Supply Chain Integration
Establishing an integrated supply chain requires the total commitment of upper management. The heart of an effective supply chain is the purchasing department that initiates all ordering documents. As such, the manager of the purchasing function or the company officer to whom purchasing reports is the final authority on supply chain management decisions. Supply chain integration requires a team consisting of sales, engineering, logistics and purchasing. Representatives of any other departments in the company’s structure that have operational interest in the supply chain should also be included.
Sales participate to verify a customer’s needs. Engineering confirms that a product conforming to the customer’s specifications can be delivered. Logistics voices any concerns pertaining to scheduling. Purchasing determines sourcing.
An integrated supply chain necessitates excellent communication between the buyer and seller. The relationship and communication that exists between the ordering and shipping points (buyer and seller) should be strong enough to insure that the product being ordered is available for shipment. To maximize the effectiveness of the supply chain, the relationship and communication that exists between the ordering and shipping points should be strong enough to insure that items being ordered are available for shipment. To maximize the effectiveness of the supply chain, the two companies computer infrastructure need to be linked.
The seller’s computer system should allow the buyer’s system to track the status of an order from the time the purchase order is issued. As the order is processed by the seller, updates are provided to the buyer. When product is ready for shipment and loaded onto a truck, the transportation department or transport agency should have the capacity to keep both seller and buyer apprised of the shipments status.
It is imperative that every company specifically define the functional responsibility of all departments within each of their organizations. This eliminates any doubt as to which department has responsibility for addressing any issues that arise.
Supply chain integration calls for every organization and individual involved in the process to understand that they can all benefit from their efforts. The supply chain is a multi-organizational team that should be working together. Although the buyer has the most to gain, the supplier’s and the transportation company’s observations can often times lead to improvement in the manner the supply chain functions. An integrated supply chain should benefit all participants.