Running a business in today’s highly charged economic environment can sometimes leave you feeling overwhelmed. To keep each aspect of your business moving in the right direction and maintain a competitive advantage, you cannot focus on any single element. You have to multitask and maintain a watchful eye on the entirety of your operation, so nothing goes off kilter.

Successful supply chain management is one of the key components of a modern, thriving business. With the supply chain composed of numerous processes, contributors, and distributors to produce a single commodity, complications in one area can have a ripple effect that winds up crashing your systems and crippling your output. In short, productive supply chain management requires ongoing collaboration with supply chain partners working synergistically. This can be accomplished through supply chain integration.

Here, we will discuss the meaning of supply chain integration, how it is achieved, and the array of advantages that emanate from a fully integrated supply chain.

What is supply chain integration?

Supply chain integration refers to the sharing of information among supply chain partners in the lifecycle of a product, from inception to endpoint. If done correctly and with the appropriate technology, supply chain integration allows contributors throughout the entire supply chain to access the same up-to-date information. That helps improve coordination, advance learning, achieve alignment, and increase overall supply chain visibility among all of your supply chain members. An integrated supply chain also makes it easier for supply chain management partners to share up-to-date information regarding a product’s development, deployment, or delivery.

But, as with life, the manufacture or delivery of a product does not always go according to plan. Circumstances arise that can compromise a commodity’s delivery to its end user in a timely fashion. The suddenness of the pandemic and resulting outbreak, for example, combined with the attempts to slow its transmission through mandatory lockdowns, led to massive supply chain bottlenecks for business owners of all sizes. In a poll done in March 2022 by the National Federation of Independent Business, more than half (51%) of respondents said supply chain disruptions had “significantly” compromised their organization’s overall performance.

Supply chain integration opens the lines of communication, so everyone is on the same page regarding the status of the product and is up to date on what comes next. In doing so, integrated supply chain management allows organizations to:

• Reduce waste (both in time and materials),
• Minimize downtime,
• Shorten product lifecycles, and
• Cut costs
• Improve end customer experience and satisfaction.

 

 

Supply chain integration and the Oracle Cloud

Supply chain integration does not necessarily have to involve technology. It can also be achieved through strategic business decisions — such as partnering with another supply chain partner —  that can reduce the links in the supply chain continuum. Or it could entail controlling more levers of the supply chain by building departments or processes internally that control materials management, order fulfillment, or inventory management.

However, taking on more roles can be a major investment, which is why organizations that seek to improve supply chain performance often take the more affordable and dependable route — utilizing enterprise resource planning (ERP) software from a reliable cloud or supply chain management services provider. Collaboration is easier and visibility is enhanced when supply chain partners are integrated within a centralized system.

A classic example is a global electronic components manufacturer that brought in Inspirage to revamp and revitalize its existing ERP system and implement a cloud solution. As the company’s principal decision-makers informed us at the time, stakeholders had encountered a host of challenges that were indicative of an underperforming supply chain, such as orders arriving later than expected. Poor demand forecasting with the client’s legacy system led to numerous inventory issues that were adversely affecting the company’s bottom line.

In light of these and other challenges that were compromising the client’s supply chain operations, the manufacturer moved to a cloud-based Oracle ERP solution. Through fully configurable applications like Constrained Supply Planning Cloud, Global Order Promising Cloud, and Backlog Management Cloud, the client has since streamlined its supply chain and achieved more comprehensive supply chain management. By improving ship date accuracy, reducing manual expedites and capacity adjustments, and enabling automatic pull-ins of sales orders according to business priorities, the company was able to enhance supply chain visibility — a core benefit of supply chain integration.

 

Advantages of an integrated supply chain

Above all else, an integrated supply chain makes effective supply chain management easier by providing your team with more control and dexterity over all of the processes that are involved in manufacturing or distributing a product. We have briefly referenced some of the benefits that flow from supply chain integration, including better collaboration and visibility. But there are many others, including:

Better demand planning

It is said that the best predictor of future behavior is past behavior. This axiom applies to consumer buying behaviors in particular, as people tend to be creatures of habit. But demand planning can easily go awry, as stationary bike manufacturer Peloton learned. During the pandemic, when millions of people were working out at home because their gyms were closed, Peloton was overwhelmed with so many orders for its internet-enabled spinning bicycles that it could not keep up with demand. As a result, the bikes were back ordered for several months.

Aiming to enhance production so customers could get their orders faster, Peloton invested millions of dollars toward increasing capacity, which in part involved acquiring one of its major manufacturers. But when the lockdown lifted, demand for their products fell precipitously, as many Americans got back to their routines at local health clubs and fitness centers. Peloton’s miscalculation prevented the company from making back what it spent on capacity building. Once a $50 billion company, by 2022 Peloton had become a shell of its former self, worth around $8 billion, according to CNBC.

Miscalculating demand can lead to costly consequences. With integrated product development, manufacturing, and logistics processes, businesses can stay on top of supply and demand by identifying and adjusting to changes as they happen. The visibility enabled by supply chain integration makes this possible.

Added flexibility

A good rule of thumb in business, as in life, is to expect the unexpected. Success in dealing with the unforeseen is largely determined by how you respond to challenging circumstances. An integrated supply chain provides your business with the additional runway you need to pivot your processes when events call for a different approach.

Whether you are confronted with demand planning uncertainties, the need to improve a new product when a competitor releases one of its own or a once-in-a-lifetime pandemic that forces you to find a new supplier, supply chain integration can provide your business with operational flexibility that is not available to organizations with decentralized supply chains. Before the pandemic, many supply chain management practitioners believed it made more sense to use just one supplier. But the recent past has demonstrated that relying on just one supplier is rife with risk should something happen that prevents them from conducting business as usual. Supply chain integration fosters flexibility, and flexibility fosters collaboration.

Higher earning potential

Think about all the money that you spend on production costs, including supplies, labor, partnerships, insurance, overhead, and other expenses. Then consider the loss associated with dips in productivity. When a disorganized supply chain creates a lack of communication between your suppliers and your team, you are unable to produce at the same rate. On the other hand, fewer miscues and misadventures lead to more revenue, enhanced productivity, time saved, and less money spent wastefully.

While supply chain integration makes supply chain operations easier, the integration process itself takes work. That is where Inspirage can help. We set ourselves apart from other providers because we have industry expertise in aligning supply chains for a variety of verticals and fields, from manufacturing to health care, life sciences, high tech, and more. We understand your industry-specific challenges and can help you turn those challenges into opportunities for growth by improving supply chain performance — and helping your business become a supply chain leader.

Contact us today to learn more about our solutions and what makes us a global leader in supply chain optimization.