Supply Chain Integration Essay

1185 words - 5 pages

In a world dominated by large businesses it is difficult for a small business owner to compete. One of the major obstacles any company faces is figuring out how to have an effective supply chain. With the Enterprise Integration Act of 2002, the government will support the integration of data between manufactures, assemblers and suppliers and provide supply chain standards. The main improvements standardization will bring in regards to supply chain management are reduce overhead costs, increase production and provide a higher level of quality management.
The Enterprise Integration Act of 2002 proposes that the National Institute of Standards and Technology (NIST) be in charge of implementing an enterprise integration process with manufactures geared toward increasing efficiency and lowering costs. The goal is to have a central agency that can connect and integrate small and large manufacturing companies to create a standard for electronic data exchange. “This kind of integration will help large and small businesses in the industries supply chains to reduce costs and design cycles” (United) Through electronic technology companies can produce a supply chain that meets the constant change in customer demand. Establishing such a supply chain requires standards and enterprise integration. Manufacturers will need to invest in compatibility software that allows data exchange throughout all stages of the supply chain. “The intent of standards is to streamline interaction throughout a supply chain, to speed up transactions, and to reduce inventory and delays. If a big automaker, for instance, changes a design specification in a bumper, its suppliers could quickly and easily see how the new specification affects their components” (Supply) By having a consensus on data flow small and large businesses can communicate through the supply process and provide immediate updates, this in turn will lower the cost of doing business. By adopting a standard means of data flow companies will also save in being able to reduce their information technology budget. Maintaining an outdated delivery system and having to constantly upgrade or change software to keep up with the industry is an overhead cost that can be decreased when all companies along the supply chain are integrated. Another advantage to standardizing supply chain management is the increase in overall production.
Productivity is a key indicator in the economic performance of a company. An increase in productivity usually correlates with increases in sales and profit. The Enterprise Act of 2002 can influence the productivity of small and large companies by providing a standard operating process that streamlines manufacturing and increases production to the overall supply chain. With the introduction of technology to manage the production process, product lines then become dependent on data flow between all manufactures. When each company that interacts with each other has a different...

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