Companies can also reduce the geographical distance with the suppliers to improve responsiveness and flexibility, for example it would be easier for an English company to contact a supplier that is also based in England rather than a supplier based in China as there will not be problems such as time differences or connection issues.
They need to be able to work as one unit, trusting each other and sharing information for external integration to work.
Integration is beneficial to companies because it improves efficiency across the supply chain. It can lower costs and reduce waste, therefore increasing profits. Integration improves the speed to market so companies can stay ahead of their competitors and increase their market position. It reduces stock holding so there is a reduced risk of markdown. Companies can adjust to advances in technology and adapt for future long term stability.
An example of external integration is where DHL and WH Smith have partnered together to provide a service. DHL is a parcel service which is available within some WH Smith branches. This provides an alternative to the Post Office and therefore brings welcome custom to WH Smith. This is a good example of an integrated partnership because both parties are benefitting from it and it improves both businesses.