Integration in Supply Chain Management

Abstract

In today’s competitive and fast-moving business environment, the viability of organizations depends on integrating with other supply chain members so their complementary skills and compatible goals help them survive and prosper. Therefore, firms link their internal process to external suppliers and customers, with different levels of integration, to reduce cost and improve responsiveness and service level. The aim of this chapter is to study integration as a main component of supply chain management discipline in achieving competitive advantage and performance improvements. The authors begin with reviewing sourcing decisions that stress firms’ benefits in establishing long-term relationships with higher level of integration. Different types and levels of integration are defined, and a basic integrated supply chain model is studied to help in understanding the meaning and aspects of this term. Finally, the partnership development process including partner selection, contracting, and maintenance, along with various aspects of each phase, is reviewed.