A supply chain refers to all the links required to create and distribute a product for a company, including: suppliers, manufacturers, shipping and logistics, retailers, and customers.
Supply chain integration is an enterprise resource planning (ERP) strategy that brings as many links as possible into a closer working relationship with each other toward the goals of improved response and production time, and reduced costs and waste.
Developing an integrated supply chain operation has a lot of upsides. It offers effective communication, high levels of transparency and visibility, and measurable performance metrics.
But often what motivates a shift toward integration are the challenges. Here are some of the most common problems that plague supply chains:
- Order changes and cancellations
- Unavailable workers
- Mechanical or software problems at production facilities
- Late delivery of materials
- Conflicting supplier obligations
- Transactional or adversarial relationships
- Limited communications
Key elements for supply chain integration
There are many ways to integrate your supply chain, but keeping several key principles in mind will keep you on track.
- Put the customer first, so every collective decision can work toward that end goal.
- Get buy-in from upper management so that setbacks along the way don’t damage the partnership and the big picture.
- Centralize the whole process, so all partners have equal access to information.
- Link the mindset and goals of all partners, not just ERP and technology. Make sure the partners agree on the same metrics and objectives.
- Give the work to whoever performs best in order to strengthen the chain. And make sure activities are only performed once throughout the supply chain.
- Build relationships and rapport among partners to cultivate trust and generate the best ideas.
Benefits of supply chain integration
In an ideal scenario, every link in the chain benefits:
- A better understanding of your customers and a better ability to serve them.
- More cost effective and efficient operations, with increased ROI and profit margins.
- Reduce wasted material and time, reduced redundancy in supplier functions.
- Ability to keep up with demand and be more flexible to changing markets.
- Less risk and a better ability to be competitive
- Better opportunity for investment when operating with collective power.
- Get early warnings for problems with information sharing
We want to work more closely with you. Cole’s consulting team is primed and ready to analyze your operation to help you streamline your supply chain and move you closer to your goals.
Information provided by: Trade Consulting Dept. - Cole International
Supply chain management. It’s what we do.