Barilla S.p.A.
"40% inventory reduction. 98% fill rate. At the same time."
Barilla demonstrated that the choice between inventory and service level is a false dilemma.
The challenge
Barilla's pasta supply chain was suffering from a severe bullwhip effect: demand from distributors bore no relationship to actual consumer consumption. The result was excess inventory in some locations, stockouts in others, high manufacturing costs from production swings, and distributor relationships strained by unreliable supply.
The TOC solution
Barilla proposed "Just-In-Time Distribution" (JITD) — a vendor-managed replenishment approach aligned with TOC's pull-distribution logic. Instead of distributors ordering on forecast, Barilla would manage replenishment based on actual sales data from distribution points, in small frequent shipments.
What happened
The Barilla case became a Harvard Business School teaching case (HBS 9-694-046) and a cornerstone example in every TOC supply chain curriculum. The insight — that vendor-managed, demand-driven replenishment eliminates the inventory-service tradeoff — later became the foundation of Goldratt's TOC Distribution methodology, applied in thousands of companies globally.
Source
Harvard Business School Case 9-694-046 (Hammond, 1994); Theory of Constraints Handbook, Chapter 11