Instructor: ELENA ASHER
Integrated Supply Chain
Supply chain is the process from the initial raw material to the ultimate consumption of the finished product linking across supplier-user companies. The definition of supply chain is also known as the functions within and outside a company that enables the value chain to make products and provide services to the customer. Supply chain consists of multiple members like suppliers, manufacturers, retailers, distributors, and customers
An integrated supply chain consists of close collaborative relationships with incorporated data and business processes. The collaborations include internal integration, customer integration, relationship integration, technology, planning integration, measurement integration, and supplier integration (Westbrook, 2002).
Integrated supply chain facilitates the organization’s ability to deliver the right product, to right customer, at right time, and at right place. The integrated supply chain creates close links and relations among buyers, suppliers, customers, and companies. In today’s business environment supply chain is managed through integration of different activities and partners in supply chain.
Contribution to Organizational Efficiency and Effectiveness
Supply chain consists of suppliers, manufacturers, transporters, warehouses, retailers, third party logistic service, and customers. The integration helps to maximize the organizational effectiveness and efficiencies. The objective to manage supply chain is to maximize the global value generated relative to profit generation. Supply chain integration is not achieved overnight. There are many obstacles to overcome to create effective supply chains. The integration is not only beneficial for the company but also for the partners also, e.g., suppliers, manufacturers, distributors, and customers. Basic benefit starts from the trust developed among members. Forecasting is also enhanced and become effective because of enhanced information flow. Resilience is also an advantage that provides organizational effectiveness through integrated supply chain (O’Flynn, 2013). The contributions of supply chain integration in organizational effectiveness are provided through flexibility, inventory management, enhanced profit margins, warning, and consideration (Basu, 2013).
Supply chain integration provides the organization with managing through operational flexibility and helps management take real-time action dealing with situations, positive or negative. Companies can congregate knowledge and information through their supply chains, which permits them to be generally aware of what their competitors are planning beforehand. For instance, if a competitor is planning to launch a new product, a manufacturer can influence its integrated supply chain to provide the required parts, activate a marketing plan and rush a prototype from the design stage to the launch stage within a short time. Supply Chain integration maintains and delivers efficient, sustainable, cost-effective end to end supply chain performance.
Integrated supply chains enhance the inventory management. It intelligently manages the overstocked and under stocked circumstances. These conditions if not managed well give rise to cost burdens. These negative conditions also give rise to product obsolescence and losing customers. By employing integrated supply chain the retailers can regulate swiftly and adjust their inventory levels before hand because of predictable changes in customer demand to guarantee that the accurate level of stock is on hand. Speed is another issue or resolution because of integrated supply chain, especially in a global business environment. Integrated supply chains also assist just-in-time manufacturing, in which companies assemble and manufacture products as the orders come in, e.g., Dell and Toyota. Properly managing