Supply Chain Integration Enhances Efficiency & Maximizes Revenue

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The global marketplace is bigger than ever. As a result, supply chains have become increasingly complicated — and, at times, fragmented. When large portions of the supply chain become obscured by their own complexities, the impact can be devastating for companies in terms of costs, product life cycles, and response times.

To prevent the damage that often results from fragmented supply chains, many businesses are now turning to integrated supply chain management techniques.

What Is an Integrated Supply Chain?

Building an integrated supply chain involves strategically developing extensive supplier relationships and connecting as many links as possible within a network. Ideally, every phase of the procurement and logistics processes should be streamlined into one master operation, from raw materials to final delivery.

Not only does this network of relationships allow manufacturers to follow the paths of materials and components as they are navigated through the various twists and turns of the supply chain, it also gives companies a higher degree of control and flexibility when things don’t go as planned.

How an Integrated Supply Chain Model Can Benefit Your Business

Full supply chain integration requires the collaborative efforts of procurement, sales, engineering, and logistic representatives, but having C-level executives at the helm, overseeing the process, is crucial.

To get suppliers on board with supply chain integration, buyers must demonstrate that it is in the suppliers’ best interests to do so. When done correctly, integrated supply chains can be advantageous for every link within the network. Key benefits include reduced transactional costs, enhanced quality control, and increased revenue.

When the network performs as a cohesive unit, every aspect of the supply chain — from the acquisition of raw materials and components to inventory and storage, shipping and logistics, and value-added support — is simplified, cutting down on unnecessary, repetitive efforts and costs. As these areas of inefficiency are eliminated, companies are better able to increase their level of service while also focusing on capital-generating improvements and assets.

By freeing up time and resources, companies can then offer shorter lead times to customers, and more quickly identify problems and risks within the supply chain process — ultimately leading to better pricing options and improved customer relations.

Integrating the supply chain also boosts overall transparency and traceability, which is becoming increasingly important for today’s discerning consumers. More than ever before, consumers and businesses alike are more aware of the various environmental and social issues that have remained hidden by segmented supply chain practices; integrated supply chains open up the lines of communication between suppliers and companies, empowering businesses to exert greater control over the process and ensure the integrity of their supply chain practices.

Using Technology to Enhance Your Integrated Supply Chain

Thanks to the digital revolution and the advances brought about by supply chain 4.0, there is a wide range of tools available to help companies create or enhance their integrated supply chains.

  1. Robotic Process Automation and Enterprise Resource Planning Systems — These automated tools put software bots in charge of monotonous, routine back-office tasks such as data entry, inventory monitoring, and order processing. Not only do these tools remove the possibility of human error, they can also run 24/7 and monitor a wide range of tasks in real time. This, in turn, frees up employees to focus on more pressing tasks, enhancing overall productivity.
  2. Blockchain Technologies — Many have heralded blockchain technology as the answer to a range of supply chain challenges. Because the crypto-ledger keeps an accurate record of all transactions, companies can easily bring about increased traceability and enhanced communication.
  3. Artificial Intelligence — Through smart sensor technologies combined with robotics and the Industrial Internet of Things (IIoT), artificial intelligence (AI) can gather data across an entire supply chain, monitoring everything from weather patterns to shipments. Ultimately, this allows for enhanced agility, traceability, and supplier communications.
  4. Data Twins — Data allows companies to gain a better understanding of their internal processes as well as their external supply chain practices, allowing for the development of well-defined goals and actionable plans. Digital twins, which essentially act as experimental clones of a company’s data systems, allow businesses to plan ahead, mitigate risks, and optimize supplier partnerships for greater synchronicity.

The Case for Supply Chain Integration

Companies taking the time to integrate their supply chains stand to benefit greatly, maximizing both efficiency and profits by improving relationships between every link in the supply chain, enhancing traceability, and strengthening quality control.

 

Image credit: Wright Studio / Shutterstock.com

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