Top 4 benefits of an integrated supply chain

Every supply chain needs three key components in order to be as effective as possible and to generate revenue: functioning logistics, supply chain and product innovation strategies are all required in order to create the most value within an organization’s operations, no matter the industry. It’s no longer enough to have a well functioning logistics organization, supply chain, or product design process. 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. Stay on top of demand

With integrated logistics, supply chain and product innovation 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 and effective supply chain management is one way to make sure businesses are adequately responding to changes in demand.

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

 

2. 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.”

3. 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. So a combination of agile and lean supply chain practices is the 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.

4. Higher profit margins

The previous three benefits lead 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 product and portfolio management software and SCM 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. 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

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.