Integration enables two services to connect to improve the efficiency of the business; it combines parts of the supply chain to help to get goods onto the shop floor quickly.
The advantages of integration are that it can lower costs; rather than paying out for two different delivery companies you only pay for one and they deliver everything together at the same time. Integration reduces waste in the way that if you have ordered two things from two different companies, to save on packaging you can put both items in the same box and this reduces waste.
There are also some disadvantages; some companies do not want to share customers so they won’t agree to integrating and sometimes you want to integrate with companies in a different country. This can be difficult if the business you want to integrate with doesn’t speak your language.
To integrate you need advanced technology within the business and a supply chain management team to arrange and watch over everything.
The advantages of not integrating are that the process of the supply chain is easy to manage, and there is no need for an advance in technology within the company.
The disadvantages for non-integration are that there is less communication between each part of the supply chain and that the garments reach the market much slower which is not good if the company is looking to bring in new trends as the trend may have gone by the time the garments get on the shop floor.
The aims of integration are to be agile – be able to respond quickly to changes, to be adaptable – change depending on things happening in the country for example, now that we have an ageing population do we need to introduce more elderly clothing ranges? And to be aligned – having a benefit in the process for all the companies involved.
For example, DHL, a delivery company, has integrated with WH Smiths to provide a fast, more efficient delivery service to keep up with competition from the likes of Amazon who sell products, delivering them rather than having a shop.
Topshop and CollectPlus have integrated to give customers a fast delivery service. CollectPlus have also integrated with ASOS and Very.
Small companies will find it hard to integrate because they don’t have the funds, and may not have the capabilities within their company to fulfil the needs of a large company.
Personnel integration helps the staff to know how other staff work and helps the departments to work together to increase efficiency. Integrating employees means training employees to do other employees jobs in case someone is off sick, someone else can step in and all is not lost.
Vertical integration is when the company owns one or more parts of the supply chain. Having control of the manufacturing and assembly of products but leaving sales and distribution to others is known as backward integration. Leaving the manufacturing to others but having control of the assembly and the distribution to the end use is known as forward integration. The advantage to vertical integration is that the company has control over quality and costs at the most important part of the production.
Data integration happens when companies bring in new systems to replace the old ones and integrate their computer networks when the companies merge.
Integration