Advantages And Disadvantages Of Supply Chain
(iii) Integrated Supply Chain System: Advantages and Disadvantages
An integrated supply chain consists of integrating the different parts of the supply chain, from the sourcing to the logistics; in an orderly, and timely manner at a relatively low price that fulfills the customer’s needs (Ahmed and Shepherd, 2011).
Nowadays, managers across the world believe an integrated supply chain system, along with the new technologies, will provide an added value to the final product and therefore a competitive advantage to companies (Mentzer, J, 2000).
Albeit its ability to offer a better final product, the integrated supply chain system has its advantages and disadvantages.
With an integrated supply chain, managers have better control not only of their inventories, but also of each single product. This helps companies offer a better, more complete service to their customers.
Furthermore, the broader view of products that an integrated supply chain can give to the company, can lead to a better control of them (Lee & Billington, …show more content…
The tracking of products with the help of IT technologies such as RFID will help the companies to respond to the customers’ need of information (Ahmed & Shepherd, 2011).
With an integrated supply chain system, the customer gets the information he asks for and a more personal approach to their enquiries.
Stronger relationships across the chain
By integrating the supply chain, the company builds stronger relationships with every participant of the chain. This nurturing of the relationship can create loyalty across the chain, which can additionally lead to lower prices or promotions (Spekman, Kamauff, Myhr, 1998).
If a firm develops an integrated supply chain system, it will place the company in a higher position than competitors. Offering flexible solutions with a reduction of costs, an integrated supply chain model is an investment for further growth of the company and customers’ loyalty (Mentzer, J. T., 2007).
Interact and support innovative frameworks
An integrated supply chain is a factor for the delivery of innovation to the hands of the consumer. By delivering an extended product, the consumer gets innovation as he demands it (Ahmed & Shepherd,