Supply Chain Management: Competing Through Integration

  • Stanley E. Fawcett

Abstract

The primary objective of supply chain management is the elimination of barriers that inhibit communication and cooperation among different members of the entire supply chain. To eliminate these interorganizational barriers, managers must understand and manage the flow of goods and information from the initial source of raw materials all the way to the final customer. The terminology commonly used to describe supply chain management is, “the management of the value-added process from the suppliers’ supplier to the customers' customer.” Given the difficulties that most firms encounter in their efforts to mitigate the adverse effects of functional barriers that are entirely within the firm, the challenge of supply chain integration is daunting. To achieve synergies among supply chain members companies must find answers to many questions, including:
  • Why should I be concerned about how somebody else does business?

  • Can we really trust the supply chain members not to take advantage of us?

  • How is our role going to change in the new, integrated supply chain environment?

  • Who are the best partners to align our competitive efforts with?

  • How many different supply chains can we work with effectively?

Most firms initially lack the answers to these questions, and struggle with the very notion of supply chain management (Elliff, 1996). Many view supply chain integration as a serious threat to independence. Some even view supply chain management as the latest effort of larger companies in the supply chain to squeeze smaller firms’ contribution margin and autonomy than before. Despite these serious reservations, and the many unanswered questions, today's changing competitive environment has left most managers feeling that they have no other legitimate options than to participate in integrated supply chain management programs. The fact that key customers request participation while serious competitors are willing to enter into such integrated channel alliances provides strong motivation for adopting a supply chain management perspective. Besides, the competitive improvements that emerge from well-designed and carefully executed supply chain integration are attractive, and create considerable motivation in their own right. The practices of the following companies are mentioned here: Home Depot; Proctor and Gamble; Toys-R-Us; Wal-Mart.

Keywords

Transportation Mold Marketing Assure 

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Copyright information

© Springer Science+Business Media New York 2000

Authors and Affiliations

  • Stanley E. Fawcett
    • 1
  1. 1.Brigham Young UniversityProvoUSA

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