Business Environment : Supply Chain Integration

3067 Words13 Pages
Student ID: 34068643 MSCI281

Introduction
To survive and being success in modern business environment, focusing on supply chain management has become one of the popular ways to increase competitiveness among organizations. According to Lambert and Cooper (2000, as cited in Flynn, Huo and Zhao, 2008), organization has started to rethink the importance of cooperative, mutually, and beneficial supply chain partnerships due to the fierce competition among organization nowadays. In order to increase the efficiency and effectiveness, outsourcing has been commonly used among business, which means companies will allocate part of their production process to a third-party logistics and fourth party logistics (3PL&4PL) rather than finishing the
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Referring to Flynn, Huo and Zhao (2008) research, they suggested supply chain integration is the process of organizations strategically collaborates with their supply chain partners and managing inter and intra organization?s processes. In addition, Prabir K. Bagchi and others (2005), claimed that ?supply chain integration is the comprehensive collaboration among supply chain network members in strategic, tactical and operational decision-making?. (Prabir L. Bagchi et al.) By reviewing these definitions, supply chain integration can be known as the collaboration of the organization and their supply chain partners by using strategic, tactical and operational management. The main purpose of applying supply chain integration is to have an efficient and effective production process of products in different, aspects, such as cost, information, and decision-making (Bowersox et al., 1999; Frohlich and Westbrook, 2001; Naylor et al., 1999 as cited in Flynn, Huo and Zhao, 2008) and aim to improve service capabilities at lower supply chain cost. (Ragatz et al, 1997, as cited in Fylnn, Huo and Zhao, 2008) Based on their papers, it suggested that firms with highly supply chain integration can be more reactive to unstable demand by higher information visibility and knowledge between organisations. Also, it also pointed out that the net costs can also be reduced through interlocking the supply chain.

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