devoted to becoming a better customer. Potential threats like power outages, storms, disruption in communications, equipment breakdowns, and terrorism are not easily predicted thus are costly to prepare most of the time. Good communications and resource sharing are helpful in responding to disruptions, but those involved in the supply chain must be extra careful to high levels of risk in their quest for integration. Integration Process The integrating of a supply chain is usually an incremental process that gives priority to the investments with the highest potential returns. The supply chains of different units of a business are different priorities and approaches based on strategies, needs, and potential returns. Many companies use an approach that begins and is developed internally, and it gradually works outwards through the supply chain. The first step is usually to make in-house improvements like reductions in inventory which will reduce working capital, transportation costs, and warehousing (Faden, C. 2014). With this move in place, the integration effort will start to progress outward.
SUPPLY CHAIN INTEGRATION 9 The process of integration begins with supplier selection and development, approaches to integration, and then management tools that are available to support these efforts. Finally, the factors that are critical to success are identified, and the metrics for evaluating performance and progress are suggested. Supplier Selection and Development Process This process is a strategic initiative that is undertaken as part of the overall competitive strategy of a company. When a corporation uses outside suppliers, they will have to do a search for competitive providers based on the capability needs. The providers should be carefully selected because they will have a long-term and intimate business relationship. Integration by Function Many companies prefer the use of a function by function method to integrate the supply chain focusing on features that offer the highest returns. The most frequently combined features are inventories, procurement, manufacturing operations, inbound logistics, and the distribution of product & services. A successfully integrated supply chain must be open to function shift ability. Integration by Process Performance is improved when the supply chain is a set of integrated process capabilities rather than separate corporations and functions. Integration will be most successful across multiple processes. Barriers to Integration
SUPPLY CHAIN INTEGRATION 10 Many obstacles can impede the integration process. Optimization of one part of the supply can lead to the entire system being sabotaged. For better results to be attained the system should be optimized as a whole. Barriers to integration include: Poor communications Lack of mutually acceptable goals Inappropriate metrics for evaluating performance Clashing of corporate cultures Incompatibility of capabilities in electronic design technologies Lack of commitment in the nurturing of relationships
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- Summer '16
- DR. WASIKE
- Supply Chain Management