7 basic principles for achieving complete supply chain integration

Supply Chain IntegrationOnce upon a time gaining a sustainable competitive business advantage was simply about attaining the lowest possible purchase price. We’ve come a million miles since then; in fact, we are in an entirely different universe altogether; a universe where gaining sustainable advantage through supply chain integration is all about acquiring a total, lean operation throughout the entire supply chain. Important factors to consider are now not only how quickly we can get products to market, but how quickly we can flex with moving demand and changes in circumstances.

Unique supply chain integration

No two supply chains are identical. Every business has its own individual considerations and circumstances, and good supply chain integration is all about taking all of those various elements into consideration and building the supply chain around them. In other words, there is no magic formula. There are however certain basic principles involved, and we’re going to be looking at seven of them right now.

1st Principle – Having a clear goal

It’s important to understand and have a clear vision of how total supply chain integration should be brought about. The managers of the supply chain must be fully committed to ensuring that in addition to obtaining cooperation from all internal stakeholders, the full and extensive cooperation of all external partners within the supply chain must also be achieved, and should be based on trust, responsibility, and mutual value.

2nd Principle – Maintaining the full-backing of the board and senior management

Unfortunately, many company directors and senior managers allow for supply chain integration to be put on the back burner. They lose sight of the end goal (the importance of which is noted in the first principle above), and fail to make the continuous adjustments that are needed to maintain impetus. Commitment and intention must be maintained throughout.

3rd Principle – A sense for urgency to change

As well as being committed to the philosophy to accept and promote change, there must also be a sense of urgency. This will ensure that constant change is brought about as and when needs must. To be truly effective, supply chains must not only be reactive to the changing environment, but proactive too, in order to stave off any disruptions.

4th Principle – Sharing Information with partners

It’s not enough to simply manage and progress placed purchase orders or contracts through the supply chain. To get the maximum benefit from supply chain integration businesses must be prepared to share information. The more transparent you are with your supply chain partners, the more they can manage their own businesses and contribute towards a more reactive and disruption free supply pipeline.

5th Principle – Sharing the benefits

It’s important that the benefits of any supply chain are felt by all supply chain partners, not just the supply chain creator and manager. By making sure that the benefits are shared throughout the supply chain, it incentives all others, and they will more willingly accept responsibility for sharing information, and will ensure that they contribute to transparency throughout the supply chain. This in turn facilitates delivery of supply chain goals. It is an important part of the supply chain integration process.

6th Principle – Follow the leader

Constructing a supply chain and getting all of your partners fully on board is never an easy process. It has to be done step by step. But you can make your own life easier by starting with your bigger suppliers. Concentrate on the 20% or so that generates around 80% of the purchasing action. By getting these partners on board and sharing your requirements with them, they can play an active part in meeting your budget requirements, helping you to reduce your buffer stocks, and can make good example for other smaller partners to follow.

7th Principle – Supply chain integration in the cloud

Supply chain management software is now available in the cloud (SaaS). Properly used it can accelerate complete supply chain integration. Software can be readily purchased in standard off-the-shelf packages, although most supply chains of any substance will require some degree of customization. Choosing the right platform, and the right IT experts to work with, will be one of the critical factors in any supply chain integration process.

What in your opinion, and why, is the best cloud based SaaS to facilitate total supply chain integration? 


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