Distribution Channels:

The company has divided its product lines into Dry product categories and Fresh ones.
Further details are shown in the below figure.
75% sales

Product Categories

25% sales

Dry Products

Bread Sticks
Dried Toasts
Pasta*

1 Day

Shelf Life

Flour

10-12 weeks

Biscuits

18-24 months

800 SKUs

Cookies

Fresh Products

21 Days

Fresh Bread
Fresh Pasta

* Pasta was made in 200 different shapes and sizes, and those 200 have formed 470 SKUs from
an 800 SKUs for the Dry Products (almost 60% of the dry products SKUs). The transformation
from a 200 into 470 SKUs caused by different packaging and weights (5kg, 2kg, 1kg).
About 65% of Barilla products were shipped to two Centre Distribution Centres
(CDCs). One located in the north (Pedrignano) and the other in the south (Naples). Fresh
products stayed at the CDC for maximum of three days except Fresh bread of course, which
bypass the CDC due its low shelf life (one day). Other dry products were typically held for a
month.
From the Barilla CDCs, 90% goes into two distributors. The first one was Grande
Distribuzione or (Large Distributor), which handled the dry products destined for chained
supermarkets. The second distributor was Distribuzione Organizzata or (Organized
Distributor), which was serving the independent supermarkets. A Supermarket typically held
from ten to twelve days of inventory from the dry products. The noticeable thing is that the
supermarkets carries an average of 4,800 SKUs, but when it comes to Barilla products, they
choose to carry them in only one or at most two packaging options.
The other 10% from the CDCs meets with the remaining 35% from Barilla plants at
Barillas Own 18 Run Depots. These run depots were the only source for the small grocers or
Signora Maria Shops, which typically held over two weeks of inventory at the store level.
The Figure in the next Page explains Barillas Distribution Channels.

** The JITD Proposal was meant to be applied on the Dry Products, which sold through the
Distributors. Although finally Barilla applied it first on his own Run Depots as an Experiment.

[1]

Distribution Ordering Procedures:

Orders are placed with Barilla once each week, after the distributor checks their
inventory levels. Then after eight days of placing the orders, Barilla sent his products within a
week, so the distributor will have his order not later than a fourteen days of placing it.

[2]