What you need to know from head to toe!
Integrated supply chains
First, an explanation about what an
integrated supply chain is, it is when a business would have a close alignment of the supply chain. For example, where the product is designed manufactured,transported and sold under the control of one company, e.g. Coca Cola. A classic beverage with a modern supply chain.
Advantages of using an integrated supply chain would be a raised output, meaning that the business would be able to meet the demand from the consumers for the product compared
to a non-integrated supply chain business. If the demand was high having a raised output would mean that the business could meet this demand and raise profits. Also by having an integrated supply chain it reduces delays in processing, therefore consumers won't have to take their business elsewhere and customer base will not decrease.
In addition to this it could raise profits for the business, for example if a computer company bought a company which creates circuit boards. They could then sell those circuit boards to another company also resulting in a raised profit, by selling through other channels to receive more revenue.
However for an integrated supply chain
companies don't necessarily have to buy the company
who supplies to them. They could create an 'exclusive contract' which would mean that the company who provides agrees to deliver ‘x’ amount of products for 'x' amount of money set for a number of times a year. This is reliable and saves costs for the business meaning they don't have to buy a whole company.
A company which uses an integrated supply chain reduces risks of not meeting customer demands quick enough, it reduces the risks of incomplete products.