Advantages of Integration
There are many advantages of Integration within the supply chain, one of them is that it is easier negotiation with suppliers, it allows an efficient relationship to be formed between suppliers meaning that negotiation and contact is well-organised. It also allows space for adaptations and adjustments such as in technology, this is very important as technology advances very quickly with little notification. Integration also means that staff have a main focus such as strategic goals and tactics that could better the current performance. As everything is integrated this sets the company up for the future creating a long term stable environment between each section of the company. Also cross brand coordination is involved, this means that a group of people with different expertise working towards one goal. When integration is introduced the efficiency across the whole chain improves as everyone is working together in unity. Consequently, this means that the product can reach the market as quick as possible, have a flexible approach and the company can stay ahead of competition adjusting to the customers demand.
Disadvantages of Integration
When the supply chain is not integrated, a large amount of time money and resources is used and spent to make sure the supply chain runs efficiently. Often, the products have to be manufactured in LDC's reducing the amount of labour costs. This an mean that employees in foreign countries are forced to work in sweat shops with little wage and human rights creating a bad appearance to the media. When considering integration, it is important that companies are willing to cooperate, work together and do everything they can to benefit the group. Working styles, goals and targets must be similar between all companies involved to ensure the end goal is the same. Power must also be equally divided throughout the chain so the business benefits from integrating and there is no disagreements. Training needs to be the same across all aspects of the supply chain, this could mean that time needs to be taken out of daily operations in order to be successful in the integrated supply chain. New data systems are also needed at a high cost. The manufacturer is reliant on one source of business and has to adapt to new way of working and embrace the changes put in place.
Advantages of Non-Integration
Non-Integration is the Cheaper, more cost effective option. It may be argued that the non-integration is easier to manage as you don't need to worry about making sure information is constantly updated. The manufacturer is not relying on one source of income instead they would probably rely on several. Technology is very expensive but with non-integration there is no need to new technology instalments all old equipment is fit to use.
Disadvantages of Non-Integration
There is Less communication between supply chain stages meaning that they are not always as effective as an Integrated supply chain. Usually, clothes reach the market slower so other retailers are always a step ahead and possibly benefiting more and making more profit. A non-integrated chain is less flexible meaning that they cannot adjust to the customers demand quickly.
Agility Adaptability Alignment