Benefits of Supply Chain Integrations

Benefits of Supply Chain Integration

Supply chain management allows businesses to automate data and integrate their information into a systemwide platform. When companies automate their data across the entire organization, they gain real-time perspective into their supply chain network and a better understanding of how to scale their business.

One of the main benefits of supply chain integration for businesses is improving overall efficiencies and eliminating wasted time. Establishing scalable practices helps freight forwarders, shippers, and other logistics providers stand out above their competitors, which is even more critical in the global supply chain. As a result of growing pressures, organizations are expected to implement key supply chain processes to meet unique customer needs.

When the term “supply chain management” was first coined in 1982, it helped provide a methodology that included the 4 elements of supply chain integration and the 5 elements of supply chain management. This methodology has since been updated to the 6 elements of supply chain management – Plan, Source, Make, Delivery, Return, and Enable. Strategic leaders of supply chain and logistics businesses often explore these elements of supply chain management when planning their supply chain integration projects.

Supply chain operations are often organized using the 10 elements of supply chain management:
1. Integration
2. Operations
3. Purchasing
4. Distribution
5. Agility
6. Innovation
7. Performance Measurement
8. Alignment
9. Technology
10. Coordination

For supply chain leaders, approaching the management of their operations using these elements helps them focus on customers, provide better service, and transform their business faster.

Supply Chain Itegration Details

Supply Chain Integration Details

Supply Chain and Logistics businesses looking to streamline their operations understand the significant value of supply chain integrations, as integrations improve and automate the communication among all involved in a product successfully reaching its destination.

External integration in supply chain management helps streamline the flow of materials and information between suppliers, customers, and software vendors. The scope of the supply chain integration processes includes practices related to customer service, agility, and scalability. Integrating supply chains is essential for businesses competing in the current supply chain and logistics marketplace, as many shippers now expect more digital capabilities and customized solutions from their freight forwarder or logistics service provider.

Why is Supply Chain Integration So Difficult in Global Supply Chains?

The growth of the global supply chain, plus numerous disruptions and delays over the last few years, has increased interest in supply chain integrations. Supply chain professionals understand that manufacturing, distribution, and shipping take place in a global context and things are always shifting. Supply chain integration supports their efforts to develop better processes, deliver better customer service, and operate more efficiently.

Despite some of these benefits, there are significant barriers to supply chain integration. These barriers to supply integration are typically insufficient knowledge of the functions involved, lack of communication, poor working relationships, conflicting goals, and lack of direction from senior management.

Similarly, some barriers to effective supply chain management are lack of top management commitment and support; unclear organizational purpose or objectives; resistance to change; lack of motivation and employee empowerment; poor or unhealthy corporate culture; mistrust among employee and supply chain partners; and lack of education and training for employees and suppliers.

Advantages and Disadvantages of Supply Chain Integration

Supply chain integration is a process where all those involved in producing a product are integrated into a single system. One of the benefits of supply chain integration is creating a strategy where everyone effectively works toward the same goal. Supply chain integration — external and internal — helps create a larger ecosystem of supply chain partners and customers. Using integrated supply chain planning also brings departments across an organization to improve operations. Similarly, external supply chain integration streamlines the flow of materials and information between suppliers, customers, or software vendors.

Advantages and Disadvantages of Supply Chain Management

One of the main advantages of supply chain management is the chance to improve the efficiency of the shipment process and the overall customer experience. Nevertheless, business leaders and managers still face many challenges when managing their supply chains. Many of these supply chain leaders need to identify and implement technology that will allow them to devote more time to developing strong partnerships within the industry.

Using supply chain software and logistics technology effectively will enable existing customers, partners, and vendors to connect better with freight forwarders and shippers alike. Supply chain integrations enable these connections to happen in a much more efficient way. Organizational leaders and supply chain managers play significant and essential roles in an organization's planning and implementation process, which can result in a well-coordinated supply chain management process.

What Is Supply Chain Integration

According to the National Academies Press, supply chain integration is "a continuous process that can be optimized only when OEMs, customers, and suppliers work together to improve their relationships and when all participants are aware of key activities at all levels in the chain."

More simply put, supply chain integration is a process where all those involved in the shipment, storage, and production of goods have visibility into all activities during the shipment and production process. This includes all of the individuals, organizations, technology, and resources involved in developing, distributing, and selling a product.

The importance of supply chain integration is understood by business leaders globally. Supply chain leaders understand that manufacturing and distribution processes are complex and time consuming, so having the data to track and plan is essential. Supply chain integrations bring many different functions together to promote collaboration and overcome the barriers and disconnection that decrease operational efficiencies and success.

The different types of supply chain integration, such as external and internal, help to create a larger ecosystem of supply chain partners and customers. Supply integration strategies may enable companies to proactively plan for any challenges or future threats imposed on their businesses.

Types of Supply Chain Integration

Business leaders and supply chain managers increasingly understand the importance of integrations. That is because organizational efficiencies improve when information is shared across the supply chain. The following section will briefly discuss some of the different types of integrated supply chain management with examples.

There are several different types of supply chain integration. First is functional integration in supply chain management, which reduces fragmentation between various entities in the supply chain. This supply chain integration approach enhances communication among everyone involved in helping a product successfully reach its destination.

The second type of supply chain integration strategy is distributor integration, which is an approach to integration that improves communication between suppliers and distributors. The importance of supply chain integration is especially relevant to businesses looking to streamline communications and improve customer service, agility, and scalability.

When selecting a supply chain integration approach, business leaders can consider the advantages and disadvantages of each type. Various additional readings and resources are also available online.

What Is Supply Chain Integration Example

One supply chain integration example includes when freight forwarders use supply integrations to automate the required documentation for customs. New supply chain technologies allow for improved efficiencies to reduce costs, save time, and convert currencies.

Transport management system (TMS) software enables freight forwarders to manage their entire network from one coordinated system; technology is instrumental when integrated into a freight forwarders’ TMS. Companies increasingly invest in digital tools because future work efficiencies depend significantly on increased collaboration. However, one of the vital supply chain issues is how to best use technology to automate processes and communication.

Supply Chain Integration: Definition and Challenges

Business leaders understand the importance of supply chain integrations in leading and managing their organizations as they scale and face supply chain disruptions. Supply chain integrations involve clear, and often automated, communications of data and documents between buyers and sellers, freight forwarders and shippers, and anyone else who is involved in shipping goods from point A to point B.

Information and data sharing is essential for supply chain integration to work effectively. For example, shipment milestones and visibility data are often shared directly from a real-time transportation visibility provider to a freight forwarder's TMS. As a result of this reliance on data sharing, one of the challenges of supply chain integration is ensuring that the data is routed to the correct destination and is translated into the proper file type. Using a supply chain integrations professional like Chain.io helps businesses ensure their integrations are set up properly and will work efficiently. Supply chain integrations require both coordination and alignment for all involved.

Supply Chain Integration: Challenges and Solutions

A challenge and solution facing those leading supply chain strategy and implementation lie in the ability to build long-lasting relationships between all those involved in the supply chain process. Business leaders strive to create long-term relationships by devoting the time needed to develop such relationships.

The effective use of technology also supports the supply chain integration or management process. When business leaders identify and implement effective technologies, the teams they lead can devote more time to developing business partnerships. Thus, using technology effectively enhances communication between customers, partners, and vendors.