Integration in Global Supply Chains

Abstract

Supply chain management (SCM) demands a holistic view of the functions and processes required to bring a product or service to market. It assumes that optimization of subsystems does not necessarily lead to global optimization and that the supply chain should be strategically managed as a single entity in order to effectively and efficiently deliver the desired results. SCM requires supply chain integration, both internal integration (for example, across functions) and integration with suppliers, customers, and/or other concerned channel members. The key recurring themes characterizing integration research as applied to business processes concern connectivity and simplification. Connectivity implies seamless linkages (internally or externally) and encompasses coordination, collaboration, cooperation, and interaction. Simplification is the common manifestation of system optimization. The most important specific mechanisms for achieving integration are teams (or integration via human interaction) and IT (or information integration); these two are central to the evolution of knowledge integration into a collaborative “culture” of joint decision-making and knowledge management. The literature suggests that integration in a supply chain and firm performance are positively linked. Although a lot of research in a variety of research domains has addressed cross-functional teams or IT (internal integration) and firm performance, less work has been done on the interaction of integration mechanisms or on the impact of integration mechanisms conditional on other factors, such as environmental turbulence. Furthermore, empirical research with a holistic supply chain orientation is in its infancy. For example, neither second tier suppliers and customers nor recyclers are typically considered. The chapter concludes by suggesting several avenues for future research in global supply chain integration.