What is supply chain integration – How Can Businesses Double Profits with Them

Companies of all sizes need to be able to deliver high-quality products or services to their customers at competitive prices. Only then can these businesses expect to see significant growth in their bottom-line profits. To achieve this objective, owners of these companies need to establish an elaborate supply chain with all their trading partners. By taking such a step, companies can get relevant real-time data from their suppliers. This information generally relates products which are available in suppliers’ inventory and present status of companies’ purchase orders. Moreover, the companies also get to know when the products are ready for shipment and other logistical details.

What is supply chain integration, and why do companies need it?

Experts say people outside the world of business and commerce have a vague idea of what is supply chain integration. These specialists explain supply chain integration is the establishment of an intricate communication channel between companies and their trading partners.  These businesses are able to accomplish this objective by installing and operating an elaborate network of integrated computer systems. The companies’ suppliers can then monitor incoming purchase orders from their buyers through their computer platforms. These businesses then provide real-time data on their inventory to allow companies to a decision on whether to placing orders. In the process, companies and trading partners can improve their business relationships.

The industry professionals point out the following two reasons why companies of all sizes opt for supply chain integration:

  1. Boost end-to-end visibility through the availability of real-time data: Companies of all sizes need to streamline their supply chain in order to improve their internal productivity. These businesses can achieve this objective by setting up intricate communication networks with their suppliers to enhance connectivity. Before companies can commence production, they need to determine the exact quantity of raw materials necessary to make their final products. Moreover, companies also need to know which of their suppliers can provide such raw materials in the shortest possible time. By opting for supply chain integration, companies can get the information they need in real-time from suppliers’ computer network. This helps to improve workflow between the businesses.
  1. Data centralization: Companies generally conduct their commercial operations with more than one supplier. These businesses have a very difficult time analyzing the incoming real-time data from their trading partners’ computer systems.  As a result, these companies often make the wrong decisions regarding the procurement of raw materials. This hampers their production activities and causes a lot of wastage. In the process, the companies end up increasing their production costs. Fortunately, this does not happen when companies opt for supply chain integration. It allows the companies to set up a centralized repository where they scrutinize incoming data from their trading partners.

When it comes to the question of what is supply chain integration – it does bring profits and returns on investment for the business. Supply chain integration helps companies of all sizes to improve connectivity and business relationship with their trading partners. In the process, companies can get real-time information from their suppliers regarding the availability of raw materials from a centralized data repository. By analyzing this information, companies can make important decisions on choosing the right supplier to place their purchase orders. This helps to boost productivity and efficiency. In the process, companies able to cater to the demands of their customers without any difficulty.