BARRIERS TO SUPPLY CHAIN INTEGRATION 26th July 20111 The key objectives of a supply chain are to provide quality products & services, speed with which goods and services move through the chain, dependability, flexibility and cost. (Slack, Chambers, & Johnston, 2007) One of the key facilitators to achieving these objectives is Supply Chain Integration. Today, Supply Chain Management as a discipline has changed the way logistics and supply is viewed.
The competitive nature of business has neccesitated the modelling of Management Information Systems that can be used to provide information that will help fulfill customer demand while at the same time ensuring costs are kept to a minimum. “To stay competitive, enlightened companies have strived to achieve greater coordination and collaboration among supply chain partners in an approach called “supply chain integration. ” (Lee & Whang, 2001) Supply chain Integration therefore speaks to the breaking down of functional andorganisational barriers, and the use of integrated information systems that are part of the whole supply chain. Supply-chain integration builds strong partnerships – Manufacturers can reduce time to market, decrease costs, and manage inventory turns through supply-chain integration. Companies like (Supply Chain Integration) Companies such as SAP, Red Prairie, Manhattan Associates, i2 and HighJump have made use of technology to facilitate supply chain partner collaboration. Internet connectivity has also played a key role in ensuring that different componets of the supply chain are integrated. Barriers to Supply Chain Integration in Kenya Barriers to Supply Chain Integration in Kenya, include; . High Set up costs – IT plays an important role in the integration. The cost of putting together these platforms that integrate the supply chain are very prohibitive. 2. Organizational Set up – A number of companies are set up traditionally where there isn’t much cross functional synergizing in order to take an end to end view of the supply chain. Functions still think in silos, effectively promoting the negative effects of “Bullwhip”. 3. Lack of customer-centricity – While a number of companies will pride themselves as being focused on the customer, this is hardly the case.
You will find that performance metrics are internally focused, with little input from external stakeholders – customers and suppliers. 4. Mistrust – Companies view suppliers as adversaries and would not like to share information with them. I have witnessed situations where suppliers have been pushed to a corner during negotiations and end up delivering shoddy services / goods because of the low prices offered. This lack of collaborative approach is a barrier to integration. How do we overcome these barriers? Perhaps the most widely accepted philosophies or paradigms that focus on elimination of barriers are Lean thinking (and Just-In-Time) and Agile Manufacturing” (van der Vaart & van Donk). In my view, companies need to combine elimination of waste with responsiveness. To be responsive, you have to organize the company in such a way that the customer is the focus and metrics are designed in this way. A collaborative approach to tackling the issue of high IT costs is also key. This will involve suppliers collaborating with the company to come up with a system that can address the issue of IT set up costs.
Reference List 1. Donovan, M. (h. t. ). Supply Chain Management: Plan to Succeed. retrieved August 27, 2011 from RMDonovan Web site: www. rmdonovan. com 2. e-Integration in the Supply Chain – Barriers and Performance. (h. t. ). retrieved August 27, 2011 from BNET Web site: http://findarticles. com/p/articles/mi_qa3713/is_200210/ai_n9129373/ 3. Lee, H. , & Whang, S. (November 2001). E-Business and Supply Chain Integration. retrieved August 27, 2011 from http://www. uazuay. edu. ec/bibliotecas/e-business/E-Business_and_Supply_Chain_I