Integration is required not just within the organization but integration upstream with suppliers and distributors and customers. This integration is logistical rather than “vertical”; in other words we do not imply ownership or domination of the supply chain but rather that there is a greater emphasis on the linkage of organizations through information.
The whole nature of logistics management has been dramatically changed by the information technology revolution. Information systems have now become the driving force pressurizing companies to reconsider their relationships with customers as well as suppliers. It is no longer possible to manage the business as if it were in a vacuum with no interconnections with other organizations.
By process integration we mean collaborative working between buyers and suppliers, joint product development, common systems and shared information. For some companies such ideas are yet unthinkable and yet the signs are clearly pointing to a future where it will be the extent and quality of supply chain, integration that will determine market place performance.
However in many industries the concept of process integration is increasingly accepted. For e.g. Over the last decade there has been a significant change in the way many car manufacturers in Western Europe have changed from fragmented, transaction focused businesses to highly integrated and relation ship based supply chains.
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