Supply Chain Strategy: Barilla's Supply Chain Strategy

Barilla’s supply chain strategies includes the procurement of their raw materials, the transportation of the materials to their production plants, manufacturing the raw materials such as flour into packaged pasta and lastly the distribution of their products to Barilla central distribution centres.

To increase responsiveness of the supply chain, Barilla can use supply chain drivers such as inventory, transportation, facilities and information. The inventory driver contains all raw materials, work in process and all finished goods that is within a supply chain. The trade-off in inventory is between the cost of holding inventory and the amount of inventory that a product currently has in storage. More inventory entails greater responsiveness

It includes combinations of various transportation modes and routes. The trade-off in transportation is between the cost of transportation and the speed at which the product is transported. Faster modes of transportation increase costs but provides greater responsiveness to customers. Barilla can choose to use slower modes of transportation that reduces cost but decreases the responsiveness to customers. However it could be a practical approach if their suppliers are situated near their production plants. Transporting less than truckloads allows a supply chain to increase responsiveness but not efficiency. Barilla could design their supply chain such that the production plants are located within close proximity to their markets. In this Products can be transported to the markets in full truck loads and in this way, the supply chain can be run cheaply without holding too much inventory in

They store inventory between the supply chain stages such as distribution centres, retailers and warehouses. Another function of Facilities is to transform raw materials into finished goods at actual physical locations. Barilla may design their facilities to be flexible so that it can respond quickly to market demands as compared to a dedicated facility. If Barilla’s facilities are located close to the market, responsiveness can be increased at the cost of decreased economies of scale that might be achieved with a centralised location. On the other hand, Barilla has to assure that the company’s facilities is not under capacity as this will cause the company to be less responsive compared to having facilities that are appropriately sized or has excess capacity. Increasing the number of facilities will increase Barilla’s facility and inventory costs but it decreases the transportation costs and reduces response time. However, increasing the flexibility or capacity of their facilities will increase the facility cost but decrease the inventory costs and response time. By setting up their facilities in both centralised and decentralised locations and also considering the proximity to customers, Barilla can improve the efficiency and responsiveness of their supply chain. Barilla can also use different approaches to manufacturing for the plants located