Supply chain integration definition

Supply chain integration is a close collaboration and harmonization with shared information system management in a company. It includes all resources needed during input acquisition as well as all activities involved in producing the intended result. Supply chain integration consists of numerous steps. First, the organization chooses a vendor to supply specified goods. Second, the corporation contracts with vendors on a predetermined volume of products and services to supply over a specified time period. Finally, a fixed price for supplies is established, and payment arrangements are established. The essay covers the issues that a business faces as a result of supply chain integration.

While attempting to connect supply chains, firms confront a number of obstacles. Firstly, there are weak communication networks. Supply chain requires up to date data and information. Supplying vendors receive delayed, inaccurate, or out of date data about meetings, recipes, and production orders because of poor network. It affects the entire running of the organization. Firms merge with other businesses to improve productivity and share resources to minimize expenses (Msimangira & Venkatraman, 2014). Communication barriers lower the production process, and therefore, supply of goods to the market becomes delayed. Firms with poor communication networks suffer misunderstanding challenge leading to poor governance.

Secondly, lack of collaboration may occur between vendors and the company. Exploitative nature of big businesses, greediness, and need to make quick profits may contribute to poor relations. The management’s focus on the administrative responsibilities makes it difficult to attend to concerns of the vendor companies or suppliers. The reluctance reduces the bonding between the stakeholders and technicians from the partner company, and as a result, illegal goods are produced at the wrong time (Msimangira & Venkatraman, 2014). The company ends up in a loss because of failure to provide the right products at the right time.

Thirdly, organizations may lose customer preferences. One of the aims of companies is to satisfy customer needs as well as making profits. The emerging businesses are replacing organizations which do not upgrade to modern methods of productions. With the rapid changes in technology and customer desires, companies should be transparent to their customers on production recipes and ingredients (Wisner, Tan, & Leong, 2014). With modern possibilities, clients prefer attractively packaged goods. Therefore, companies that do not meet these requirements face stiff market competition. It might lead to the closure of the firm. Due to supply chain integration, the vendor company undergoes losses as a result of the failure of the closed business.

Lastly, there is a globalization, which refers to the movement of companies close to its customers. For organizations to maximize profits, there is need to minimize production costs, especially supply chain-related. However, globalization becomes a challenge, when the whole “house” company has to move (Wisner et al., 2014). Costs of establishing another firm or relocating a business to another position are high and unaffordable. Companies relying on central chain for supply of raw materials and delivery of by-production might end up shutting down.

In conclusion, it is evident that integrating supply chain has several challenges. The first problem is not meeting customer preferences. Due to integrated technology, organizations try to merge their recipes to form one that might satisfy customers; as a result, customers lack faith in the goods. Another challenge is disagreements between vendor and master company. The mixed management creates disagreements on how to manage the entire corporation. Lastly, there are weak communication networks between the merged companies. Since each organization has its own communication system, centralizing the system into a common one is a challenge. They may occur as a result of merging into one primary business or starting the partnership.

References

Msimangira, K.A.B., & Venkatraman, S. (2014) Supply chain management integration: Critical problems and solutions. Operations and Supply Chain Management, 7(1), 23-31.

Wisner, J., Tan, K.-C., & Leong, K. (2014). Principles of supply chain management: A balanced approach, 4th ed. Boston, MA: Cengage Learning.