Top 5 benefits of an integrated supply chain

(Original post from September 2016 updated in August 2020)

Every company needs four key components in their business in order to be as effective as possible and to generate revenue. Strategic product innovations, streamlined transportation systems, a resilient supply chain and agile financial and operational planning are all required in order to create the most value within an organization’s operations, no matter the industry. Now more than ever, in an environment that is constantly changing and influenced by economic uncertainty, it’s no longer enough to have a wellfunctioning logistics organization, supply chain, product design process or financial plan. To achieve real agility and enable innovation, you need all these things working together.  

Let’s take a look at some of the most important advantages to having an integrated supply chain: 

1. Increased collaboration and visibility

In an integrated supply chain, it is important to link together as many areas as possible to enable strong collaboration with the end goal of reducing costs, waste, production time and response time. Rather than allow different enterprise functions to operate separately, an integrated supply chain promotes centralization to ensure enterprise-wide visibility. According to a poll of Oracle customers, 82% were able to increase their on-time delivery by collaborating across the organization to optimize designs for new products to streamline supply, manufacturing and operations. The same poll found that businesses who used cloud applications to increase visibility from buyers to suppliers – found a 35% increase in customer satisfaction. Without this visibility, when disruptions occur it is difficult to react and pivot in order to optimize business processes. By aligning and integrating your supply chain, you can move from having your teams work at cross-purposes to seamlessly sharing information for an increase in cross-operational visibility and collaboration. 

2. Stay on top of demand

Directly related to increased visibility is the increased ability to stay on top of demand with an integrated supply chain. Without the line of sight an integrated supply chain provides, it would be virtually impossible to balance supply and demand. With integrated logistics, supply chain, product innovation and financial strategies, companies are better positioned to predict demand and act accordingly. Today’s increasingly global supply chain needs to be able to spin on a dime and accommodate shorter product life cycles, emerging markets and fluctuating economies. Marrying innovation with logistics, finance and effective supply chain management is one way to make sure businesses are adequately responding to changes in demand. 

3. Flexibility

One of the most important benefits of an integrated supply chain is increased flexibility. Houston Chronicle contributor Chirantan Basu noted that by  integrating all of a business’s functions, flexibility can be achieved. “Tight supply chain integration gives management operational flexibility to respond rapidly to external events, such as the actions of competitors and changes in customer demand,” Basu wrote. “Companies can gather intelligence through their supply chains, which allows them to be generally aware of what their competitors are planning months in advance.” In addition, according to SupplyChainBrain, supply chains with a flexible approach have found the best way to manage cash flow without missing out on opportunities to grow the business.”  

Supply chain data serves several key purposes.Supply chain data serves several key purposes.

4. Eliminate waste

Maintaining a sustainable supply chain isn’t easy. Supply chain management professor and Inbound Logistics contributor Paul A. Myerson noted that  lean practices help identify  and eliminate waste in the supply chain, and increased agility allows organizations to respond effectively to unpredictability. He found that a combination of agile and lean supply chain practices is the often best option. Integrating data from across operations is the best way to ensure that the supply chain is sustainable and successful in the long term. 

5. Higher profit margins

The previous four benefits roll up into this one: When the supply chain is a well-oiled machine, it’s easier for companies to maintain and even increase their revenue, resulting in higher profit margins. Effectively managing an innovative, collaborative supply chain – through the use of  cloud-based SCM, Logistics, EPM and PLM solutions – can help businesses produce and deliver products at a much faster, more successful rate, and thus attain that higher profit margin. 

It’s clear that maintaining an integrated supply chain is critical to business success. However, integrating these disparate concepts is sometimes much easier said than done. According to a McKinsey report, large IT projects usually  run 45 percent over budget  and 7 percent over time. What’s more, they only deliver 56 percent of the value expected at the beginning of the project. You can ensure your company gains these tangible benefits of an integrated supply chain by taking a few steps back and gaining a clear understanding of your business goals.  

Just as important as setting up clear expectations, is selecting a digital platform that connects all links to your supply chain and integrates with your other technologies. To this end, working with a successful integrated supply chain partner like Inspirage is more than just hiring someone to complete an IT project; our expertise can make a difference when you’re integrating your supply chain processes. For more information about how to build an integrated supply chain in order to improve business processes and help you transform your operations,  get in touch with the experts  at Inspirage today. 


Mo Khurana | Key Contributor

Mo Khurana is the leader of our global Management Consulting practice. At Inspirage, Mo helps our clients with transformational challenges and opportunities and has built and developed our Management practice that specializes in: Business Process Management, Organizational Change Management, Strategic Advisory Services and Education & Training.