Overall, with an integrated supply chain, companies gain more of a customer service focus. They also reduce waste and become faster and more flexible, while maintaining the highest of quality standards. They are gaining advantage against their competition, and keep competing to stay in that position.
Disadvantages of Integrated supply chains
The business will need to worry about the product getting to stores safely or on time, relying heavily on the supplier or unforeseen situations.
There can be unforeseen situations. An example is Waitrose, Waitrose will use local farmers and if there were to be a storm the roads could become blocked meaning they wouldn’t be able to get the stock needed for their stores due to the fact they cannot reach their small amount of suppliers they get their products from. This will lead to unsatisfied customers having to look for alternatives elsewhere meaning a decrease in profit for Waitrose.
Adding to this, with many companies that deliver their products across distances they will have to worry about security. Waitrose can sell some expensive products such as high-end quality alcohol. This could lead to people wanting to steal this products to sell on to make money meaning Waitrose will make a huge loss.
Non-integrated supply chains
Non-integrated companies have disconnected flow of product and information, limited ability to react to customer requests, unpredictable product delivery rate, limited visibility on shipment information and performance based on functional activities.
Advantages to Non-integrated supply chains
1. Full control, not having to rely on others to supply products.
2. The companies have their own teams to manufacture, supply, deliver to end consumer.
Disadvantages of Non- integrated supply chains
1. Paying out for more e.g. machinery, raw materials, which would mean they are maximizing their cost, which could result to decrease in profit.
2. Paying for more than the company needs. A company could buy too much when not needed as leading to products going to waste.
Overall for most retailers integrated supply chains will benefit them the most, however big companies who can afford to spend more money (e.g. Selfridges) will benefit from Non-integrated supply chains.