Barriers to Supply Chain Integration

Strategic supply chain integration has helped companies realize significant benefits in business performance and customer satisfaction. The collaborative strategy brings many aspects of a business operation into a closer working relationship, ensuring that, as a team, partners are improving response and production timelines. The modernized supply chain integration process also ensures that companies have the insights needed to reduce costs and minimize waste.

As supply chains have become increasingly complex in recent decades, especially with the global sourcing of raw materials and products, companies are leveraging technology to overcome barriers to supply chain integration.

What is supply chain integration? And what are the barriers to supply chain integration?

At its essence, a successful model of supply chain integration is when all the parties involved with the fulfillment of a product are integrated into a single system. Logistics companies use supply chain integrations to create seamless integrations with customers, vendors, partners, and internal systems.

Some barriers to supply chain integration include a lack of information technology, lack of information sharing, system incompatibility, and lack of trust.

With innovative integrated supply chain solutions, companies are realizing numerous benefits that are giving them a competitive edge in their industries. Four elements of supply chain integrations that help companies succeed include:

Improved collaboration with suppliers. With timely communications at the core of strategic supply chain integration, decision-makers can improve collaboration with suppliers to ensure that their expectations are being met. It also provides insights that can help them negotiate costs and make adjustments, as needed, to avoid or navigate challenges that can lead to logistical delays.

Optimized logistics. With logistic costs significantly rising in recent years, along with complexities in the supply chain, companies are using supply chain integration solutions to streamline distribution channels and gain the real-time insights needed to improve operations and minimize efficiencies

Enhanced quality control. Through effective supply chain integration solutions, companies can readily convey standards and expectations throughout all tiers of the supply chain. As a result, the potential for all partners to identify quality control issues as they occur can empower them to minimize further disruptions.

Managed inventory. Another benefit of an optimized supply chain through supply chain integration solutions is the company's potential to better manage inventory. With more insights into customer demand, production, and shipping, the company can better predict inventory levels and manage demand for warehousing. Optimal inventory levels can significantly reduce a company's overall costs.

Types Of Supply Chain Integration

One of the challenges facing companies when attempting to optimize supply chain integration is understanding how to effectively incorporate the various types of supply chain integrations, including internal and external supply chain integrations.

Internal integration in supply chain management involves eliminating silos among departments, including sales, customer success, product, marketing, and delivery teams. Meanwhile, external supply chain integration examples include automating data with suppliers who provide raw materials, software companies that provide insights into shipping activities, and the forwarders and shippers that move the freight.

When seeking a supply chain integration solution that addresses both internal and external collaboration, a company should be careful to understand the needs of the separate processes needed to manage internal teams and external suppliers.

Importance of Supply Chain Integration

Numerous studies have revealed that businesses are facing an increasing amount of competition, with 90 percent of business leaders reporting that the competition in their industries has intensified in the past several years.

At the same time, companies are increasingly relying on outsourcing and off-shoring solutions, making logistics operations more complex. Other factors, including changing customer expectations for faster lead times, have further intensified competition between freight forwarders and shippers in their markets.

With businesses seeking a competitive advantage in any way possible, many are understanding the importance of supply chain integration to streamline operations, realize cost savings, and enhance customer satisfaction. A lack of knowledge about establishing complex supply chain integration, along with a reluctance to adopt new technologies and a functional integration in supply chain, could cripple many businesses’ ability to compete.

Supply chain integration solutions, which leverage automation, data, and measurement tools, are transforming the way that businesses are managing their supply chains. Through real-time insights provided in software platforms, users can analyze data to immediately make informed decisions on how to increase logistical efficiencies and manage inventory.

As a result, supply chain integration solutions have become a game-changer for companies who are seeking flexible and nimble supply chain logistics based on more accurate and real-time data analysis. They can more quickly respond to customer orders, collaborate with partners, improve inventory management, and enhance visibility into all tiers of the supply chain.

Supply Chain Integration Challenges and Solutions

With the complexities involved in today’s business operations, the challenges of supply chain integration can be extensive. The implementation of supply chain management demands the integration of processes among supply chain members — both internally and externally in various functional areas, from sourcing and manufacturing to distribution.

As a result, the barriers to internal integration can occur at different levels. While the need for successful implementation of information sharing may be apparent, some teams may focus on the disadvantages of supply chain integration.

Supply Chain Integration Challenges

When implementing supply chain integration strategies, business leaders should be prepared to address challenges at various levels of the supply chain, including managerial, organizational, and financial business functions.

Managerial: Companies can be prepared to face managerial resistance to new technology when trying to transition to automated supply chains. Some managers, who may not understand the benefits of technology, can be resistant to the benefits of information sharing and innovation. The adoption of new technology also may challenge old hierarchal models of leadership.

Organizational: These barriers are generally related to attitudes about the implementation of information sharing, many stemming from the organizational structure of the business and any teams involved in information sharing. When leaders attempt to significantly change processes and employee behaviors through transparency and the elimination of deeply embedded siloes, it can represent a major organizational disruption. However, companies that are reluctant to embrace information sharing may be at a competitive disadvantage.

Financial: Some businesses may consider financial constraints as one of the barriers to supply chain integration. Although the switch to more efficient and streamlined supply chain operations can lead to significant, long-term benefits, companies may be concerned about the upfront financial investment needed for the software, changes in processes, and employee training required for the transition.

Advantages And Disadvantages Of Supply Chain Integration

When exploring the advantages and disadvantages of supply chain integration, business leaders will need to access the benefits of collaborating across functions and processes internally and externally in a way that delivers benefits to the company and the end customer.

Internally, the benefits of supply chain integration include the ability to integrate supply activities, including procurement, manufacturing, and logistics, with demand activities, including sales, production, and customer support. As a result, decision-makers can gain insights that could minimize costs and enhance customer satisfaction. It also enables teams to better manage inventory and capacity related to projections on supply and demand.

Externally, supply chain integration strategies also allow department leaders to keep suppliers and customers informed about any changes to product availability and changes in the estimated time of delivery.

When exploring questions like “what is the goal of integrated supply chain management?” companies may need to weigh the pros and cons of investing in software solutions. For instance, some advantages include increased revenue, lower costs, and elevated supply chain visibility. Software providers that specialize in supply chain integrations, including Chain.io, can help businesses accomplish these goals.

Some of the perceived disadvantages of supply chain integration that business leaders may need to address include the amount of time it can take to switch from manual processes to a more modernized supply chain. Also, connecting legacy supply chain software to new software can be difficult for teams without internal expertise or experience. With an integrations expert managing the process though, the time to integrate and resources needed to transform a company's supply chain are exponentially smaller.

Chain.io Supply Chain Integrations

Chain.io specializes in plug-in solutions to help logistics customers in numerous industries automate supply chain processes, connect legacy supply chain systems, and achieve better visibility into all functions of their business.

Chain.io is an integration platform that leverages next-generation technologies, API, and EDIs that enable companies to manage their supply chains in a more efficient way. Chain.io’s easy supply chain integrations help translate supply chain data, simplifying the process of a supply chain digitization journey.

As part of Chain.io’s service, data is automated between partners and customers along the global supply chain, including freight forwarders, software providers, 3PLs, and 4PLs. This information is integrated into the client’s platforms for real-time insights that inform better decisions on cutting costs, increasing revenue, and elevating supply chain revenue.

Through Chain.io’s data integrations for supply chain digitization, companies can overcome barriers to supply chain integration. Chain.io connects partners across the global supply chain to elevate supply chain visibility to the right people at the right time.