What Is Supply Chain Integration?
March 22, 2017
Supply chain integration represents a close alignment and coordination with a supply chain.
Supply chains can be made up of all parties involved in fulfilling a purchase to the end customer. This can be inclusive of items such as raw materials, product manufacturing, transportation of completed items and all supporting services such as wholesale partners.
For example, let’s consider the manufacture of an phone. The company assembling the phones would need to purchase all components including the outer casing. The company building the external casing would need to purchase materials to produce them, including glass. All of these work to form part of an organisations’ supply chain of materials. Once the phone is built, it’s on its way to a wholesaler who may then work to have it delivered to to a retailer who ultimately sells it to the end user. Every step of this process is considered to be a part of the supply chain of this phone.
So therefore, it is important to come to an understanding within your business on how you can assess and analyse your supply chain processes to help you reduce costs, increase efficiencies and build additional value into your supply chain.
This means it is important for everybody in your supply chain to be working together a team. This will impact your inventory management – ordering materials and delivering them as needed rather than buying excess bulk quantities, help reduce known costs by setting up long-range contracts, and provide guaranteed customers for many stakeholders in the chain. This in turn will lead to wastage reductions by eliminating elements of double handling, give you flexibility, and give your company to have higher profit margins.
To be truly on top of your supply chain however, consider if it is possible to integrate data from across your operations. It is regarded to be the best way to ensure that your supply chain is successful and sustainable in the long term.