Having an integrated supply chain might sound impressive, but what exactly does it mean, and how is it different from a supply chain that is not integrated? Simply put, a supply chain that isn’t integrated will be disconnected with each part functioning separately from the other. On the other hand, companies with an integrated supply chain have an increased flexibility to adjust to customer requests, competitor actions and industry events, due to everything working together. Some of the main pros and cons of having an integrated supply chain include:
In any competitive industry today, integrated supply chain management can enable a company to be flexible and adapt to many different situations. Compared to the traditional logistics model, having an integrated supply chain allows companies to do this more quickly and easily.
Most companies have a constant goal of reducing or eliminating waste due to the long-term savings it provides and the increasing eco-friendly manufacturing requirements. An integrated supply chain can significantly reduce waste in a range of areas, such as, saving warehouse space by employing better route management.
Flexibility and waste reduction are just some of the benefits of an integrated supply chain that can reduce costs across the board. In addition, by cost-sharing, a team with high expertise and highly dependable equipment can also contribute to saving money in several different areas.
When moving over to an integrated supply chain management system, it’s important to be prepared for some hiccups in the process, since bad habits that have been built up over time when using a less efficient and less flexible supply chain can take some time to disappear.
Time and Planning
Implementing an integrated supply chain management system in your business is not an easy task, and there will usually be a lot of time and planning required upfront for its successful implementation and continued use by your team.
Loss of Focus
When implementing an integrated supply chain management system in your business, it’s important for company owners to be aware of the risk of lack of focus, where management could end up focusing more on the newly acquired assets than their core competencies.