Supply Chain Integration: Challenges and Good Practices

Supply Chain Integration: Challenges and Good Practices
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Abstract
Supply chain integration involves the optimization of performance by enabling each party to focus on specific aspects of the supply chain thus enhancing collaboration. Developing the appropriate integration strategies is both problematic and difficult for firms due to challenges such as costs and complexities, organizational culture, supplier incompetence and poor data integration and management. However, these may be remedied through the use of interventions such as of customer relationship management, vendor managed inventory and distribution requirements planning that directly link producers, suppliers, sellers and clients in the supply chain.
Key Words: Supply chain integration, supply chain management
Supply Chain Integration: Challenges and Good Practices
Supply chain integration refers to the association or partnerships by suppliers and consumers of products. This enables the optimization of performance by enabling each party to focus on specific aspects of the supply chain, thus enhancing collaboration. Key functions must thus be appropriately applied using management skills, technology, and processes essential to the businesses (Bak, 2018). Ultimately, the goal of such integration lies in increasing the profits and reducing potential risks to the parties involved. While supply chain integration offers several solutions to underlying problems in industries, it still faces challenges that can be overcome.
Integration involves four levels, including the internal level, chain level, dyadic level, and network level. Firstly, the internal level involves only aspects or activities crucial to a company and are entirely internal. In contrast, the dyadic level involves two parties that usually conduct business together, such as suppliers and manufacturers. On the other hand, the chain level involves several dyadic levels of relationships that build up to form a larger one, while the network level involves several networks of activities conjoined to work together efficiently (Tozan & Ertьrk, 2015). These varying degrees of integration, both internally and externally, can thus be leveraged by companies to improve supply chain performance.
Internal Integration
Integrating the internal function of an organization plays an essential role in developing the appropriate tools to enhance the working environment. More so, organizations with a wide variety of functions, including manufacturing, storage, and sales, must work efficiently to meet their targets. For example, the internal supply chain involves the process of buying raw materials, producing goods, storing goods, moving goods, and eventually selling them to clients (Pakurбr et al., 2019). Traditionally, these functions are usually managed in isolation; hence creating a company-wide focus approach can create seamless integration, improving performance.
External Integration
Companies with external links that require a supply chain involve a number of parties. Therefore, such chains are prone to failure when a party fails to complete its part as set out in the agreement. In this case, integrating the supply chain enables raw materials t...