However, in some cases integration can be rejected. Integrating supply chains is a difficult process and requires a high amount of dedication, motivation, flexibility and attention; some brands may not feel confident enough to take on this challenge and would rather not take a risk.
The businesses which usually reject integration are often small and independent businesses- integration can be costly especially if the company wants to use high technology to improve their chain.
Technology is also expensive to maintain and repair therefore an independent business may struggle with funding the necessities. As for external non-integration, companies may not feel confident in sharing data and goals with other companies as this might make them vulnerable to competitors and may induce risks. Another reason why a business may reject is that the length of the trend may beat the time taken to integrate therefore profit may be likely to be lost because the brand will not be selling what they should be.
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American Apparel uses a completely integrated supply chain and they claim to obtain a high level of flexibility and a faster turnaround time than most competitors in the market. They do not depend on outsourcing and all their processes are carried out in-house.
Lastly, a manufacturer may become dependent on a specific brand which may result in fraud or could have a negative impact on the manufacturer economically if the brand’s sales decrease for any reason or the brand declares bankruptcy.
In conclusion, non-integration is more suitable for small and independent businesses as they may not have the right business tools and strategic knowledge to integrate their supply chain and to maintain its efficiency.
American Apparel
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