The document discusses the advantages and disadvantages of integrated supply chain management, which streamlines all processes from procurement to delivery. Advantages include increased revenue, controlled costs, enhanced quality control, and a competitive edge, while disadvantages encompass excessive regulation, needless complications, a lack of compliant suppliers, and vulnerability to system collapse. Successful management of these factors can lead to long-term benefits for a company.

1. Integrated Supply Chain
Advantages & Disadvantages
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Introduction
• Benefits of supply chain integration is a process
wherein every phase from procurement of raw
materials to production, quality control to
packaging, distribution or supply to eventual
delivery is streamlined and inseparable.
• It is a holistic collective of the various
processes, which may be under complete
control of one company or multiple
partners will come together to have
collective control over the integrated
process.

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• Integrated supply chain or supply chain
integration has several advantages
which is why most companies have
switched to
integrated supply chain management
However, there are some
disadvantages as well.
Advantages of Integrated Supply Chain

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Advantages Of Integrated
Supply Chain
Competitive Edge Quality Control Controlled Costs Increase in Revenue
Advantages of Integrated Supply Chain

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1: Increase in Revenue
Integrated supply chain
allows a company to focus
on assets that would allow
the organization to reap
more rewards.
There are always facets of
a business that will have a
more pronounced impact
on the revenues and
hence must be optimized
as much as possible.
Integrated supply chain
management allows
companies to prioritize
and focus on the
specialized assets that
would improve their
products, increase market
share or enhance
operating profits.
Advantages of Integrated Supply Chain

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2: Controlled Costs
In Integrated supply chain will always reduce costs, especially transactional
costs which are unavoidable for subsidiaries, partners, or vendors.
Having a centralized or integrated supply chain management, a company is
essentially doing away with frills that would have otherwise delayed the process
and would have also incurred needless costs.
Advantages of Integrated Supply Chain

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3: Quality Control
Supply chain integration helps in ensuring quality.
When there is a concerted attempt to keep a stringent compliance check, it is
immensely difficult to approve or pass along faulty products.
There is only one authority overseeing compliance throughout the process.
Advantages of Integrated Supply Chain

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4 # Competitive Edge
With financial advantages,
stricter compliance, and
better products, a
company will be able to
fight its competition.
And emerge as the
winner with
integrated supply
chain management
Advantages of Integrated Supply Chain

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Disadvantages Of Integrated
Supply Chain
Excessive
Regulation
Needless
Complications
Dearth of
Compliant
Vulnerable to
System Collapse
Disadvantages of Integrated Supply Chain

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1: Excessive Regulation
Integrating all suppliers will
pose challenges to a business
trying to manage every
internal and external supply.
Not every needs to comply
with every supplier regulation
or norm.
A company trying to have a
generic approach which will be
the case with integration
supply chain management will
needlessly compel all its
suppliers to adhere to the
same standards.
Disadvantages of Integrated Supply Chain

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2: Needless Complications
Integrated supply chain
management can easily
lead to a complicated
scenario where resources
are shared and
unnecessarily wasted.
Not every supplier needs
every system.
Every supplier and
department needs to
operate according to its
own strengths while
overcoming its witnesses.
Disadvantages of Integrated Supply Chain

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3: Dearth of Compliant Suppliers/Vendors
This can have an impact on the procurement and supply costs as those willing to
comply with the new norms may have a steeper rate.
There can be a shortage of suppliers or vendors that would choose not to renew
contracts if the terms of supply chain integration don’t suit their business priorities.
Disadvantages of Integrated Supply Chain

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4: Vulnerable to System Collapse
An integrated supply chain means one error some
where can bring the whole system down
There can be a collapse in the checks and balances if there is any lapse in the
inspections or compliance checks.
Disadvantages of Integrated Supply Chain

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TO CONCLUDE
• It eventually boils down to how a
company manages to extract the benefits
and overcome the challenges or avert
the complications.
• Should supply chain integration be
effective and efficient, a company can
reap long-term multifaceted rewards.

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Students at AIMS develop these and
many other SCM and logistics skills,
during their studies of
Master's in supply chain management o
nline
and
supply chain management certification
online