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  • 8/19/2019 L07_Barilla042015#1

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    Barilla Case, page 1 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Vendor Managed Inventory:

    Barilla SpA 

    Rev. 4/15

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    Barilla Dry Product

    Factories

    Barilla CDCs

    GrandeDistribuzione

    DistribuzioneOrganizzata

    Chain

    Supermarkets

    Independent

    Supermarkets

    Signora Maria

    Shops

    18Barilla-Run

    Depots

    35% TL

    LTL

    TL

    TLTL

    LTL

    LTL

    65%

    90%

    TL= Delivery in truck-load quantities.

    LTL= Delivery in less-than-truck-load quantities

    10%

    Barilla Supply Chain 

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    Barilla Case, page 3 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Week

    Sales at Cortese Northeast DC

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    Barilla Case, page 4 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Mean = 300 Quintals

    Std. Dev. = 227 Quintals

    Orders from Cortese Northeast DC

    to Pedrignano CDC

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    Barilla Case, page 5 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Information Distortion:

    The Bullwhip  Effect

    • Order variability is amplified up the supply

    chain: upstream is worse

    • Apparent information distortion: what you

    see is not what they face

    • Bullwhip, whip-saw, whip-lash effect; or

    acceleration principle; or the Beer Game phenomenon

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    Barilla Case, page 6 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Bullwhip at Barilla

    Causes Impact

    Active Learning: Name two causes of the bullwhip for Barilla.

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    Barilla Case, page 7 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Vendor-Managed Inventory (VMI) 

    Without VMI With VMI

    Customer

    Orders

    Time Time

    Inventory at

    Customer site

    Shipment requests are automatically generated when inventory falls below a trigger level.

    trigger level

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    Barilla Case, page 8 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    JITD (VMI) Proposal -

    Plant Bar. CDC Distrib. Retailer Customer

    Why Should Barilla Have Decision Rights?

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    Barilla Case, page 9 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Resistance to JITD

    Resistance Solution

    Inside

    Barilla

    Distri- butors

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    Barilla Case, page 10 Laura Rock Kopczak, Panos Kouvelis, Hau Lee, Warren Hausman

    Selling to the CEO… 

    Barilla Distributor


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