Barilla’s amongst various Barilla products were variable, thereby leading

Barilla’s distribution network constituted of Barilla controlled Central Distribution Centers (CDCs) and depots. These centres then distributed their products to Grande Distribuzione and Distribuzione Organizzata, which later distributed to the various supermarket chain and independent supermarkets. Along the supply chain, demand forecasting was carried out at each level which means an individual retailer will forecast certain demand, assume the safety stock and would then place the order to DO. Similarly, the DO would again forecast the demand, assume its own safety stock and then place the order to Barilla. This difference in the method of forecasting employed at each level in the Supply Chain amplified any error. The error caused at one end of the supply chain grew exponentially as it went upstream thereby leading to variations and differences in actual demand and the order placed. Also, none of the distributors used sophisticated forecasting systems or analytical tools for determining quantities which aggravated the information distortion. The result fluctuations in quantities ordered overtime was much greater than those in demand data. This distortion along the upstream supply chain lead to bigger swings.Another cause for the distortion was the uneven trade promotions and discounts offered. It was obvious that offering discounts and promotions would increase the quantities ordered, but this increase in order may not indicate the increase in demand for the product. Also, the promotions amongst various Barilla products were variable, thereby leading the distributors to favour certain products over the other. This would again cause the demand for one product to rise and for the other product to fall.Barilla also offered volume discounts wherein orders with full truckloads were given additional perks leading to a false increase in quantities ordered. This false increase meant that since there was no actual demand for the product, it would sit in the inventory longer than anticipated and the order placed for the same product over the next “canvass” would be less or none.The lead time for any order was between eight to fourteen days, after which it was delivered to the GD or DO from Barilla. GD or Do had a two-week supply of Barilla dry products in inventory. Supermarkets had a supply of 10-12 days of supply within the stores. Also, most retailers carried the product in only one or two packaging option even though Barilla offered products in multiple package types.