ENTERPRISE APPLICATIONS: BUSINESS COMMUNICATIONS – SUPPLY CHAIN

MANAGEMENT
Reporter: Ms. Calderon and Ms. Gabriel

1. Why is supply chain integration important to organizations?

Integrated supply chain management refers to an enterprise resource planning approach to

supply chain management. A business facilitates relationships with all of its suppliers and
manages all distribution and logistics activities through a centralized system rather than
having multiple systems within the organization. Concentrated professional expertise and
cost efficiency are core benefits of the integrated supply chain process, but developing
collaboration is an obstacle.

Companies that have an integrated supply chain increase their flexibility to adjust to client
requests, competitors’ actions, and events within the industry. They also reduce waste and
lower costs. Overall, with an integrated supply chain they are gaining an advantage over the
competition and the whole business benefits.

The ability to be flexible and adapt to different situations is important in any competitive
industry. Having an integrated supply chain allows companies to do that much more quickly
and fluidly than would be possible with a traditional logistics model. One example of this
flexibility is just-in-time capability, in which just enough freight is used to meet daily
demand. This limits the amount of warehouse space used and helps keep costs down. While
very beneficial to a company’s costs and space, this method can be detrimental if the supply
chain isn’t effective or responsive enough, limiting inventory and creating delays and
ultimately costing more than the savings are worth.

Further, reducing or eliminating waste is a constant goal for most companies, partly for the
long-term cost savings, but also to meet increasingly numerous requirements for eco-
friendly manufacturing.

Integrating your supply chain will dramatically reduce waste in several areas. You will save
on space in warehousing due to better route management. This will also save on emissions
helping you to meet low-waste environmental goals. Trucks will be filled on every leg of the
route maximizing cube and ensuring that you don’t have empty trucks driving around. This
means that you will be more efficient and save money.
Lastly, being flexible and getting rid of waste will help to lower costs. There are other things
that can help such as the expertise of your team, the dependability of equipment and cost
sharing. Having a dedicated, knowledgeable team will increase productivity and improve
workflow. In addition, cost-sharing by using Supply Chain Management providers instead of
working independently is a great way to cut cost without losing any quality or deadline
requirements whatsoever. A fully integrated supply chain is a requisite strategy for
companies who wish to become or remain competitive.