand or delays in the production of goods high in demand. Supply Chain and Conflicting Goals Information flow in the supply chain process needs to be addressed if the company can eliminate the variability that exists in that chain.

Barilla has to focus on acquiring real-time information on the demand for the different products. This way, it becomes easier to address the need to counter the demand level. Also, it will eliminate the inventory problems of retailers as they will receive goods at the right time and they will not have to deal with problems of lacking given products that the customer need.