Integrated Supply Chain Essay

767 words - 4 pages

The overall objective of the integrated supply chain is to integrate the functions of procurement, suppliers, and engineering. Supply chain integration is defined as: “Professionally managing suppliers and developing close working relationships with different internal groups.”1 Integrating these functions into a cohesive group can be complex, especially when dealing with the role of an outside supplier in a company’s supply chain. Once a company decides that they want to integrate their supply chain they must include the suppliers early in the process. In the case studies provided during the course there are examples in the Wal-Mart case study that highlight the benefits of using integrated suppliers into the core of their operations. Wal-Mart actually controls the inventory flow into their warehouses allowing them to manage their cross-docking operations, enabling them to carry little to know inventory storage overhead. While FedEx has suppliers that are integrated into their operations, they are at a much greater level integrated into other companies operations, as a transportation service provider. Integrating suppliers, procurement and engineering will allow a company to create a highly efficient supply chain that continuously eliminates waste.
Integrative strategy development is essential to successful integration of a supply chain. There are many components of an integrative strategy first a company must determine its objectives and strategic goals. These named objectives must be a focused few, with associated metrics. After a company has established its objectives, cross-functional business objectives must be established. With the establishment of cross-functional objectives, the associated team must be brought together. Bring together an affective team will take time. During this step companies will want to bring their supplier or suppliers into the process in order to build an effective team. After the company has established their cross-functional teams the team and management must establish purchasing and supply chain goals and the associated strategy to attain those goals. The goals may be to retain just a few line items within the warehouse in order to avoid stranding its capital on warehouse inventories. The associated strategy to accomplish this goal would be Wal-Mart’s cross docking operations which almost entirely eliminates the need for inventories. The next two steps of an integrative strategy are establishing a performance measurement system, a review process. These...

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