What is Supply Chain Integration?
A Supply Chain incorporates different departments engaged with the procurement of raw materials, manufacturing products and delivering finished goods. Supply Chain Integration is a process where all departments of an organisation come together in a single system for the fulfilment of consumer demand. Supply Chain Integration requires the collaboration of supply chain partners in order to ensure everyone is working efficiently towards organisational goals. All steps are scrutinized as parts of the supply chain of the product.
Stages of supply chain integration
- Selection of vendors: The first step of supply chain integration is to select a vendor to provide materials and finalisation of the deal to provide set raw materials during a specified time at a set cost.
- Operational integration: In the second step, various operations within an organisation are integrated to achieve optimum performance.
- Inbound integration of supply chain: All the departments of an organisation are interlinked by Information Technology that allows them to work together efficiently, share their requirements, information and identify opportunities.
- Outbound integration of supply chain: The last stage involves internal departments as well as external vendors. Outbound integration is significant for the delivery of finished goods and encouraging vendors to generate the best possible results.
Benefits of Supply Chain Integration
- Effective inventory management.
- A better understanding of customer requirement.
- A cost-effective and efficient supply chain with increased profit margins.
- Reduce material waste and time.
- Keeping up with demand.
- Getting early warnings for risks in the supply chain.
Supply Chain Integration challenges should be reviewed periodically. A proper integration in the supply chain can help to generate more profit for the entire supply chain.