Why is supply chain integration important to organizations?
Supply chain integrations goal is to provide oversight of the whole supply chain. In theory this does not sound difficult, but the problems lie with all the actors and the programs they use for their portion of the supply chain. If they do not talk, then it takes longer to find needed information. For supply chain integration to work, a company has to have visibility from the producers, to manufacturing, storing, and shipping all the way to their customer (Khurana, 2020). It helps a business be able to properly forecast how long it will take to resupply either its stores or warehouses. Being able to successfully do this enables them to meet customer demand and improve their integrity with customers. Finally, with an integrated supply chain, a company can have flexibility. With flexibility, a company can react to changes like competitors action and demand (Khurana, 2020). This would mean that if a company notices that products are starting to sell quicker, they have the ability to redirect inventory to meet that demand.
Khurana, M. (2020, August). Top 5 Benefits of An Integrated Supply Chain. Inspirage. Retrieved from https://www.inspirage.com/2016/09/top-4-benefits-integrated-suppy-chain/.
Supply chain integration is an essential element of all successful organization. Creating and maintaining an effective supply chain is one of the main components of assessing and meeting consumer needs. Having a coordinated operation within a supply chain between suppliers and retailers can assist in the procurement, development, and delivery of products and goods.
One of the main benefits of having an integrated supply chain is having the ability and flexibility to change certain process and operations to either change how a product, or parts of a product, are distributed and moved throughout the supply chain. Having the agility and relationships established within an organization’s supply chain gives an organization the ability to make such adjustments in a timely and costly manner.
Another major advantage to having an integrated supply chain is having link within the supply chain on the same network. Having a supply chain on the same network allows data to be easily accessible to everyone (Hoey, 2019). Allowing a supply chain to have access to the same data helps with overall efficiency of the supply chain and allows for the organization to see what areas of the supply chain require more attention so adjustments and improvements can be made. Aforementioned, having the ability to be more flexible allows for cost savings, which eventually leads to an increase in profit and a decrease in waste.
Hoey, B. (2019, January 8). 5 benefits of supply chain integration. Retrieved March 16, 2021, from https://blog.flexis.com/5-benefits-of-supply-chain-integration
SUPPLY CHAIN INTEGRATION
The following two articles contain information on integrating the supply chain and will be beneficial to you as you work on this module’s assignments. Please review them for background information, and use the article on the Case page as another reference for your case assignment.
Songini, M.L. (2002). SAP plans apps to link plants, supply chains. Computerworld, 36(45), 20. Retrieved on December 9, 2014, from ProQuest. (EBSCO Accession Number 7887672)
SAP has set up a team of developers to focus on collaborative production and supply chain applications that will work together as one system. The promised product suite will integrate operations ranging from raw materials procurement to the shipment of finished goods. The envisioned result: improved inventory turns, shorter manufacturing cycle times, better quality management and a reduction in overall operating costs and working capital needs.
Here is an article concerning the integration of front-end and back-end systems.
Holley, C. J. (2002). The urge to merge: Integrating front- and back-end systems. Customer [email protected] Solutions, 21(3), 38-41. Retrieved on December 9, 2014, from ProQuest. (ProQuest doc ID 208160220)
Integration between front- and backend systems, including complete supply chain integration, can enhance customer service, increase productivity and, ultimately, provide significant returns on investment. Without this integration, back-end systems like human resource, finance and ERP applications remain unexploited, and frontend systems like marketing, sales, CRM and customer service and support applications are relegated to basic contact, account management and order processing functions. The primary challenge is the often proprietary and disparate technologies developed by multiple vendors that run front- and back-end systems. The cost of determining the exact points of interface between systems, then designing custom interfaces for these points, is often higher than what many organizations are willing to pay. The good news is that emerging Web services standards are making integration easier.